Qubic says it has surpassed the 51% hashrate threshold, a critical tipping point in proof-of-work blockchains that can allow the dominant party to reorganize blocks, reverse transactions, or selectively censor payments.

The announcement immediately rattled markets: XMR dropped 6% in 24 hours to $252, compounding a 13.5% decline over the past week.

XMR dropped 6% in 24 hours. Source: Brave New Coin

The Mechanics — and Dangers — of 51% Control

In proof-of-work systems like Monero’s, miners compete to add new blocks to the chain. If a single entity controls more than half the network’s computational power, it can outpace all competitors — enabling chain reorganizations (“reorgs”), double spending, and transaction censorship.

Such attacks aren’t hypothetical:

Ethereum Classic was targeted multiple times in 2020, losing millions.
Bitcoin Gold suffered incidents in 2018 and 2020.
Smaller coins like Verge have been repeatedly disrupted.

While Bitcoin’s enormous hashrate makes such attacks economically unrealistic, mid-tier PoW networks remain vulnerable.

How Qubic Pulled It Off

Monero’s RandomX algorithm was designed to resist ASIC mining, encouraging CPU participation to keep mining decentralized. But Qubic’s rapid growth has put that theory to the test.

From less than 2% of Monero’s hashrate in May, Qubic climbed past 25% by late July and now claims to have crossed the 51% mark.

The project runs a “useful proof-of-work” model:

Mine Monero.
Convert rewards to USDT.
Use USDT to buy and burn QUBIC tokens.

The structure not only supports Qubic’s token economy but also offers miners above-market returns. At its peak, Qubic says Monero mining through its platform was three times more profitable than traditional mining.

Ledger CTO Charles Guillemet estimates sustaining such dominance could cost $75 million per day, warning that “while potentially lucrative, it threatens to destroy confidence in the network almost overnight.”

BitMEX Research added: “If Qubic can sustain this, it essentially means full and sustained selfish mining — something that could push XMR’s value much lower.”

The announcement from Qubic on X

The ‘Experiment’ — and the Fallout

Qubic has framed the move as a game-theory experiment, claiming the aim was not to “break” Monero but to demonstrate how coordinated economic incentives can allow a smaller protocol to seize control of a larger one.

A vote within Qubic’s community restructured reward payouts to its validators, further accelerating the draw of miners from Monero’s existing pools.

Monero supporters have responded with distributed denial-of-service (DDoS) attacks on Qubic’s peripheral services, though the project’s core systems remain online. Ivancheglo says those attacks are ongoing, calling them “Monero maxis returning the favor.”

Qubic maintains it has so far stopped short of exercising full consensus control, citing concern over the impact on XMR’s price — but the mere ability to do so raises fundamental questions about Monero’s resilience.

Monero was delisted from Binance in 2024, as authorities seek to make privacy coins harder to use.

A Warning for Other Blockchains

While Monero’s situation is particularly alarming due to its privacy-preserving mission, the vulnerability extends to many mid-cap proof-of-work coins. The economics of a sustained 51% attack are far less daunting for these networks than for Bitcoin, making them attractive targets.

For Monero, the threat isn’t just about double spends or chain reorgs — it’s about the possibility that a single entity could undermine the very censorship resistance and anonymity that define its value proposition.

 

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Filed under: Bitcoin - @ August 12, 2025 11:08 pm