The news that Qubic, spearheaded by IOTA's Sergey Ivancheglo, claims to have seized control of over 51% of Monero's hashrate isn't just some nerdy tech glitch. It’s a siren song for a region whose crypto dreams are blaring right now. While we’re not even talking about those chain reorgs double-spending nightmare denizens yet, the picture is still pretty scary. This should be deeply concerning, particularly for a network intended to be immune from such drawbacks. Frankly, it scares me.
I’ve experienced, as many of you have, the enthusiastic and hard-earned money that’s being poured into crypto all over Southeast Asia. From the bustling markets of Bangkok to the tech hubs of Singapore and Jakarta, people are buying into the promise of financial freedom and empowerment. Lots of folks are enthralled by the idea of leapfrogging established financial systems. This is particularly the case in geographies with limited access to financial services. What do you tell them when the systems they’re trusting—the very systems on which their lives often depend—are proven to be this susceptible?
Is Decentralization A False Promise?
Southeast Asia needs decentralization. The region is rich with opportunity for blockchain solutions. We will, if we can, take on supply chain management, cross-border payments, identity verification, and other such spaces. This Monero situation exposes a fundamental flaw: decentralization is only as strong as its weakest link. Qubic's "experiment," as they call it – this combative application of game theory – proves that economic incentives can be weaponized to undermine even supposedly robust networks.
About Monero Monero uses RandomX to prevent ASIC mining on its network, seeking to protect the CPU-based decentralization of its blockchain. Qubic was able to temporarily collect enough hashing power by encouraging miners through the promise of rich USDT rewards. On the one hand, they produced a "useful proof-of-work" system—still quite innovative—that serves to exemplify the limits of purely technological solutions.
This isn't just about Monero. It’s of course about the whole idea of decentralized finance (DeFi) in developing countries. If a relatively established privacy coin like Monero can be brought to its knees, what does that say about the countless other altcoins and DeFi projects popping up across Southeast Asia, many of which lack the resources and expertise to defend against sophisticated attacks?
The price of XMR tanked. Of course it did. The true cost – the loss of trust – is much worse. That cost will be disproportionately borne by those who can least afford it: the everyday people in Southeast Asia who are betting on crypto to improve their lives.
Ignoring Regulation Is Playing With Fire
Southeast Asia’s approach to crypto regulation is very much a patchwork quilt. Some are wary, some are hostile and many still don’t get it. This lack of clarity fosters a petri dish for scams, rug pulls, and yes, 51% attacks.
Governments must take responsibility and be willing to establish the clear and consistent regulatory frameworks that protect investors while fostering innovation. This means educating the public about the risks involved, requiring crypto exchanges to implement robust security measures, and establishing clear channels for reporting and resolving disputes.
Regulation alone isn't enough. The consequences need to befall the crypto community itself. Beyond looking for the next shiny solution, we need to encourage an environment of due diligence, critical thinking, and collaboration. Instead of looking for the next get-rich-quick scheme, put all of this energy towards establishing the sustainable, resilient blockchain ecosystems of the future.
Local Solutions For Local Problems
Returning to the Monero example, this highlights the importance of localized solutions. Just because something works in Silicon Valley or Switzerland does not mean it will work in Southeast Asia. What we are realizing is that we need to create blockchain technologies that are custom-fit for the region’s individualized needs and challenges. That means taking into account things such as internet connectivity, digital literacy, and cultural attitudes.
Let’s move beyond copying today’s DeFi protocols. Rather, we need to focus on where innovative new decentralized lending solutions might be developed to serve that massive unmet demand from the unbanked across Southeast Asia. We can’t get to that future without creating blockchain-based supply chain management systems that are customized to the region’s rich agricultural matrix.
Third, we need to encourage more collaboration and cooperation between local developers and entrepreneurs and local, regional, and state regulators. What we really want to do is create an ecosystem where knowledge and expertise is shared freely and where innovative solutions are truly celebrated.
Ledger’s CTO Nicolas Bacca on the cost of sustaining the Monero attack $75 million per day. That last figure is terrifying, to be honest. The cost of inaction is even greater, posing a very real threat of eroding public trust and stifling future innovation.
Monero 51% attack is more than a technical glitch. It's a wake-up call. As always, the promise of decentralization is in our hands. Here’s to our future in building generally secure, resilient and responsible blockchain ecosystems. Southeast Asia could be the most important region leading the crypto revolution. But only if we learn from this experience and take proactive steps to protect our investments and build a more sustainable future. We have to do it now — before Southeast Asia’s crypto dreams become a full-blown nightmare. Quite frankly, between MetaMask likely revealing its own stablecoin this week, the stakes are just getting higher. Let’s not continue to let innovation outpace security and responsibility.
