Crypto backed by electricity


#1

Outsiders often ask, what is crypto backed with? To which we respond its backed by electricity used to mine those coins. But has anyone wondered how much electricity is actually used to mine 1 Zcash ?

Lets do the math.

Current Zcash network hashrate is 780 MH/s. I would assume no sane GPU miner is no longer mining any equihash algo, so lets calculate as if the network is populated only with z9 mini’s. Which means if we assume they are all z9 mini’s that there are 47272 ASICS mining zcash atm.

Overclocked z9 mini uses 390W and produces 16500 Sol hashrate. Which means electricity backing Zcash mining is 18436 kW of power/h.

Each block contains 12,5 Zcash and is mined at average every 2.5 Minute. This means its mined 300 Zcash per hour.

This means each 1 Zcash is backed by 61.45 kW electricity. Average price of electricity is around 0.1 cents per kW but it might be different where you live. At this math, it means 1 Zcash is backed by 6.145 $ worth of electricity with ASICS on network.

These are all calculations without A9 ZMaster that has 50 000 Sols per 620 W or Asic Miner Co Zeon 200,000 Sols which uses 2200W.

And you wonder why the price is going down ? :slight_smile:

If I made a mistake anywhere, please correct me.

Thank you


Price Speculation
#2

Now lets calculate the same thing for 3 months ago when there were no ASICS on the network.

Zcash hashrate 3 months ago exactly was 470 Mh/s. At the time most efficient GPU and most often used were GTX 1070 which overclocked could get you 500 Sols per 170W. This means we had 940 000 GPU’s mining on Zcash network. And we used 159800 kW per hour.

This means each Zcash used to be backed by 532 kw of electricity. Which is about 53,2$.

Make your own conclusions which one is more valuable and which one is safer.


#3

A lot of assumptions being made here.


#4

Please pitch in where I should correct my calculations and why ?


#5

Here some info for small correction:

  • use 450W for overclocked Z9 mini as this is what it’s using.
  • use 15.0-15.5 Mh/s for overclocked Z9 mini as this is what 90% of them get, only a minority gets as much as 16 Mh/s.

And just a generally thought. Me personally isn’t a fan of the “backed by electricity formula” as i can not see a lot of logic behind it. It leaves out every other aspect like design, tech, teams, roadmaps, volatility, BTC, speculation, exchanges, useability and everything else…

Following your logic ETH should have a price that is at least 20x higher than the current one…


#6

I do not own any z9 mini, but according to many other sources on the internet I found that they even go to 17k Sols per 400W. I intentionally didnt put the highest one, so i would average it with others that can reach 15.5K and 16k Sols.Nor did I calculate in a9 ZMaster that is more efficient or z9 ZEON with its 200 000 Sols per 2200W. But ok, lets take all this into calculation. Lets calculate it one more time with these stats.

Current Hashrate 884 Mh/s (higher than yesterday). Divide it by 16000 Sols (average) you get 55250 z9 Mini’s. Each using 400W brings us to 22100 kW power consuption per 1 Hour of mining ZCASH.
Each block contains 12.5 Zcash and is mined at average of every 2:30 minutes. that means 300 Zcash is mined per hour.
This means that per one Zcash, 73.66 kW of power are used. Which is about 7.3$-8.5$ depending on where you mine it.

You personally being of fan of anything makes no difference on anything. Math is clear. ASICS can sell Zcash down to 8$, but there are always big farms that get the electricity cheaper of course. Zcash has huge inflation, and by lowering the cost of that inflation, its making it hard for price to go back up. 7200 new Zcash are mined each day. At current price, investors need to pump new 1132200$ into Zcash each day just for it not to drop in price.

I did not calculate power consumption for ETH, be my guess and do the math yourself.
I did calculate it for Bitcoin Gold which forked to 144_5 and is now ASIC resistant. Most efficient mining on Bitcoin Gold is at 110W and 65% power limit with GTX 1070 making 42-45 Sols per card. Results is 7.2$ worth of electricity needed per 1 Bitcoin Gold. Current BTG price is 21.70$.

Lets also take Bitcoin mining into calculation and its price. Check the cost of mining one single Bitcoin from this article written in December 2017 https://www.marketwatch.com/story/in-one-chart-heres-how-much-it-costs-to-mine-bitcoin-in-your-state-2017-12-15

Now, its several times harder to mine Bitcoin, according to this difficulty chart (I could only see difficulty from March here, but you get the picture).

