Monero security in question as Qubic claims 51% hashrate control

The crypto world is perplexed as to what is actually happening. A relatively unknown network claims to be able to take control of a top privacy coin without providing any proof, while industry observers remain skeptical. Nevertheless, the story has pointed to security issues in some crypto networks.

Qubic (QUBIC), which positions itself as “a decentralized network where unmatched scalable tech meets AGI,” said it had reached more than 51% of the hashrate, or the computational power, of Monero (XMR), the most popular privacy coin network.

In blockchains that use a proof-of-work (PoW) consensus algorithm, like bitcoin (BTC), securing 51% of the hashrate allows an attacker to double-spend coins while also damaging the reputation of the network. However, the team behind Qubic said they “chose not to launch the takeover yet, demonstrating their theory in action,” but managed to reorganize the Monero blockchain. Reorganization, or “reorg,” is when someone removes a block from a blockchain as a longer chain is created.

The “attackers” have also praised their own consensus model as “useful proof of work” and claimed that their end goal is “for the Monero protocol’s security to be provided by Qubic’s miners.”

However, multiple industry observers have rejected Qubic’s claims, saying that the project never reached 51%.

In a post shared by Riccardo Spagni, a former Monero lead maintainer, @tuxpizza backed his argument with data, showing that Qubic didn’t secure enough hashrate to stage a 51% attack and accused the team of lying in an attempt to spread panic and further harm the Monero network. Researchers at the BitMEX crypto exchange have also pointed out that Qubic managed to secure only around 30% of the Monero hashrate.

However, @tuxpizza has admitted that “Qubic is a concern” and “their hashrate and their selfish mining strategy is making smaller re-orgs possible,” especially in networks with relatively low computational power, such as Monero.

Meanwhile, Charles Guillemet, chief technology officer (CTO) at major crypto hardware wallet manufacturer Ledger, emphasized Qubic's suspicious actions, which only raised doubts about its claims and whether it could sustain such an attack, which could cost more than $100,000 per day.

According to the CTO, an attacker would need at least 33% of the network to make it profitable to execute a significant reorg, but sustaining the attack and fully controlling the protocol requires 51%.

“They may be unable to capture consensus outright, but their demonstrated hashrate is enough to execute impactful reorganizations through selfish mining. What’s most alarming is the shadowy nature of Qubic’s motives,” Guillemet concluded.

Others have also started discussing whether other smaller PoW networks, such as Dogecoin (DOGE), might be attacked by Qubic as well.

In either case, during the whole drama, the price of QUBIC, ranked 249th by market capitalization, jumped 18% in a day, while XMR, the 41st coin by market cap, fell 4%.