The famous privacy coin Monero (XMR) was subjected to a 51% attack, where a smaller blockchain called Qubic managed to take control of more than half of the mining power (hashrate) in the Monero network, according to statements by Charles Guillemet, the CTO of Ledger.
What is a 51% attack?
A 51% attack means that a single entity controls more than half of the mining power in the blockchain network, allowing it to rewrite the transaction history, execute double spending, and prevent other transactions from being confirmed.
Incident details:
⚪ Qubic, with a market cap of less than 300 million dollars, controlled more than 51% of Monero's mining power, which is valued at around 6 billion dollars.
⚪ The attack allowed Qubic to reorganize blocks on the Monero network, threatening to write a new transaction history.
⚪ The daily cost of operating this attack is approximately 75 million dollars, with the potential for short-term profits.
⚪ After the attack, the price of XMR dropped by about 9%, and it declined by 28% over the last month.
⚪ Qubic attracted Monero miners through a “pay-to-switch” campaign with higher rewards, enhancing its control over the network.
⚪ Half of Qubic's mining profits are distributed to miners, while the other half is used to burn (delete) QUBIC tokens, supporting its value.
The impact of the attack on Monero:
⚪ Loss of trust may drive other miners to withdraw, making Qubic the sole controller of the network.
⚪ This situation could lead to a serious security and stability crisis in the Monero network.
⚪ The chances of recovery for Monero are limited, with the possibility of full takeover by Qubic.
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