Grayscale: Zcash mining more profitable than Bitcoin per machine

Zcash mining is currently considerably more profitable for miners than Bitcoin mining, even though total daily rewards for Bitcoin are much higher. That is according to an analysis by Grayscale Research. Per mining device, Zcash miners earn roughly twice as much as Bitcoin miners, and per megawatt-hour around four times as much. The sharp rise in the ZEC price is behind this increased profitability, and it is attracting more and more miners to the network.

In brief:

• Zcash mining yields around twice as much per device and around four times as much per megawatt-hour as Bitcoin mining.
• Total mining activity on the Zcash network rose more than 2.5-fold this year.
• Grayscale sees a possible self-reinforcing effect: higher prices attract more miners, which strengthens network security.

Daily rewards far apart

Bitcoin miners collectively earn around $35 million per day worldwide. For Zcash miners, that total stands at around $2 million per day. Yet Grayscale Research concludes that Zcash is much more attractive per individual device, because the hardware is cheaper and operates more efficiently relative to the reward that can be earned with it.

It should be noted that the two networks are not interchangeable in terms of hardware. Miners cannot simply move their equipment from Bitcoin to Zcash, meaning the markets largely operate independently of each other.

More miners strengthen the network

This year, the higher profitability has caused total Zcash mining activity, measured on the basis of standardised computing power, to rise more than 2.5-fold. Grayscale points to a possible self-reinforcing pattern: a higher ZEC price makes mining more attractive, more miners provide a safer network, and that can in turn support the price further.

Whether that pattern will actually persist is not certain. Grayscale describes it as a potentially reinforcing effect, not a guarantee.