Search for Zcash mining and you get 17 results: calculators, pool setup guides, hardware vendor blogs, forum threads, and videos with monthly earnings in the title. Several are project pages, and the highest-placed is a setup guide. Almost none of the 17 explains what the miner computes.
Three things make mining here different from mining anything else: how the coinbase transaction works, how the subsidy is split before miners see it, and the rule about paying that subsidy to a shielded address. Most mining guides cover none of them, because they are setup instructions rather than explanations.
what follows covers the mechanics: what the work is, how fast blocks are aimed at, where a new coin appears, who it is split between, and the consensus rule that lets a mining reward be paid to a shielded address. It does not cover whether any of it pays.
What a miner is actually computing
Mining is a search. A miner assembles a candidate block. Then it tries values over and over until the result satisfies a difficulty condition. The first miner to succeed publishes the block. All of that is shared with every proof-of-work chain, and none of it is where Zcash differs.
The difference is the function being computed. Zcash uses Equihash, and its protocol specification gives the reason in one word: the algorithm is "memory-hard", chosen in an attempt at heading off mining centralization (source: Zcash protocol specification).
Memory-hard means the work is limited by memory access speed rather than by hashing speed. The reasoning is that memory is a commodity. Specialized hardware therefore has less room to pull ahead of ordinary machines.
Note the verb: attempted. The document makes no claim that the goal was achieved, and neither is one made here. Whether Equihash really held off purpose-built hardware is contested. It is a question about outcomes, and the specification is a design document.
There is a second reason the function matters. It has nothing to do with hardware costs.
Equihash is not what other big chains use. So Zcash does not share its miners with them. A machine built for another chain cannot simply be aimed at this one. The two networks rise and fall on their own.
That independence cuts both ways, and this guide does not score it either way. It is a structural fact, and it follows from choosing a different function.
Our guide to what proof of work is covers the shared mechanism, and our guide to how mining works generally covers the version most readers meet first.
Why the block target matters more than it sounds
Every proof-of-work chain aims for blocks at some average rate. The network adjusts difficulty to hold that rate as participation changes. The number chosen is not a detail. It sets how quickly a payment gains confirmations. It also sets how often the subsidy is paid out.
Zcash's target is measured in seconds. A Final consensus proposal records that the pre-Blossom target spacing was 150 seconds and specifies the shorter figure that replaced it (source: ZIP 208).
Two consequences follow, and both are more interesting than the number itself.
Faster blocks mean a payment reaches any given confirmation count sooner. They also mean the halving schedule has to be defined against a different block count. That is why the interval was adjusted in the same proposal rather than left alone.
The second consequence is for miners. More blocks per day means more chances to win one. Each win is proportionally smaller. That changes the variance of mining income without changing what it averages to, which matters most to anyone mining alone.
A third effect shows up deeper in the protocol. More blocks per hour means anything counted in blocks moves faster too.
Plenty of things are counted that way. Upgrade heights are. Halving intervals are. So are the windows after which an unmined transaction expires. That is why changing the target meant changing several other numbers in the same proposal.
Our guide to difficulty adjustment covers the mechanism that holds the target steady, and our guide to Zcash halving covers what the halving schedule does to the subsidy over time.
Where a new coin actually appears
Ask most people where new coins come from and the answer is "mining". That is true, and it skips the mechanism entirely. The real answer is one specific transaction with an unusual property. Zcash inherited both the transaction and its name.
The shielded-coinbase proposal defines it plainly. Zcash inherited from Bitcoin the concept of coinbase transactions: "special transactions inside each block that are allowed to have no inputs. These transactions are created by miners during block creation, and collect the block subsidy and transaction fees into new transparent outputs that can then be spent" (source: ZIP 213).
Three things in that sentence are worth pulling out.
A transaction with no inputs is otherwise impossible. Every other transaction spends something that already existed. The no-input rule is the whole mechanism by which new supply enters circulation.
The coinbase collects the subsidy and the fees paid by everyone whose transactions are in that block. Those are two different revenue streams and they behave differently over time, because the subsidy is scheduled and the fees are demand-driven.
And the outputs were transparent. That word is doing real work in the sentence, and everything below is largely about why it stopped being the only option.
One more property is worth knowing because it surprises people who go looking. The outputs of a coinbase transaction are not immediately spendable. Chains impose a maturity delay first. The reason is that a block can later be orphaned, and a spent reward from a block that no longer exists would leave the ledger inconsistent. This is inherited machinery rather than a Zcash invention. It is also why a freshly mined reward can show up in a balance before it can be moved.
One more thing follows from all this. Fees and subsidy sit in the same output, so a miner is paid once, not twice. As the subsidy shrinks over time, fees make up more of that single payment.
Nobody knows what mix that ends at. It depends on how much people use the chain, and that is not set by any rule.
Our guide to how transaction outputs work covers the accounting model those outputs live in.
Who the subsidy is actually split between
Here is where Zcash stops resembling Bitcoin. The block subsidy does not all go to the miner who found the block. A portion is directed elsewhere by consensus rule. That means every node enforces the split, rather than participants agreeing to it by convention.
