Cryptocurrency exchange Kraken has temporarily suspended Monero deposits after the Qubic mining pool managed to gain control of over 50% of the network's hashing power, raising security concerns.
Reasons for Deposit Suspension
Kraken has halted Monero deposits following a confirmed 51% attack by the Qubic mining pool, which briefly gained control of more than half of Monero's network hashing power. This attack resulted in the orphaning of approximately 60 blocks, causing network unease. Kraken's CEO Jesse Powell stated: "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."
Market Reaction
The cryptocurrency market reacted with a nearly 14% drop in XMR's price. Monero holders and traders are facing uncertainties regarding network security, while trading and withdrawals for XMR remain unaffected.
Security Issues in PoW Systems
The attack highlighted potential weaknesses in blockchain security, prompting concerns from the crypto community regarding the transparency from Monero developers. Despite the incident, no direct losses have been reported by major institutional investors, indicating a need for improved security measures in proof-of-work (PoW) systems.
The incident emphasizes the importance of enhancing network security and resilience against concentrated mining power. Historical attacks have often led to upgrades and improvements in blockchain networks.
