Qubic's Monero "Economic Attack" Triggers 1st-to-7th Hashrate Plunge Amid Community Backlash

Privacy-focused cryptocurrency Monero is navigating a contentious standoff with Qubic, a rival blockchain project led by Sergey Ivancheglo, as the latter’s so-called “economic attack” on the Monero network has triggered a sharp backlash from the community. Qubic, which had previously held the top spot on Monero (XMR) mining pool rankings, fell to seventh position by hashrate as of Monday, according to MiningPoolStats data. The decline followed community scrutiny over Qubic’s strategy to incentivize Monero CPU mining, with the mined XMR funneled into buybacks and token burns for the Qubic ecosystem, a move Ivancheglo admitted was an open attempt to seize control of the network [1].

The controversy began with a June 30 blog post from Qubic, explaining that its miners would generate “real-world tasks” by mining Monero, thereby strengthening the Qubic economy. However, Ivancheglo’s subsequent social media posts revealed a more aggressive agenda: once Qubic controlled a majority of Monero’s hashrate, it would reject blocks mined by other pools, effectively rendering XMR mining viable only on the Qubic network. This approach, described by Ivancheglo as a “competition of ideas,” has been criticized as a covert effort to destabilize Monero’s decentralized structure [2].

The community’s response has been swift and vocal. Qubic’s hashrate drop reflects a loss of miner trust, with users and developers warning of the risks posed by a 51% attack. Dan Dadybayo, an analyst at Unstoppable Wallet, highlighted that such control could enable Qubic to orphan blocks, delay transactions, or enforce protocol changes, regardless of its stated intentions. “Intent doesn’t matter,” Dadybayo emphasized, noting that even well-intentioned centralization creates censorship risks and undermines the core principles of decentralization [3].

The situation has escalated further as Ivancheglo announced that Qubic would cease reporting its hashrate starting next Wednesday, a move he justified as a “covert operation phase” to assess the attack’s potential impact. This lack of transparency has deepened concerns, with Monero subreddit users expressing skepticism and even issuing veiled threats against Ivancheglo, referencing his alleged location in Belarus. Meanwhile, Ivancheglo has framed the scenario as a test of the crypto industry’s resilience against “non-benevolent attacks,” though critics argue the tactics blur ethical lines in blockchain competition [1].

Monero’s developers and community have rallied to mitigate the threat, emphasizing the network’s robust consensus mechanisms and active development. Past instances of coordinated miner efforts have historically countered similar risks, but the unique economic incentives introduced by Qubic present a novel challenge. Analysts warn that smaller blockchains like Monero remain inherently vulnerable to hashpower shifts driven by profit motives, even if technical vulnerabilities are absent. The debate underscores broader tensions in the crypto space: while economic competition is often seen as a market-driven inevitability, its application to network security raises unresolved governance questions [3].

As the standoff unfolds, the outcome will likely hinge on Monero’s ability to maintain miner participation and implement protocol upgrades that deter hashrate centralization. For now, the incident serves as a case study in the evolving risks of blockchain ecosystems, where the line between innovation and exploitation grows increasingly thin.

Sources:

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

[2] Cointelegraph, Monero 'Economic Attack' Saw Strong Community Response, https://cointelegraph.com/news/monero-economic-attack-saw-strong-community-response

[3] Reddit, r/Monero, Skepticism Sunday – July 27, 2025, https://www.reddit.com/r/Monero/comments/1maijh5/skepticism_sunday_july_27_2025/