Monero Network Briefly Breached 51% Threshold as Qubic Controls 52.72% Hashrate

Monero, the privacy-oriented cryptocurrency launched in 2014, recently faced a significant security threat as the Qubic mining pool briefly controlled 52.72% of its network hashrate, surpassing the 51% threshold typically associated with potential manipulation of a blockchain [1]. This dominance raised alarm among experts and the crypto community, as it theoretically allowed Qubic to double-spend transactions, alter the blockchain, and reject blocks from other miners [2].

According to Charles Guillemet, Chief Technology Officer of Ledger, the 51% attack is a critical vulnerability that could undermine confidence in Monero’s decentralized structure [1]. The hashrate spike was part of what Qubic described as a scheduled “economic demonstration” lasting from August 2 to 31, aimed at testing the resilience of Monero’s network [4]. During this period, the mining pool’s hashrate reached 3.01 GH/s, enabling it to exert unprecedented influence over the network.

Qubic’s approach involved redirecting mining rewards in XMR into stablecoins, which were then converted into QUBIC tokens. This created a self-sustaining cycle to boost hashrate dominance and incentivize miners to join its pool [4]. The project had previously maintained around 45% hashrate dominance, but the demonstration pushed it beyond 52.72% for a short time, significantly altering the network’s power dynamics.

The implications of such an attack are severe. Analysts noted that sustaining the attack would cost approximately $75M per day [1], a figure that highlights the economic feasibility of such operations for well-funded actors. The ability to orphan competing blocks and potentially centralize mining power threatens the very foundation of Monero’s decentralized model.

Earlier in August, Qubic experienced a sharp drop in its hashrate after suffering a DDoS attack on August 3, reducing its capacity from 2.6 GH/s to 0.8 GH/s in a short timeframe [4]. While no group claimed responsibility for the attack, speculation arose that the Monero community might have orchestrated the disruption. Sergei Chernykh, Monero’s mining software lead developer, denied any involvement, calling the accusation defamatory [4]. Qubic acknowledged the attack but stated that operations continued uninterrupted.

Before the DDoS event, the Monero community had already taken steps to resist Qubic’s dominance through a coordinated boycott in late July, which reduced Qubic’s hashrate from 40% to between 10% and 15% [4]. These efforts underscore the community’s commitment to preserving the decentralization of the network, a core principle for privacy-focused cryptocurrencies.

The broader implications of the Qubic incident extend beyond Monero. It has sparked renewed discussions on the vulnerability of blockchain networks to centralization pressures and the role of economic incentives in shaping miner behavior [4]. Some experts have suggested that broader adoption of protocols like P2Pool could help reduce the risk of 51% attacks by distributing mining power more evenly.

Despite the temporary nature of the event, the episode has left lingering concerns about the long-term security and decentralization of Monero. For a network that prides itself on privacy and resistance to surveillance, maintaining trust in the integrity of its blockchain is paramount [1]. The Qubic experiment serves as a real-world test of Monero’s resilience and highlights the urgent need for enhanced safeguards against centralization in the future.

Source:

[1] title1: Monero Faces 51% Attack As Qubic Controls 52.72% Hashrate

(url1: https://blockchainreporter.net/monero-faces-51-attack-as-qubic-controls-52-72-hashrate/)

[2] title2: Monero Faces a Critical Security Crisis

(url2: https://www.onesafe.io/blog/monero-51-percent-attack-security-crisis)

[3] title3: Privacy-focused cryptocurrency Monero has suffered a 51...

(url3: https://www.theblockbeats.info/en/flash/307016)

[4] title4: Qubic Mining Group Briefly Seizes Majority Of Monero...

(url4: https://financefeeds.com/qubic-mining-group-briefly-seizes-majority-of-monero-network-hashrate/)