Monero, the popular, privacy-centric cryptocurrency launched in 2014, recently faced a major security crisis. At one point, the Qubic mining pool exceeded the all-important 51% threshold of the network’s hashrate. This consolidation led to fears of possible network censorship and brought attention to the ever present threat of centralization in otherwise decentralized crypto networks. The incident further highlights the need for effective security protocols to protect the trust and transparency that blockchain technology offers.
Qubic's mining pool attained a controlling 52.72% of Monero's network hashrate, surpassing the 51% threshold that could allow a single entity to manipulate the blockchain. If adopted, this development would represent a dramatic shift in Monero’s network power landscape. During its heyday, Qubic had dominated upwards of 45% of the hashrate. During the period of heightened influence, Qubic's mining pool hashrate peaked at 3.01 GH/s, reflecting its substantial control over the network's resources.
In response to our inquiry regarding the high hashrate Qubic confirmed this fact but stated that regardless its operations never stopped across the entire period. This is achieved by the mining pool rerouting a portion of its mining rewards in XMR into stablecoins, which are subsequently converted into QUBIC tokens.
The spike in hashrate was purportedly due to Qubic’s planned “economic demonstration,” executed from August 2 through August 31. This demonstration was focused specifically on stress testing Monero’s network resilience under duress. Experts agree that maintaining such an attack would be approximately $75 million per day. This figure illustrates the most debilitating economic sticking point to extended manipulation.
Sergey Chernykh, Monero’s lead developer for its mining software, has denied involvement in the hashrate increase. As the network grapples with the implications of this event, some experts suggest that broader adoption of protocols like P2Pool could help mitigate the risk of future 51% attacks on Monero.
As for the potential impact on affected users, Ledger’s Chief Technology Officer, Charles Guillemet, sounded a dire warning. He cautioned that a 51% attack represents an urgent weakness, potentially eroding faith in Monero’s decentralized facade. Though the incident led to tragedy, it has inspired new conversations. Experts and advocates alike have been demanding better protections against centralization to preserve the long-term viability of cryptocurrencies.
