Privacy coin under pressure as mining pool gains majority control
Crypto exchange Kraken has temporarily halted Monero (XMR) deposits after confirming that a single mining pool had seized more than 50% of the network’s total hashing power. The move comes amid rising concerns over the security of privacy-focused blockchains, as one entity controlling the majority of computational power can manipulate transaction ordering and double-spending.
Monero Faces Network Turbulence
Monero, the 29th largest cryptocurrency by market capitalization, is valued at around $6 billion. Known for its privacy-preserving features, Monero has long been a favored choice for users seeking untraceable transactions. However, the recent 51% attack — a takeover of network control by the Qubic mining pool — has cast doubt on the resilience of the protocol.
Kraken explained its decision clearly: “As a security precaution, we have paused Monero deposits after detecting that a single mining pool has gained more than 50% of the network’s total hashing power. This concentration of mining power poses a potential risk to network integrity.”
Qubic’s Hashrate Takeover
Qubic, a layer-1 AI-focused blockchain project and mining pool, announced that it had surpassed the 51% threshold earlier this week. The group claimed it successfully reorganized six Monero blocks, a sign of effective dominance over the chain’s validation process.
Industry analyst Sergey Ivancheglo, who has been vocal about Qubic’s role, said the pool had experienced temporary setbacks from distributed denial-of-service (DDoS) attacks, but eventually recovered its strength. “This event marks a pivotal moment in crypto security,” Qubic representatives said, underlining the unprecedented nature of a $300 million AI protocol overpowering a $6 billion privacy protocol.
Community Reaction and Risks Ahead
Monero supporters have pushed back against claims of a full-scale takeover, but security experts argue that the situation exposes a long-standing vulnerability in proof-of-work blockchains with limited mining diversity.
The attack underscores a fundamental risk: when mining power becomes concentrated, even the most established privacy coins are not immune. For exchanges like Kraken, pausing deposits is seen as a necessary safeguard until the network stabilizes.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.