Inside Qubic’s controversial 51% Takeover of the Monero Blockchain

Monero, the main cryptocurrency focused on privacy, is faced with one of the most serious security challenges in its history.

QUBIC, a project led by the co-founder of Iota, Sergey Ivancheglo, says that it now controls more than 51% of the network’s hashrate. In blockchains secured by evidence of work evidence, it is the same method used by Bitcoin, this level of control can allow an attacker to rewrite the history of transactions, block transactions or make double expenditure attacks.

In a blog article, Quibic described control as an “experience” which was a “strategic and sometimes combative application of game theory”.

Developers, minors and security experts are now debating whether network decentralization is as robust as many thought.

What is a 51%attack?

In a blockchain of evidence of work, minors argue to add new channel transaction blocks. If a group controls more than half of the total calculation power, it can exceed all the other participants.

This level of control opens the door to a range of capacities that can undermine confidence in the network. These include reorganizations of the chain, generally abbreviated for “Reorg”, which consists in replacing the blocks previously confirmed by new ones. It also covers double expenses, which means sending the same token twice,

We can say that the most impactful part of a 51% attack is to censor transactions – receive certain confirmation payments – which is particularly relevant in the case of Monero given the accent on confidentiality

These attacks are not theoretical. Ethereum Classic has been struck several times in 2020, costing millions. Bitcoin Gold was confronted with similar incidents in 2018 and 2020. Smaller and rod tokens were targeted and destabilized.

Why Monero is still in danger

Monero uses Randomx algorithm to discourage extraction using integrated circuits specific to the application (Asics)Rather encouraging the exploitation of the processor. This design was intended to maintain the decentralized network. This is why the quick climb of Qubic is so important. From less than 2% of the Monero hashrate in May, it increased to more than 25% by the end of July and now claims to have crossed the 51% threshold.

Qubic manages a system of “useful work proof” which transforms the rewards of extraction of Monero into USDT, then uses these funds to buy and burn its own quibic tokens. The mechanism is unusual, combining a mining strategy with a token supply well. And that has regularly increased Qubic control over Monero’s hash.

The CTO Charles Guillemet said that “the maintenance of this attack would cost $ 75 million a day”, before adding that even if it is potentially lucrative, “it threatens to destroy confidence in the almost day of the day. Other minors are not encouraged to continue.”

Bitmex Research added: “Qubic says that the final objective is to take charge of all the monero block rewards, which essentially means a complete and sustained selfish mine. It is not clear if it can really achieve it. If this can be reached, the value of the room may fall.”

It did. The XMR of Monero is currently negotiated at $ 252, down 6% in the last 24 hours to worsen a decrease of 13.5% in the last seven days.

What does this mean for Monero?

In the blog post, Qubic said that taking control did not aim to break Monero, but to prove that economic incentives and a coordinated mining strategy can give effective control a greater protocol on much greater control.

Experience, says Qubic, should test whether the mineral resources could be profitably diverted from a target network in the economic loop of another protocol.

At his peak, Qubic claims that his monero mine was almost three times more lucrative than the traditional exploitation of Monero. A restructuring of its reward system, approved by its community, has strengthened payments to its validators and has removed minors from other monero swimming pools.

The first thrust of Qubic for the majority control was encountered with a defined service supported (Ddos) The attacks that disrupted peripheral services for more than a week but failed to eliminate its central network.

These attacks of the DDOS continued on Tuesday, revealed Ivancheglo on X, in what he describes as “Monero Maxis making the same”.

Qubic claims that she has so far stopped taking consensus fully, citing concerns about the potential impact on the price of XMR.

Are the other blockchains vulnerable to the attack?

Bitcoin hashrate is so high that an attack of 51% would be prohibitive. But the level of level level level level level are more vulnerable. The cost of obtaining the majority hash on Monero, Ethereum Classic or Bitcoin Gold is much lower.

Parts focused on confidentiality are faced with an additional challenge. Their nature resistant to censorship means that if a part controls the network, this undermines the very intimacy that they are designed to protect.