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Crypto exchange Kraken has revealed a temporary halt on Monero (XMR) token deposits within its platform. This action is a reaction to the ongoing 51% assault on the Monero blockchain, a decentralized protocol focused on privacy.
For clarification, a 51% attack denotes a scenario in which a coalition of miners achieves control of over 50% of a blockchain’s mining hash rate. On Tuesday, August 12, Qubic, a venture led by IOTA co-founder Sergey Ivancheglo, asserted that it has acquired dominance over the majority of the Monero blockchain’s hash rate.
As per the Qubic mining pool, the 51% attack was carried out using a useful proof-of-work (uPoW or UPoW) method. As reported by Bitcoinist, the Qubic team is seizing half of the mining profits in XMR, converting them into USDT to purchase QUBIC tokens, and subsequently directing them to a burn address.
What Led Kraken to Halt Monero Deposits On Its Platform?
In an August 15 update on its site, Kraken announced that it is temporarily suspending the deposit of Monero tokens on its trading platform after uncovering that a single mining pool has commandeered over half of the blockchain’s aggregated hashing capability.
The cryptocurrency exchange stated:
This concentration of mining authority presents a potential hazard to network integrity. We are diligently monitoring the scenario and will reinstate deposits once we ascertain it is secure to do so. Trading and withdrawals for XMR remain fully functional.
Following Qubic’s assertion, emerging reports on the social media platform X indicated that a six-block reorganization had indeed occurred on the Monero blockchain, implying that the team possesses control over a substantial portion of the hash rate.
As Kraken pointed out, it is crucial to acknowledge that Qubic’s acquisition and dominance over the majority of Monero’s total hashing power could be remarkably damaging to the decentralized principle of blockchain technology. As it currently stands—with Qubic controlling 51% of the hash rate, the network faces threats of transaction censorship, double spending, and block reorganizations, jeopardizing the blockchain’s integrity.
XMR Price Summary
The response of the XMR price to these allegations regarding a 51% attack on the Monero blockchain has been relatively restrained. Although the altcoin experienced a loss exceeding 10% of its value immediately following the news and an additional 5% in the days that followed, the Monero token appears to be rebounding nicely.
As of this writing, the Monero token is estimated at around $265, demonstrating nearly a 12% increase in the past 24 hours. Meanwhile, CoinGecko statistics reveal that the altcoin is down by only 4% on the weekly scale.
The price of XMR on the daily timeframe | Source: XMRUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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