Zcash (ZEC) is the most profitable cryptocurrency to mine, with expected returns far higher than other PoW coins like Ethereum (ETH) and Bitcoin (BTC).
Data collected from cryptocurrency tools provider Anything Crypto suggests that at current difficulty levels, ZEC miners using the Antminer Z9 mini could expect an $8,000 return on their investment over a two year period.
This was a far higher rate of return that could be expected from other coins. The second most profitable were ether miners using an Antminer E3, who could look to bring in around $2,800 over the same time. The most lucrative ASIC for bitcoin miners was the GMO B2, which could bring in a $1,500 return over two years.
This makes mining Zcash over 400% more profitable than mining bitcoin and just under 200% more than mining ether.
Anything Crypto provides predictions that factor in increases in mining difficulty as well as changes in the price of Zcash. Optimistic predictions – a 15% increase in difficulty and a 10% price increase on a monthly basis – brought the rate of return down to just under $5,400. Skeptical predictions – a 40% difficulty increase and 8% price increase in the same timeframe – still suggested miners could bring in nearly $1,400 in the first year of operation, even though it would become economically non-viable in the second year.
Using the same parameters, Antminer E3 users could expect profits somewhere between $1,270 and $271; the most optimistic profit for those mining bitcoin with a GMO B2 was $283, the lowest was just $81 over a two year period.
Profitable Zcash mining; will it last?
Created in 2016, Zcash is a peer-to-peer currency that gives users the option to selectively disclose private information, meaning senders can decide whether to send funds privately or transparently.
Running off the Equihash hashing algorithm, Bitmain’s Antminer Z9 mini, which was only unveiled at the beginning of May, was the first ASIC designed for the ZEC network.
Originally more of a hobby for enthusiasts, cryptocurrency mining has become big business. Bitmain, the manufacturer behind Antminer, has a $12bn valuation and the company reportedly made $3-4bn in operating profit in 2017. Last week, a Canadian mining firm confirmed a deal to purchase 14,000 bitcoin ASIC rigs for $46m; the equivalent of 0.5% of the BTC hashrate.
At press time ZEC was valued at $153, giving it a total value of $666m; down by over 5% according to CoinMarketCap. The coin’s historical performance doesn’t match the 10-8% monthly price increases assumed for Anything Crypto’s predictions: since the beginning of the year, Zcash has on average fallen by 15% on a month-by-month basis.
Although profit expectations could be unrealistic, Anything Crypto’s predictions nonetheless highlight ZEC as a viable mining alternative. Whilst bitcoin and ether in themselves are more valuable than Zcash, big corporations and mining pools have swamped the BTC and ETH network, meaning profitability is far lower.
The lack of large mining operations in Zcash suggests that for the present, those with Antminer Z9 minis can expect worthwhile returns. Whether it stays profitable completely depends on whether companies begin to invest in Equihash ASICs: independent miners should enjoy the honeymoon period while it lasts.
The author is invested in BTC and ETH, which are mentioned in this article.