The mechanism is called a funding stream, and the allocation is set by proposals rather than by any single party. One such proposal specifies that "8% of the block subsidy is to be distributed to the Financial Privacy Foundation (FPF), for the express use of the Zcash Community Grants Committee (ZCG) to fund independent teams in the Zcash ecosystem", and that "12% of the block subsidy is to be distributed to the lockbox" (source: ZIP 1015).
A caveat that matters more than the numbers. A proposal's status describes the document, not the network. The index lists some funding proposals as Active, one as Final and another as Proposed, which are three different vocabularies applied to the same shelf (source: Zcash Improvement Proposals).
So what appears below is what the documents specify. It deliberately says nothing about which allocation the chain is paying out this week. A running node can answer that. A published page cannot, and a claim of that kind goes stale without announcing itself.
What is durable is the shape. A real share of every block's subsidy goes somewhere other than the miner who found it. The rule sends it there. The shares are set by proposals, and those get revised. People have argued about the whole arrangement since the chain launched. Our guide to Zcash tokenomics covers the supply structure, and the dev-fund debate has its own node.
Shielded coinbase, the rule specific to Zcash
This is the most Zcash-specific thing about Zcash mining, and the part general mining guides never reach. It is also a consensus rule rather than a wallet feature, which is why it took a network upgrade to introduce and why no amount of software choice could have produced it otherwise.
Originally, mining rewards could only be paid to transparent addresses. A miner earning a subsidy was earning it in public, permanently, whatever they did afterwards. For a chain whose purpose is optional privacy, that is an awkward exception at the exact point where new supply enters.
A consensus change removed it. The same proposal quoted above "defines modifications to the Zcash consensus rules that enable coinbase funds to be mined to Sapling (and later Orchard) addresses", and it is explicit that this is an addition rather than a replacement: "it does not disable the use of transparent addresses in coinbase transactions".
Rules like this live in the node software every participant runs, which is public (source: zcash/zcash), so a miner can read exactly what their own node will and will not accept rather than taking anyone's word for it.
The stated motive is more ambitious than convenience. The proposal describes the change as a step "on the path to deprecating and removing Bitcoin-inherited transparent addresses within the Zcash network", for which "a required step is to be able to create coinbase transactions that have no transparent outputs".
Read that as a direction rather than a finished job. The transparent option still exists. The proposal says so in the same breath. Our guide to Zcash address types covers what those address types are.
It is worth being clear about what changed and what did not. Nothing forces a miner to shield a reward. What changed is that the option exists at all, and that it took a network upgrade to create it.
For a miner the effect is a choice that does not exist on other chains. Take the reward in public, or take it shielded. The choice is made per block, and it can change from one block to the next.
It is a small choice with a long tail. A reward taken in public stays public forever, whatever the miner does later. Our guide to reading a block explorer covers how the transparent version of that choice looks from outside.
What mining leaves undecided
Four limits, and the first of them is a refusal rather than an observation. Each is something a reader could reasonably expect from an article with mining in the title, and each belongs to a different question with a different answer, so naming them is more useful than gesturing past them.
this guide does not tell you whether mining Zcash pays. That question depends on hardware, electricity, difficulty and price, all four of which move, and three of them differ for every reader. It has its own node in this series for exactly that reason. Profitability calculators answer it with a number that was true when the page loaded, and the project's own mining page is a setup guide rather than an economic one (source: Zcash documentation).
Mining does not decide the rules. Miners choose which valid blocks to build and cannot make an invalid one acceptable. The subsidy split, the block target and the shielded-coinbase rule are all consensus rules that nodes enforce, and a miner ignoring them produces blocks the network rejects. More than one independent implementation enforces those rules: the Zcash Foundation maintains a full node written in a different language from the original (source: Zebra), so a rule is not whatever a single codebase happens to do. Our guide to nodes, miners and wallets covers who actually holds which power.
It does not make transactions private. Mining a reward to a shielded address protects that reward and nothing else. Whether anyone else's payment is shielded is their own choice.
Those are separate decisions, made by separate people, at different times. A block full of transparent payments can carry a shielded reward, and the reverse is just as possible.
It also does not tell you how the category is usually explained. A widely-read explainer of Zcash mining published by a major data site mentions Equihash once and never mentions the subsidy, the coinbase transaction or the block target at all (source: CoinMarketCap Academy), which is a fair description of what a reader normally finds.
And it does not settle whether the centralization goal was met.
The specification says the design attempted it. What happened in the hardware market afterwards is a separate story, told in shipping dates and price lists rather than in a protocol document. Anyone claiming a clean verdict either way is reading more into that one verb than it carries. The specification says the design attempted it. What actually happened in the hardware market since is a question left open here rather than answered from a design document.
What a miner actually does, step by step
The process is easier to hold onto as a sequence than as a description, and every step of it is the same on any proof-of-work chain except where noted.
Collect transactions from the mempool. These are the payments waiting to be included, and the miner chooses which ones go into the block being built.
