- Qubic claims it now controls over 51% of Monero’s global mining hashrate.
- This level of control allows for potential reorganization of blocks and transaction censorship.
- Qubic representatives say the action is a network stress test, but security experts are concerned.
- Monero’s price has dropped over 6% in 24 hours after the news and more than 16% in the last week.
- Other small cryptocurrency networks have previously been destabilized by similar concentrated mining attacks.
Qubic, a project led by former IOTA co-founder Sergey Ivancheglo, has announced it controls more than 51% of the global mining hashrate for the privacy-focused cryptocurrency Monero. This announcement was made public as a way to assess the strength of Monero’s defenses, with the stated intention of conducting a network “stress test.”
According to the statement, Qubic’s “useful proof-of-work” (uPoW) model converts Monero (XMR) mining rewards into USDT stablecoins, which are then used to purchase and burn QUBIC tokens, aiming to create a deflationary effect within its own ecosystem. From mid-May to late July, Qubic‘s network share increased sharply from under 2% to over 25%, eventually claiming more than half of the total hashrate.
A 51% attack occurs when a single group or entity achieves control of the majority of a blockchain’s computing power. With this level of control, the entity can potentially reorganize past blocks, block or censor transactions, and attempt double-spending. Charles Guillemet, CTO at Ledger, warned that Monero “appears to be in the midst of a successful 51% attack.” He cited visible signs of major chain reorganization on the network. Other industry figures, such as Yu Xian of SlowMist, questioned whether Qubic’s model was economically sustainable.
Monero uses RandomX, a mining algorithm designed to resist hardware centralization. The chain’s current stress comes as similar attacks have impacted other cryptocurrencies in the past. For example, Ethereum Classic and Bitcoin Gold faced repeated incidents in 2020, which resulted in millions of dollars in losses. Other smaller cryptocurrencies, like Verge, have also been targeted by concentrated hashrate attacks, demonstrating the risks of mining power centralization.
As a result of recent events, Monero’s XMR token dropped by 6.65% in the last 24 hours and has declined by more than 16% over the past week. Whether this episode results in a hostile takeover or remains a network resilience test, the impact on token price and community trust is already apparent.
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