“With the phenomenal rise of the market – and no less phenomenal drop that followed – the original mining trends have been changing. First, private mining is going through hard times. Сloud mining, on the contrary, is attracting more clients than ever. Second, a large amount of public attention has switched to altcoins. Let’s explore the potential of Zcash, launched in 2016 and based on the idea of zero-knowledge transactions – and compare it to the Bitcoin.
Zcash is an open-source, new generation cryptocurrency which is basically a code fork of the Bitcoin, and shares quite a few similar features with it:
- each block produces 12.5 coins,
- both ZEC and BTC are based on POW algorithm,
- the maximum number of units that can be mined is 21 million,
- the issuance model is cut in half every 4 years.
However, Zcash developers have made a number of key changes. It has a shorter block time – approximately 2.5 (compared to 9.29 for BTC), which allows for faster ZEC transactions. Block size limit for Zcash is 2 MB: twice more than for Bitcoin. Their POW algorithms are also different: Bitcoin network is using Hashcash, while ZCash implemented Equihash.
The main difference between the two coins, though, is the optional privacy feature of ZCash. It uses zk-SNARKs – novel cryptography techniques that allow to confirm the transaction without revealing the information about the sender and the receiver, or the amount of the deal. Thus Zcash combines the transparency of public blockchain with enhances anonymity.
Regardless of the crises we might be going through, it’s early to declare cryptocurrencies dead: they have already become an integral part of our economy. In the Bitcoin network alone, tens of thousand transactions are made every hour, worth hundreds of millions US dollars. Slowly but steadily, the situation will improve, and we will see the rates go up once again. Further legalization and popularization of cryptocurrencies will contribute to that.
At the same time, due to BTC price drop and high level of competition, many turn their attention to altcoins. At the time of this writing, ZEC market cap is at $620 386 896 USD. According to analysts, today it is one of the most promising cryptocurrencies for mining and investing into.
Until recently, Equihash algorithm had been ASIC-resistant. However, the situation changed this September, with the release of Antminer Z9 Equihash miner. Following the Bitcoin pattern, the demand for ZCash cloud mining contracts is increasing.
Miners move to the cloud for the convenience it offers: to mine successfully, you have to constantly reinvest in new capacities and cut expenses. In the case of cloud mining, the service takes care of the updates and maintenance.
In the very near future, we will see more cloud services offering a variety of contracts for different coins. And as far as Zcash is concerned, it will not replace Bitcoin – but will undoubtedly become its strong competitor due to its convenient enhanced privacy feature and high return rates.
By Alexander Petersons, product director of Hashtoro.com cloud mining service.