There are always once again farms that get it cheaper, but my estimate is that it takes at average 3000$ in electricity to mine one single Bitcoin.


#7

I just think you’re looking at this backwards. The price drives the profitability of mining alongside equipment price and electricity cost. If you disregard this transition period where GPUs are leaving and ASIC are entering and look to where an all-asic network will be, it will again be the same as in bitcoin: Just enough miners competing to make a slim profit margin. The electricity usage is only temporarily down.


#8

Really? What are people gonna sell for 150$ sooner ? A coin that takes 53.2$ worth of electricity to mine or a coin that takes 8$ worth of electricity to mine?

The transition period can take quite some time, as it will take 6.65 x more z9 mini’s on the network to get the price of mining zcash back to where it was 3 months ago. Again this is all without A9 ZMaster that has 50 000 Sols per 620 W or Asic Miner Co Zeon 200,000 Sols which uses 2200W brought into the calculations. They mess up the metrics even further.


#9

I’m against Bitmain’s recent moves towards giving up their customers identities, but I’m totally onboard with more security for less electrical usage. To me, the less miners have to pay their electrical company the better.


#10

There are still GPUs mining ZEC, so your assumption that no sane miner would mine Zcash is false. Some people have old hardware (i.e. R9 280’s, 290’s and 390’s) that has long been paid off and access to extremely cheap electricity, so it’s possible there will always be some GPUs on the network despite the rise of ASICs.

The Asicminer Co. Zeon very likely isn’t a real product and has some convoluted scheme where you have to control the miner through a centralized server. A prominent YouTuber was sent a test unit and they suspected that the miner wasn’t actually hashing, but instead the company was likely pointing rented hashpower at the address input into the server GUI and the miner eventually stoped “hashing” a few days later. I personally have some Innosilicon A9’s, so I can attest to their existence, but I beleive the Zeon is a complete scam.

This is incorrect. If 100% of mined ZEC was being sold immediately after it was mined then this would be partially correct, but it still fails to account for the percentage of existing ZEC supply which trades on a daily basis. What’s actually happening is that only a percentage of the newly mined ZEC is being sold, but we can’t even begin to estimate what that percentage is. I can tell you that I hold all mined ZEC, and I would estimate a large number of users on this forum do as well.

What you’re failing to account for is that the network hashrate is doubling every few months and in a few years it might cost $1000 to mine one ZEC. I wouldn’t sell any of my coins below that price, and I’ll continue to buy more over time even though I’m also a miner.


#11

Possible but not likely, even with free electricity, mining something else makes more sense. Why support the network that does not want you.

This is quite possible, this is why i didnt take it into calculations anywhere.

You maybe do, but as new ASICS come out with more power, its an arms race, and miners invest their profits into new ASICS.

I am not failing to account, I am calculating as it is now, and i did said zcash needs 6.65x greater hashrate populated with z9 mini’s to reach the level of 3 months ago. Often those are sold out, so it will take quite some time to reach that level. Until then value of the network backing Zcash is lower.

As for @root , sure miners love paying for electricity less, so they reach ROI sooner, as they can afford to dump what they mine and buy better and faster machines. Its not good for holders tho.


#12

If i remember right @asicminer has a long history in mining hardware, so i doubt it’s a scam. It might be only a small company, but it’s one with a long history and again, if i remember right they are in the mining business since 2012 or even earlier. I personally wouldn’t call a company with such history a scam…


#13

From what I read on another forum, the current Asicminer Co. has no association with the 2012 company that you’re referring to. And I said “I believe” because of the evidence that I’ve witnessed from a well known YouTuber, which I’m perfectly within my rights to express. So if anyone can provide any contradicting evidence, then I would reconsider the validity of my statement, but as it stands I believe the Zeon is a scam.


#14

I also believe it’s a scam. for probably the same reasons.


#15

I don’t know either and never purchased anything from asicminer and won’t ever, but for me it looks like a legit company doing a lot.

On this report from APEX you can read:
The major manufacturer operating into ASIC Chip market include:

Avalon
Bitmain
ASICMiner
Spards
Samsung
Texas Instruments
NVIDIA
TSMC

reference: https://apexmarketreports.com/Technology-Media/Global-ASIC-Chip-Market-Status-By-Manufacturers,-Types-And-Application,-History-And-Forecast-2025

But than again, a lot may have changed there. I have no idea, seriously, but if it’s the original asicminer company it could be very legit as well. I guess time will show if these that purchase these expensive miners will get their paid hardware or not.