Direct from the desk of Dane Williams.
Single Monero mining pool closes in on 51% of network’s hashrate.
The largest Monero mining pool, MineXMR, continues to build on its distribution of the network’s hashrate.
Checking the following live Monero pools table, you can see that the single pool has now hit 47.5%:
If it reaches 51%, the pool would technically be able to pull off a 51% attack on the Monero network and wreak some serious havoc.
What is a 51% attack?
A 51% attack is when a single entity gains control of a majority of a network’s computing power.
This allows the attacker or associated group to double-spend the cryptocurrency by choosing which blocks to process.
Essentially, they’re printing money for themselves.
When it comes to talking about 51% attacking a network, you can’t do it without looking at Ethereum Classic.
On networks like ETC, these attacks happen embarrassingly often.
But while 51% attacks are commonplace on smaller networks, they are almost impossible to pull off on larger networks such as Bitcoin.
When you consider how much computing power it would take to amass the hashrate required, you can see why the current decentralisation of the Bitcoin network makes it so prohibitively expensive to pull off.
They don’t call Bitcoin the most secure network in the world for nothing.
What this means for Monero (XMR)
But bringing things back to the issue at hand, let's take a look at what this at least could mean for Monero.
When it comes to Monero, XMR’s position as the leading privacy coin actually adds an extra layer of intrigue to this story.
The security of this particular network is paramount to the entire industry, not just those invested in the coin.
If the Monero network remains vulnerable to a 51% attack, then it won’t matter if Monero can be traced or not.
All of the privacy advantages gained from using Monero over Bitcoin will be mute because the network will be able to be controlled by a single actor.
Whether MineXMR has good or bad intentions doesn’t matter.
All that matters is that they have the technical ability to take full control of the network and all transactions conducted on it.
What next for Monero (XMR)?
The final question for Monero now becomes why do miners continue to deploy their hash power to MineXMR and not spread it around?
Well, a common misconception is that by joining a large pool, you stand a bigger chance of finding a block and therefore will earn more.
But unfortunately this is not the case.
Not to mention that if the network is compromised in this way, then it doesn’t matter anyway!
This is what makes the fact they are even allowing themselves to amass close to the 51% hashrate required to pull off an attack so scary.
Monero being 51% attacked by MineXMR has the potential to rock the entire privacy coin space and even flow into the entire crypto industry as a whole.
Whether you’re a Monero (XMR) holder or not, watch this space.
Best of probabilities to you.
Update: MoneroXMR hashrate drops below 40%
Less than 24 hours after the MineXMR mining pool was nearing the critical 51% hashrate, we can see the community has rallied:
Under 40% now!
And with that, Monero is no longer at risk of being 51% attacked by MineXMR.
Really, any time that the Monero hashrate approaches even 40%, the community needs to come together and decentralised the pools.
I'd take it a step further and say that even the top 5 pools shouldn't have the combined hashrate to potentially collude.
Whether any pool says they're not a bad actor should be irrelevant.
The risk is just not worth it.
Hopefully this will be used as a lesson on the dangers Proof of Work blockchains always face and the Monero community will continue to work towards decentralising their network.