Monero's token value plummets to $252 following Qubic's takeover of 51% mining supremacy.
Qubic Takes Over Half of Monero's Hashrate: A Threat to Decentralisation and Network Security
A recent move by the Qubic project, led by IOTA co-founder Sergey Ivancheglo, has caused a stir in the cryptocurrency community. By controlling over 51% of Monero's hashrate, Qubic significantly impacts the decentralisation of the Monero network, raising concerns about potential 51% attacks.
This development has the cryptocurrency community divided. Some view it as an attack on the network, while others see it as an elaborate demonstration of blockchain vulnerabilities. The future of Monero's decentralisation remains uncertain, as developers, miners, and security experts debate whether the network can prevent sustained control by an outside entity.
In proof-of-work blockchains like Monero, controlling more than half of the total computing power allows an entity to potentially rewrite transaction history, block transactions, or carry out double-spend attacks. These actions jeopardise network integrity and user trust, as shown by exchanges like Kraken temporarily suspending XMR deposits.
However, Ivancheglo revealed on social media that DDOS attacks continued on Tuesday, describing it as "Monero Maxis returning the favour." Despite this, Qubic claims that Monero’s privacy features remain intact, with privacy, speed, and usability not compromised.
Key impacts on privacy and decentralisation include the loss of decentralisation, security risks, potential threats to privacy functionality, a drop in market confidence, and proposed countermeasures to defend against centralisation threats.
The attack has caused a sharp drop in Monero’s market cap and falling token prices, reflecting investor concerns about the coin's future security and decentralisation. To defend against such centralisation threats, the Monero community is discussing "detective mining" techniques and protocol upgrades like ChainLocks to detect and deter selfish mining and strengthen consensus.
Qubic's rapid rise is concerning because Monero uses the RandomX algorithm, designed to resist ASIC mining and maintain decentralisation. Qubic aims to take over all block rewards of Monero, but has so far stopped short, citing concerns about the potential impact on XMR's price.
The Monero Consensus Status dashboard shows signs of network disruption, with 60 orphaned blocks (valid blocks that were rejected) in the last 720 blocks, indicating blockchain instability. The cost of gaining majority hashrate on Monero is estimated to be $75 million per day.
The price of XMR has fallen 6-15% in the past 24 hours, with weekly losses exceeding 25%. Qubic has steadily increased its control over Monero's mining power, starting with less than 2% in May and growing to over 25% by late July.
Privacy-focused coins face an added challenge because if one party controls the network, it undermines the very privacy they are designed to protect. This situation has sparked concerns that other blockchains with similar security models could be vulnerable to the same type of takeover.
[1] Quartz [2] CoinDesk [3] Decrypt [4] The Block [5] CoinTelegraph
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