Monero: The Fear Of a 51% Attack

Monero is the best known privacy coin on the space, its privacy features are so good that the FBI put a bounty that can be retrieved by anyone who cracks its privacy. This bounty has been live for years and nobody claimed it. That says a good amount about how private Monero really is.

Despite being so good at its job, in the last few days Monero is suffering from the fear of one of the most common attacks a blockchain has to deal with, a 51% attack.

What is a 51% attack?

This type of attack can be done by anyone who has more than 51% of the mining hashrate. Having more than this means that the person who can do the attack has control over the blockchain. This person can start to reorganize the blockchain and double spend the coins they mine. This type of attack can take a little time to be noticed which means that the attacker can double spend the coins for some time, hurting the blockchain.

This was feared by the Monero community because mineXMR pool had more than 50% of the hashrate for some hours and everyone was alerting the miners to change to smaller pools to decentralize the hashrate. They were successful on alerting the miners and the hashrate fell down to the fortys again, but even this percentage of hashrate is to high for only one pool. At this time the community is still trying to get the hashrate even lower.

Although everything went fine and mineXMR seemed to have no intention of doing an attack, hashrate distribution is very important to secure a blockchain. Some chains like Ethereum Classic already suffered from this type of attack and had some consequences from it, like high confirmation times on the blocks.

Monero has a pool to solve this type of problems called P2Pool which uses a system to prevent this situations. Even if P2Pool had more than 50% of the hashrate it would be impossible to attack the blockchain, so the best pool you can use for Monero mining is definitely P2Pool. Although it's more difficult to setup and requires to download the Monero blockchain it's worth it.

This type of attacks target coins that use a Proof of Work system but a similar attack can occur on a Proof of Stake system if a validator owns more than 50% of the validator nodes.

Decentralization is the key to every blockchain in every aspect and spreading the hashrate across multiple pools is important. A smaller pool might get less rewards during some time but in the course of time it will average out and pay exactly what bigger pools are paying.

Best Regards,

Cryptopeach