Construct the coinbase transaction. This is the one that pays the block reward, and on this chain it is where the subsidy split is enforced: the consensus rules require the reward to be apportioned across the defined destinations rather than paid wholly to the miner.
Assemble the candidate block. Transactions plus coinbase plus a header that commits to all of it.
Search for a valid solution. This is the work. On this chain the puzzle is memory-hard rather than purely arithmetic, which changes what hardware is efficient at solving it without changing the shape of the search.
Broadcast on success. Other nodes verify the solution, verify every transaction, verify the subsidy split, and accept or reject the block.
Then repeat, against a difficulty that adjusts after every block rather than on a fixed schedule. That adjustment cadence is one of the genuine differences from Bitcoin, and it means the network's response to a change in hash rate begins immediately rather than at the end of an epoch.
Why the coinbase rule is the Zcash-specific part
Most of the sequence above transfers directly from any other proof-of-work chain. One step does not, and it is the step that carries every Zcash-specific consequence.
The block reward is not the miner's to allocate. A consensus rule specifies how it divides, which means a block paying the wrong proportions is rejected by every node rather than merely disapproved of. That converts a funding policy into a protocol property.
The rule has changed more than once, through the ordinary upgrade process, which is why any statement about the current split needs a date attached. Our guide to the development fund covers how it has moved.
And the coinbase output can be paid to a shielded address, which is a capability introduced by a network upgrade rather than a wallet feature.
What mining decides, and what it leaves open
Four things it settles and three it does not, because the two get conflated whenever mining is discussed as though it were governance.
It settles which valid transactions go into a block and in what order. That is real discretion and it is the miner's.
It settles who receives the miner's share of the subsidy, which is the economic reason anyone does this.
It settles nothing about the rules. A miner cannot pay themselves more than the consensus rules allow, cannot include an invalid transaction, and cannot alter the subsidy split, because every node checks all three and rejects blocks that fail.
And it settles nothing about upgrades. Miners run software like everyone else, and an upgrade activates because implementations enforce it rather than because miners approve it. What miners can do is fail to upgrade in time, which delays activation rather than blocking a change, as the 2026 emergency response demonstrated.
The distinction matters because mining is frequently described as a vote. It is not. It is a competition to append blocks under rules decided elsewhere, and the only lever it carries over those rules is the ability to be late.
That last lever is not nothing, though, and the 2026 episode showed exactly how much it is worth. An emergency change that required activation at a specific height failed on its first attempt because several large pools had not deployed the software in time. No pool blocked anything or voted against anything; they were simply slow, and the network's schedule bent around them. On any proof-of-work chain, the practical veto available to large operators is inertia rather than opposition, and it is worth understanding as a property of the system rather than as a failure of anyone in it.
The same property explains why upgrade schedules on every chain leave more room than the engineering requires. An activation height set close to a software release assumes deployment happens promptly, and deployment across independent commercial operations reliably does not. Building slack into the schedule is cheaper than discovering the shortfall at the height, which is a lesson the 2026 sequence taught in public and at some cost. That matters because it is the one place where mining and the privacy design intersect, and it is the part general mining material never reaches.
Frequently asked questions
What algorithm does Zcash mining use?
Equihash. The protocol specification calls it memory-hard and says it was picked in an attempt at heading off mining centralization. Memory-hard work is limited by how fast memory can be read, not by how fast a chip can hash. Memory is a commodity, so custom hardware has less room to run away from ordinary machines. Note that the specification says the project attempted this. It never claims the attempt worked, and no such claim is made here.
Do Zcash miners get the whole block subsidy?
No. A portion is directed by consensus rule to other recipients through what the protocol calls funding streams, so the split is enforced by every node rather than agreed informally. One proposal specifies 8% to a foundation for a community grants committee and 12% to an in-protocol lockbox. Which allocation the chain is paying out at any given moment is a live fact that a published article cannot keep current, so this one states what the documents specify instead.
Can mining rewards go to a shielded address?
Yes, and a consensus change was needed to make it possible. The relevant proposal enables coinbase funds to be mined to shielded addresses and states explicitly that it does not disable transparent addresses in coinbase transactions, so both remain available. Its stated motive is a step toward removing the Bitcoin-inherited transparent addresses from the network over time, which is a direction rather than a finished change.
How often are Zcash blocks found?
The target is measured in seconds rather than minutes. A Final consensus proposal records that the pre-Blossom target spacing was 150 seconds and specifies the shorter figure that replaced it. Faster blocks mean a payment reaches any given confirmation count sooner, and they mean more, smaller wins for a miner, which changes the variance of mining income without changing what it averages to.
Researched and written by the BloFin Academy editorial team with AI-assisted drafting. Primary sources include the Zcash protocol specification and the Zcash Improvement Proposals repository. All facts independently verified against cited documentation current as of August 2026. what follows contains no hashrate, difficulty, reward or earnings figure, names no mining pool or hardware vendor, and takes no view on whether mining is worth doing.
This article is for educational purposes only and is not financial advice. Cryptocurrency is volatile and you can lose money. Do your own research before making any decision.