Monero has found itself in the middle of a large-scale 51% attack. According to Ledger CTO Charles Guillemet and SlowMist founder Yu Xian, mining pool Qubic has taken control of the majority of the network’s hashrate, leading to a serious blockchain reorganization. Qubic can now rewrite transaction history, initiate double spends, and block any transfers.
Qubic’s Dominance
Qubic had been increasing its share of Monero’s hashrate for several months. From mid-May to the end of July, its share rose from less than 2% to over 25%, and at certain times, the pool topped the power rankings. On August 12, it was revealed that Qubic had reached a controlling share of the network’s power.
Attack Mechanism
Reports indicate that with its current dominance, Qubic can invalidate blocks mined by other participants, depriving them of rewards and effectively becoming the sole block producer. Maintaining such an attack is estimated to cost $75 million per day. Despite the high expense, this type of takeover can almost instantly undermine trust in the network and remove incentives for other miners to continue operations.
Qubic’s Economics
Monero uses the RandomX algorithm, which is designed for CPU mining and resistance to ASIC centralization. Qubic applies a “useful proof-of-work” (uPoW) model, converting mined XMR into USDT and then using those funds to buy back and burn QUBIC tokens. This creates a deflationary model and adds liquidity within the Qubic ecosystem.
Risks to the Network
A 51% attack gives the controlling party the ability to rewrite the blockchain, execute double spends, and censor transactions. Similar attacks have previously paralyzed other networks: Ethereum Classic in 2020 and Bitcoin Gold in both 2018 and 2020. Smaller projects like Verge have also faced the consequences of hashrate concentration.
Market Reaction
Amid the attack, XMR has fallen 4,58% over the past 24 hours and 15,43% over the past week. Monero’s market capitalization is around $4.55 billion, while Qubic’s is approximately $339 million. QUBIC has risen 26,85% in the last 24 hours. Experts consider the possibility of a complete network takeover to be real.
