Grayscale’s head of research, Zach Pandl, said Zcash is showing stronger mining economics than Bitcoin at current valuation levels, even though the Bitcoin network remains far larger in absolute terms. In his analysis, Pandl described Zcash as a Bitcoin-like digital asset with added privacy features, with both networks relying on proof-of-work mining to secure their chains.
According to Grayscale’s estimates, Bitcoin miners collect about $35 million in total rewards per day, versus roughly $2 million for Zcash miners. Even so, Zcash appears more attractive on a per-miner basis. Grayscale estimated that daily rewards per machine on Zcash are about 2x those of Bitcoin, while rewards per megawatt-hour are about 4x higher, though the mining hardware used on the two networks is not interchangeable.
Pandl also cited other sources indicating that Zcash mining revenue per megawatt-hour is currently above that of some AI and high-performance computing cloud services. He said the higher profitability is drawing in more mining activity. Measured by a standard hashrate metric, total Zcash mining activity has risen by more than 2.5x this year, which Grayscale said is helping bring more computing power onto the network and support security.
Grayscale head of research Zach Pandl said on Sept. 11 that Zcash (ZEC) is a digital currency similar to Bitcoin but with added privacy features, and that both networks rely on proof-of-work, or PoW, mining to secure the chain.
Pandl said Zcash mining has become highly profitable as the token’s price performance has strengthened. Bitcoin’s network is still much larger than Zcash in absolute size, with miners earning about $35 million in total daily rewards compared with roughly $2 million on Zcash. Even so, he said Zcash is more favorable for an individual miner.
Based on Grayscale’s estimates, daily rewards per mining machine on Zcash are about 2x those of Bitcoin, while rewards per megawatt-hour are about 4x higher, although the hardware used to mine the two assets is not interchangeable. Other sources cited in the analysis also showed that Zcash mining revenue per megawatt-hour is currently higher than that of some AI or high-performance computing cloud services.
The higher profitability is encouraging more mining activity to join the network, according to the analysis. Measured by a standard hashrate metric, total Zcash mining activity has increased by more than 2.5x this year. Grayscale said that creates a cycle in which a higher token price attracts more mining activity, which then improves network security, while stronger security could help support higher prices.
Grayscale concluded that, at current valuation levels, Zcash mining can be very profitable, drawing in more computational power and helping support network security.
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