Key Takeaways
- Monero experienced a record 18-block reorg on Sunday, Sep. 14 that invalidated 118 transactions.
- The incident comes nearly a month after Qubic’s 21% attack
- Despite the ongoing threats to Monero’s network security, XMR surged 7% on Sunday.
Despite ongoing concerns about network security following last month’s 51% attack by Qubic, XMR has made a strong recovery, surging to over $300 for the first time since 2021.
The price rise comes even as Qubic continues to demonstrate Monero’s vulnerability, reversing as many as 118 transactions in the blockchain’s longest ever block reorganization.
What Is a Monero Block Reorg?
A Monero block reorganization, usually referred to as a reorg, occurs when two miners find valid blocks at roughly the same time.
When this happens, both versions of the ledger get propagated, and the network is temporarily split until one version of the chain accumulates more work. This invalidates the other fork, whose transactions are discarded and resubmitted to the mempool.
While one or two-block reorgs are fairly common, researchers are concerned that the record 18-block reorg that occurred on Sep. 14 was the result of Qubic’s large share of Monero’s hashrate.
Qubic 51% Attack Explained
Qubic is a Monero mining pool that lets individual miners who contribute computing power share in the whole pool’s rewards.
On August 12, Qubic publicly stated that it had crossed 51% of Monero’s hashrate, accumulating more mining power than the rest of the network combined.
With their smaller total hashrate compared to larger blockjchain networks like Bitcoin, privacy coins are especially susceptible to such attacks. For example, in September 2023, a mining pool operated by ViaBTC gained over half the hash power of ZCash.
These events significantly undermined confidence in network security. With more than half of a blockchain’s hashrate, a majority miner could double-spend coins, or censor transactions by choosing not to include certain transactions in blocks.
Qubic’s team have repeatedly described their maneuver more as a stress test or “experiment” rather than a full-blown hostile attack. They suggest the move was intended to force the Monero community to consider the real threat of a 51% attack and prepare defenses.
Monero Block Reorg
While there is no evidence that Qubic has repeated another 51% takeover, blockchain security experts have blamed the recent block reorg on the pool’s continued control of a significant portion of Monero’s hash rate.
On a Github discussion thread where Monero developers have been discussing how to resolve the threat posed by Qubic’s 51% attack, a blockchain researcher with the handle Rucknium confirmed that the reorg invalidated 118 transactions.
“Since it was a re-org in excess of 9 blocks, the 10-block lock did not protect all transactions in the orphaned chain from invalidation,” they stated, adding that “re-orgs in excess of 9 blocks are unacceptable.”
XMR Deposit and Withdrawal Challenges
In the wake of Qubic’s 51% attack in August, Kraken temporarily suspended XMR deposits.
“As a security precaution, we have paused Monero (XMR) deposits after detecting that a single mining pool has gained more than 50% of the network’s total hashing power. This concentration of mining power poses a potential risk to network integrity,” the exchange said.
With planned upgrades to resolve the problem still underway, Kraken has blamed the “current conditions of the Monero network,” for delayed withdrawals.
Since the start of September, the crypto exchange has been forced to pause XMR withdrawals at least three times. “Kraken may halt deposits and withdrawals at any time and delay crediting at its discretion,” it warns.
Monero Price Jumps 7%
Despite fallout from Friday’s block reorg, the price of XMR jumped more than 7% on Sunday, Sep. 14, and remained high into Monday.
The cryptocurrency’s latest rally is somewhat paradoxical, given the concerns about network security and decentralization.
The strong rebound may suggest confidence in ongoing efforts to secure the network, or simple relief that the reorg didn’t result in any coins being double spent. It may also reflect renewed attention from traders as the token has been in the news.
Another possibility is that the price surge indicates a short squeeze, with traders who bet on XMR going down being liquidated when the reorg didn’t catalyze a price crash.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
