Kraken stops XMR deposits after the shock of the 51% attack

Monero, the well-known privacy-focused cryptocurrency, has come under the spotlight after Kraken suddenly suspended XMR deposits. According to data collected by blockchain industry specialists, the concentration of hashrate in a single mining pool like Qubic poses a concrete threat to the decentralization of the network. 

This decision was triggered by a critical event: the mining pool Qubic temporarily exceeded the 51% threshold of Monero’s global hashrate. At the heart of one of the projects most followed by privacy enthusiasts, this situation highlights a significant vulnerability that shakes the Monero network and could have repercussions on the entire sector.

What really happened with Monero: the mining pool Qubic briefly surpasses 51% of the hash power

The incident occurred when Qubic, a mining pool, temporarily exceeded the 51% threshold of Monero’s total hashrate, thus obtaining the theoretical ability to “manipulate” the blockchain. Although the incident was short-lived, it opens the door to well-known risks in the world of criptovalute, such as the 51% attack, block reorganization, and double spend.

Following this, Kraken, one of the leading exchanges in the market, has decided to suspend deposits in XMR “as a precautionary measure,” while keeping trading and withdrawal operations active.

“We have decided to suspend Monero deposits to protect our clients: the situation is being constantly monitored,”

a spokesperson for Kraken announced through the official help center.

How Monero mining pools put the blockchain at risk

The mining pool di Monero are used to combine the computing power of individual miners to increase the chances of finding new blocks and obtaining rewards. However, when computational power is excessively concentrated, a single pool could come to control the majority of the network. This scenario potentially implies the possibility of:

• 51% attack through block reorganization
• Generate orphan blocks and misalignments in the chain
• Complete double spend transactions, compromising trust in the currency

In the specific case, the concentration has already produced concrete effects:

• Reorganization of six blocks
• Identification of about sixty orphan blocks
• Volatility of XMR: price drop up to 17% in a few days, with variations between 8% and 17% according to recent market data

It must be said that the message spread by Qubic has sparked an internal debate: for some industry operators, in fact, the communication might include a “promotional” component, aimed at increasing the visibility of the pool rather than representing a constant and operational alarm.

Critical points: when is decentralization just an illusion?

The case between Kraken and Monero reignites the debate on the risks of centralization in cryptocurrencies. In the context of Monero, a hashrate that is too concentrated exposes the network not only to theoretical risks but also to tangible threats, such as blockchain manipulations and coordinated attacks. The consequences are not limited to orphan blocks or price variations but extend to the fundamental loss of user and market trust.

• Security at risk: a network with limited distribution can be manipulated more easily
• Markets on alert: the platforms activate countermeasures by blocking deposits or transfers
• Currency community: between those who demand maximum transparency and those who emphasize a downsizing of risks

The response of the Monero community and crypto platforms

The community Monero appears divided between skepticism and concern. Some argue that the actual hash power may not exactly reflect what is communicated, while others appreciate the promptness with which platforms have adopted security measures.

At the moment, based on public data and official channels (such as the Reddit forum r/Monero and updates from Monero Observer), no confirmed public cases of double spend have been documented, although block reorganizations have occurred and there has been a temporary decrease in confidence among investors and users.

The platforms, with Kraken at the forefront, have implemented extraordinary security measures: temporary suspension of XMR deposits, intensified network monitoring, and timely direct communications to users.

What happens in the event of a 51% attack on the Monero blockchain?

A 51% attack theoretically allows those who hold the majority of the hashrate to:

• Modify the order of transactions
• Execute double spending (double spend)
• Block or censor certain transactions
• Reorganize the chain, preventing the final confirmation of the blocks

Such phenomena jeopardize the integrity of the network and compromise the security that distinguishes Monero, one of the most appreciated cryptocurrencies for privacy and anonymity, as highlighted in several blockchain security whitepapers.

Anti-centralization strategies: how is the sector moving?

To prevent future critical episodes, several initiatives are already in place or under development:

• Continuous monitoring of the hashrate by exchanges and the community
• Collaborations between platforms aimed at promptly identifying anomalies in the network
• Raising awareness among miners to favor smaller pools and contribute to greater decentralization
• Introduction of incentives (reduced commissions, loyalty rewards) to promote a more equitable distribution of computing power

According to analysts cited by Decrypt and Bitcoin Magazine, transparency in communications and effective coordination among industry players are key elements to strengthen trust and contain the risks of attacks in proof-of-work blockchains. Data updated to June 2024 confirm how similar cases require timely interventions to minimize negative impacts.

Conclusions: maximum alert on Monero security, will the future of privacy truly be decentralized?

The episode involving Kraken and the potential manipulation of the Monero network by a single pool represents a wake-up call for the entire sector. Industry analysts note that the centralization of computing power emerges as a systemic issue, capable of questioning the very value of privacy-oriented cryptocurrencies.

The coming weeks are shaping up to be crucial, with attention focused on the community’s reaction and the effectiveness of security countermeasures. Meanwhile, the debate remains open on the real extent of decentralization and the ability of the Monero network to face future challenges, with risks and potential still to be assessed.

Main sources: Kraken Support, Decrypt, Monero Observer