The ZCash mining pool operated by ViaBTC has gained over half of the network’s hash power, making it vulnerable to a 51% attack.
To protect users from such an event, Coinbase has introduced precautionary restrictions on ZCash transactions.
Facing the threat that ViaBTC could manipulate its control of the network, Coinbase has increased the confirmation threshold for ZCash transactions to 110 blocks.
The higher confirmation threshold is expected to increase ZCash deposit times from around 40 minutes to approximately 2.5 hours.
Coinbase has also imposed restrictions on ZCash trades, moving the market into limit-only mode to reduce the impact of any volatility, the post explained.
To address its concerns, the crypto exchange said it is also in discussions with ViaBTC and Electric Coin Company, the team behind Zcash.
In a PoW system, miners dedicate processing power to validate transactions and add new blocks to the blockchain by calculating cryptographic hashes.
An individual computer’s hashrate refers to the number of hashes that it can calculate per second. A network’s combined hash power is the sum of active miners’ hashrates at any moment.
Because hashes process transactions and mint new coins, if a single party acquires over 50% of the network’s hash power, it introduces significant security vulnerabilities.
For example, with control of over half of ZCash’s hash power, ViaBTC could potentially reverse transactions and spend the same coins multiple times.
It could also prevent new transactions from gaining confirmations, allowing the largest miner to delay or freeze payments.
In an email, ViaBTC told CCN that Zcash hash rates distributed across its pool have exceeded 51% of the network’s total hashing power.
“We fully understand the concerns and unease about the excessive concentration of Zcash hash rate within one mining pool,” the company said.
However, it added that “ViaBTC itself does not control over 51% of Zcash hash rate, as we do not own all the hash rates connected to our platform,” which are owned by individual pool participants.
“Technically speaking, ViaBTC merely hosts the Zcash hash rates for a temporary period,” it asserted.
The firm said user experience remained its top priority and that it would defend the rights of Zcash miners to join the ViaBTC pool or switch to another pool “at any moment.”
“We are keenly aware of how the risks of a 51% attack threaten blockchain security and integrity,” ViaBTC said. But it insisted that “we have neither the motivation nor the ability to gather hash rates and launch a 51% attack.”