Grayscale Research Head Zach Pandl stated that Zcash ($ZEC) mining offers significantly higher profitability compared to Bitcoin mining under current market conditions, and that mining activity on the Zcash network has increased by more than 2.5 times since the beginning of the year.
The analysis published by Pandl states that Zcash uses a Proof-of-Work (PoW) consensus mechanism similar to Bitcoin, but also offers additional privacy features. It also notes that the strong performance of the $ZEC price has significantly improved the mining economy.
The Bitcoin network is significantly larger than Zcash in terms of scale. According to Grayscale data, the total daily reward distributed to Bitcoin miners is approximately $35 million, while for Zcash it is around $2 million. However, considering the amount of capital and energy used for mining, Zcash is said to offer a higher return.
According to Grayscale’s estimates, Zcash miners earn approximately twice the daily income per piece of mining equipment used compared to Bitcoin miners. In terms of energy consumption, the revenue generated per megawatt-hour (MWh) of Zcash mining is about four times that of Bitcoin. However, it was noted that the equipment used for Bitcoin and Zcash mining is not interchangeable due to the different algorithms employed.
Some industry data suggests that Zcash mining can yield higher returns per MWh than even certain AI and high-performance computing (HPC) cloud services.
Increased profitability in mining has also accelerated the influx of new processing power into the Zcash network. According to standard hashrate measurements, mining activity on the Zcash network increased by more than 2.5 times by 2026.
Grayscale believes this development could create a positive cycle for Zcash. The rise in $ZEC price increases mining activity, while the increased hashrate strengthens the network’s security. A more secure network, in turn, is seen as boosting investor confidence, which in turn can support the $ZEC price.
*This is not investment advice.