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Monero Surges 7% Even After Facing an 18-Block Reorganization

Monero Rises Over 7% Despite Suffering 18-Block Reorg

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The privacy token of Monero increased by over 7% even though its blockchain experienced an 18-block reorganization that reversed approximately 117 transactions and incited community worries regarding the future of the Monero ecosystem.

The security incident was executed by the group behind Qubic, a layer 1 AI-centric blockchain and mining pool that accrued 51% of the hashrate on Monero and performed a six-block reorg in the previous month.

The reorganization commenced at block 3499659 on Sunday at 5:12 am UTC and concluded at block 3499676 about 43 minutes later, as per sources operating Monero nodes who disclosed their command-line interfaces on X.

The latest security incident concerning Monero was also verified by cryptocurrency protocol analyst Rucknium on GitHub.

Interestingly, the Monero (XMR) token traded relatively stable during the reorg, and shortly after eight hours, it underwent a 7.4% surge from $287.54 to $308.55, according to CoinGecko statistics. XMR succeeded in climbing even as the wider market dropped around 1% on Sunday.

Crypto podcaster xenu — one of the initial sources to announce Monero’s reorg — indicated that Qubic may have been exploring methods to “stem the loss” of XMR’s value.

XMR’s price fluctuation over the past 24 hours. Source: CoinGecko

The reorg — asserted by xenu as the most significant in the network’s history — has initiated conversations about how to manage the privacy-chain in the future.

The recurring assaults emphasize how proof-of-work blockchains can be compromised when they lack adequate decentralization, obstructing their viability as a monetary network.

“Personally, I do not regard the Monero network as dependable at this juncture. I will cease accepting XMR for payments until this issue is addressed,” remarked crypto expert Vini Barbosa, on Sunday via X.

Monero may need to centralize to mitigate Qubic’s sway

Rucknium mentioned it is “highly probable” that Monero node operators will temporarily begin using Domain Name System (DNS) checkpoints — where nodes retrieve trusted block information from community DNS servers — as a potential solution to avert further reorgs.

This, however, comes at a cost to centralization, which some might argue has already been compromised by Qubic’s more than 51% hashrate portion.

“If no one within the Monero community treats the issue of block reorganization with seriousness, this Sword of Damocles will perpetually loom over Monero,” Yu Xian, founder of blockchain security enterprise, SlowMist, expressed on X.

Monero has deliberated solutions to avert 51% attacks

Previously, the Monero community considered a potential overhaul of its proof-of-work consensus mechanism to enhance the network’s resistance to 51% attacks.

Among those suggestions were localizing mining equipment, transitioning to a merge mining algorithm, allowing XMR to be mined alongside Bitcoin (BTC) and other digital assets, and implementing Dash’s ChainLocks solution.

As of now, no solution has been successfully executed, and Qubic continues to exert considerable influence over the privacy-oriented network.

Related: Kraken halts Monero deposits following 51% attack

Monero had implemented a 10-block lock mechanism to safeguard transactions from reorgs up to 10 blocks, but the recent 18-block reorg surpassed that safeguard, Rucknium noted.

Despite the network breaches, XMR has remained relatively robust since the initial reports of Qubic’s acquisition around July 28 — declining only 5.85%.

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