So, you may or may not now be the owner of a share or shares in the Z-cash mining pool opened-up by Bitclub. And, if you are, you are probably a little excited about the potential of what you have but also a little unsure as to what it does for you functionally and what is going to happen with this.
If you are not a share owner, this may well inform you well for the future as there may be other ways for you to acquire mining shares or interest in Z-cash as time goes on. Right now, every share in BCN's pool and every external source I am aware of are all sold out but it may be that more will become available in time.
I'm sure that there will be opportunities to buy Z-coin (that is the currency of Z-cash) over time but it is going to be hard for a while to know what a good buying price will be.
On that basis, I figured that this information, based on my own understanding of what is going to happen with Z-cash, might well be useful for you. I should stress that this is entirely me and nothing to do with BCN so you are getting my interpretation alone. Of course, my information is informed by over sources and that is always the way of it and how we all find out what we know.
First, what you absolutely need to know is that what you have invested in through Bitclub is mining hardware that operates on GPU's (Graphics Processing Unit). Very quickly, that means that the kit you now have a vested interest in works in the same way as the CPU (central processing unit) on your computer at home (but is much more powerful) but works exclusively to take burden away from a CPU and to process specific functions so that your CPU doesn't need to.
It is more powerful than any typical CPU because it is entirely focused on one function and doesn't have to "multi-task".
If we think of this in terms of your home computer, and if we assume that you have a GPU in addition to your CPU, it would allow, for example, your CPU to carry on with its mundane daily tasks while it (the GPU) focuses exclusively on another task alone.
Basically, all cryptocurrency mining rigs offer various power levels of graphics cards and everything else is simply a matter of how big, how powerful and how efficient?
Typically, we think of graphics cards as the extra kit we need in a computer to allow us to play games or watch videos and so on. These generally are the most demanding processes we use computers for in terms of power requirements. That is why serious hard-core computer gamer's will spend absolute fortunes on the biggest and best graphics card for their machine.
Mining rigs are simply more powerful versions of those graphics cards that are adapted to solve mathematical problems (that's a simplified explanation but it will do).
Having purchased a share in the BCN Z-cash mining pool, you have done much more than simply buy an interest in the appearance and distribution of Z-cash, as much as that could prove to be highly profitable. What you now have is a slice of action in machines that can be adapted to mine for, pretty much, any cryptocurrency.
And you have this slice of action for as long as the equipment lasts. That could be 15 or 20 years but, frankly, if it were 10 years I think most people would be well chuffed. So let me now explain Z-cash mining specifically and why this is creating so much excitement.
First off the GENESIS BLOCK of what is now known as XZC (Z-coin) was literally mined yesterday, 28th October 2016 at 09:00 PDT (Pacific Daylight Time). And that is the first ever block of what will, over time, produce 21 million Z-coins. Sound familiar? Yes, it is the same number as the final number of Bitcoin there will ever be.
So, it is a little bit like you being there at the start of Bitcoin. GENESIS BLOCK literally meaning the very first block of Z-coin. After what we call a "sprout" or slow start period, the reward per block of Z-coin will commence at 12.5 coins (Bitcoin started at 50 per block) but the blocks with the Z-cash protocol will appear every 2.5 minutes (Bitcoin is every 10 minutes.
You will not notice much of anything at all for a while with Z-cash mining because it has been deliberately set up as a slow start (sprout period). This is to make sure that they can catch any anomalies or problems in the process early before too much Z-coin has hit the market. This is not only very sensible but makes you wonder why everyone who was serious about introducing a new cryptocurrency didn't allow themselves a similar lead in or final test period.
In practical terms the total supply of Z-coin on day 1 will probably not have exceeded 104 coins. At day 10 this will have increased to about 1,970 produced on that day. Over a period of around 34 days the block reward will build to the 12.5 Z-coin per block reward that will continue thereafter. This means that instead of there being 250,000 Z-coins produced in the first 34 days, it will be 125,000 only.
This is deliberate, as stated earlier, to make certain that there are no surprises that cannot be dealt with in the early days. A debugging period if you will.
What does this mean to you? Well, for one thing, you will not see much of a return early on from mining and this should not be a cause for concern because you could be mining this stuff for years. Secondly, it means that the early market for Z-coins (XZC) will be hugely volatile as people clamour to make profit from trading it. You could see the price get into the $10 to $100 or more range very quickly and you could see it move in and out of that range frequently.
This, of course, is all mere speculation on my part. So please don't shoot me if I have it all wrong.
So, you need a plan at the outset and I suggest that plan should be a little longer-term in respect of your intentions to sell coin and not an over-eagerness to sell when you see the market price soaring. Just my opinion, nothing else. Of course, if the price suddenly becomes obscenely high and you find one day that you can sell 10 XZC for $1,000 each and you already have 10 of them, well, who wouldn't be tempted.
This slow start (the "sprout" period) also gives those that are mining an opportunity to "fine tune" their equipment to get it producing as best it can. Whichever way you look at it, Z-cash is either going to be a massive hit (fuelled by its unique qualities) or it isn't but the more of it you can get, the better off you will be if it becomes a roaring success. I think that BCN over time are going to do well with this.
It shows a new direction that excites me. If they can get to grips with variable cryptocurrency mining and can find other profitable cryptos to do it with, this could be massively lucrative to us all in the future as the "portfolio" expands. And, remember that, unlike any other mining company out there, BCN will be able to add seriously good currencies to their own Coinpay stable of spendable currencies once Coinpay is established.
So, what else do you need to know about Z-cash? Well, this bit is very important I think. With any "proof of work" mining process, the stronger the "network" becomes, the stronger the underlying currency becomes. Because you can, effectively mine Z-cash on a home computer (if you have the requisite skills) the mining network will grow massively in the early days and as it grows the network strengthens.
This is what made Bitcoin succeed so well. Once people realised that Bitcoin was not only a fun new thing but also potentially hugely profitable and the ledger system (THE BLOCKCHAIN) worked well, the network that secures Bitcoin grew very strong indeed. I believe that the Z-cash network could grow much faster as they do not have that early barrier to break down that Bitcoin did, namely, "what the hell is this thing" and they have past mistakes from others to guide them.
Z-cash doesn't need to educate in a new process in the way that Bitcoin did so Z-cash could do very well indeed and it could do it far more quickly than Bitcoin did. OK, cautionary notes; because it is all too easy for me to get carried away with this.
First off, Bitcoin is still the big daddy of crypto so any development within Z-cash that opens more doors than first envisaged or imagined will not suddenly make Bitcoin seem unattractive. Far from it. The reverse is more likely as awareness drives the original and strongest cryptocurrency to even greater levels of value as they discover just how far they can go with Z-cash. Remember the original programme was Bitcoin, it is also capable of adapting as it moves forward. As you will see below, Bitcoin seems to be doing very well.
Second cautionary note, Z-cash, as good as it looks, may have issues in the future that are not yet discovered. Hopefully the sprout period will deal with all that but one can never be certain about anything new. The only reason that Ethereum's currency (ETHER) is not standing at twice the price it is right now is because of a problem they encountered with their blockchain back in June/July.
It is possible that Z-cash may be hit with problems on its way to fame and fortune too. However, Z-cash does, of course, have the benefit of being able to learn from the likes of Ethereum and earlier models. Incidentally, Z-cash has been under development for a good few years now. It isn't a flash in the pan idea.
Want to know anything else about Bitcoin, Z-cash, Ethereum or cryptocurrency generally? Ask me, and if it is something that many would likely want to know, I will make it a Bit-Talk future subject.
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