Monero's 51% Attack: A Rigorous Look at the Real Threat Level

The hype about Qubic’s possible 51% attack on Monero is already getting out of hand. Before we all start panicking and hoarding our XMR, let's inject some cold, hard data into the equation and dissect what's really going on. RIP Monero as we know it. Monerium—ngmi? Just kidding. Or perhaps it was a highly useful stress test in the form of an aggressive acquisition.

Spoofed Hashrate or Legitimate Threat

The new anxiety comes from Qubic’s recently-reported control of almost 27% of Monero’s hashrate. Accusations of illegal "hashrate spoofing" are dropping gasoline on the flames. Is it spoofed? If so, does it even matter? Let’s connect this to something unexpected: election polling. Think of reported hashrate as a poll. Public opinion, as we warned last month, just because a poll tells you a candidate is leading doesn’t mean they’re leading. You need to know how many people participated, what their methodology was, and where there might be bias.

In the same spirit of healthy skepticism, we should be asking some hard questions about how exactly Qubic is measuring and reporting its hashrate. Are they accurately accounting for all factors? Are there incentives to overreport? If the hashrate is actually spoofed then it’s like a mirage army. It’s deeply scary to experience, but at the end of the day, it’s powerless to do any tangible damage.

Yet even assuming 27% effectiveness is true, continuous control is required to activate the attack.

Attack Profitability: Show Me the Money

The people forgetting the economic realities of 51% attack launchings are legion. It's not just about having the hashrate; it's about making a profit. Let's be brutally honest: attacking Monero is a risky business proposition. That’s because you’re investing a lot of capital in order to provision the required computing power. Then, you expose yourself to reputational risk.

Let's look at the potential reward. The main reason that someone would want to perform a 51% attack is double-spending. Is the potential upside enough to outweigh all the risks and costs? How does that stack up against the profits their miners would make by mining other cryptocurrencies with the same hardware? Can it go up against potential earnings from selling cloud computing services?

Think about it like this: launching a 51% attack on Monero is like robbing a bank. It requires great resources and is fraught with potential for violence, failure, and jail time. Moreover, it might barely break even. Why not channel all that talent and passion toward creating a real company. The only thing separating this attack from robbing a bank is that the latter is more complicated to execute.

Solutions Exist: Let's Get Practical

Instead of panicking, let's focus on solutions. CFB himself once proposed raising transaction confirmations, a smart and straightforward short-term solution. We can go further.

Yet the Monero community has never been short on resilience or resourcefulness. We’ve been through tough times, and we’ve come out the other side stronger. This situation is no different. The answer is to avoid panic, focus on the data and come up with realistic solutions.

• Increase confirmations: As CFB suggested, this buys time.
• Adaptive block size limits: Dynamically adjust block sizes to make attacking more difficult.
• Diversify mining pools: Encourage more users to join decentralized pools like P2Pool. We saw this work during the MineXMR incident.

In Monero’s case, ultimately, this entire episode could be a net positive. It’s a stress test, a fire drill that prod us to take a hard look at our own defenses and discover smoking holes in our armor. It illustrates the key lesson of decentralization—the need for perpetual vigilance.

Don't panic. Do your research. Support decentralized mining pools. And most importantly, stay informed. The continuing success of Monero lies in the hands of a community that’s active, educated, and willing to defend. Let's not let fear dictate our actions.

Ultimately, this entire episode could be a good thing for Monero. It's a stress test, a fire drill that forces us to examine our defenses and identify vulnerabilities. It also highlights the importance of decentralization and the need for constant vigilance.

So, what should you do?

Don't panic. Do your research. Support decentralized mining pools. And most importantly, stay informed. The future of Monero depends on a community that's engaged, informed, and ready to act. Let's not let fear dictate our actions.