Qubic's economic attack on Monero triggers hashrate drop to 7th, decentralization fears

Monero, the privacy-focused cryptocurrency, is currently grappling with an unprecedented "economic attack" orchestrated by its former top mining pool, Qubic, sparking intense community backlash and raising alarms about hashrate centralization. The initiative, spearheaded by Qubic founder Sergey Ivancheglo (also known as CFB), aims to incentivize Monero (XMR) mining through its own network, leveraging economic pressures to shift mining behavior rather than exploiting technical vulnerabilities [1]. This move has triggered a significant decline in Qubic’s hashrate, from the top position to seventh on MiningPoolStats, as the community mobilized to counter the perceived threat [1].

Qubic’s strategy involves redirecting miners to its platform by offering rewards in the form of Monero, with the mined XMR subsequently used to fund buybacks and token burns within the Qubic ecosystem. Ivancheglo justified the approach in a June 30 blog post, stating that Qubic miners now generate "real market value" by performing real-world tasks tied to Monero mining [1]. However, the community has interpreted this as an attempt to monopolize the network. Ivancheglo’s recent X posts explicitly acknowledged the takeover effort, revealing plans to reject blocks mined by rival pools once Qubic controls most of the hashrate [1].

The attack has prompted a defensive response from Monero’s ecosystem. Reddit users and developers have highlighted the risks of a 51% attack, where a single entity could orphan blocks, reject transactions, or enforce protocol changes. Analyst Dan Dadybayo of Unstoppable Wallet emphasized that even if Qubic claims benign intentions, centralization inherently introduces vulnerabilities. "Intent doesn’t matter," he stated, noting that economic incentives now pose a critical threat to decentralized networks [1]. The risk is further compounded by Ivancheglo’s announcement that Qubic will stop reporting its hashrate once it secures dominance, obscuring the true extent of its control [1].

Ivancheglo framed the initiative as a "test of economic incentives" for the broader crypto industry, arguing that such strategies could prepare networks for non-benevolent attacks. However, the community has pushed back, with Monero subreddit discussions speculating about his location and even veiled threats. One comment questioned whether the group had "friends in Belarus," referencing Ivancheglo’s ties to the country [1].

The incident underscores the fragility of decentralized systems when economic coercion replaces technical security. Unlike traditional 51% attacks, which rely on hashrate accumulation through mining hardware, Qubic’s approach weaponizes capital and strategic incentives. Dadybayo warned that this creates a "new attack vector" where market dynamics, rather than cryptography, dictate network control [1].

Monero’s reputation as a preferred currency for illicit transactions—used by nearly half of deep web black markets—adds another layer of complexity. While the project’s privacy features remain intact, any erosion of decentralization could undermine user trust, particularly for those relying on Monero’s anonymity [1].

As the conflict unfolds, the outcome hinges on miner allegiance and Monero’s ability to maintain decentralized governance. The event serves as a case study in the evolving tactics of blockchain competition, where economic leverage increasingly challenges traditional security paradigms. For now, the community’s resistance has curtailed Qubic’s ambitions, but the broader crypto industry is left to grapple with the implications of economically driven network takeovers.

Sources:

[1] [Monero ‘Economic Attack’ Receives Strong Community Response] [https://coinmarketcap.com/community/articles/688771f33c1f324d51532f12/].