Monero has been 51% attacked & is now under centralized control Qubic can rewrite XMR's history, censor & double-spend TXs! All PoW chains are vulnerable, as their security budget is abysmal compared to PoS The attacks will continue, foreshadowing BTC's fall; PoW is cooked! 🧵 The Full Story: It all started out in May as a way to optimize profit for the Qubit validators, as they were able to dedicate spare compute cycles to mine XMR on the side (2% of XMR hashrate) This ended up being so successful that the Qubic formalized its decision by June to fully integrate XMR to help fund the Qubic ecosystem. This led to the Qubic mining pool growing rapidly (10% of XMR hashrate) This is also when Qubic started offering additional token incentives to XMR miners. As Qubic was now able to offer 3x the reward of standard XMR pools! Only after all of this did Qubic publicly announce its intention to completely take over the network by gaining a majority share & carrying out a 51% attack! By late July, the Qubic hash rate was approaching a majority share (40% XMR hashrate) Qubic itself was framing this as a "demonstration of power" rather than a malicious attack. Calling it a "tech demo" for decentralized AGI computing... There were DDoS attacks against Qubic starting on the 5th of August, which slowed down Qubic's hashpower accumulation. However, this counterattack was not enough; As on the 11th of August, the "selfish miner" attacks began, which allowed the Qubic mining pool to reach a majority share of hashpower by the 12th of August: To prove their control over the network, they did a 6-block re-org. While orphaning over 60 blocks in the process. Effectively rewriting XMR's history, destroying XMR's assumed immutability, censorship resistance & trustworthiness That is because this also allows Qubic to carry out double-spend attacks, which could potentially defraud people, protocols & exchanges out of a lot of money. Which is exactly why most major exchanges have suspended withdrawals & deposits. Because they run the risk of getting ripped off by Qubic, as they now technically have that capability! To add insult to injury, this attack was very cheap for Qubic to carry out; it cost them around $1k in lost revenue. To carry out the same attack for an entire day would only cost around $150k... Which is peanuts for a blockchain that was worth $6B at the time! As of today, the price has dropped significantly & the hashrate has dropped over 30%... Demonstrating the viscous cycle of a failing PoW system Qubic is framing itself as an ally of XMR & claims it only wanted to make a point & does not intend to attack XMR again... That this point can even be made in the first place is exactly what is so damning: Lessons Learned: The fact that the token incentives for a 300M PoS chain are sufficient to take over a 6B PoW chain speaks louder than words, proving PoW's inherent inferiority! That is what also makes this a unique sneak peek into BTC's future, too Applying the token economics of a smaller PoS chain to fund a 51% attack on a larger PoW chain is not something I had thought of before. The incentive of free "marketing" might even be enough to pull that off at that scale. As I most likely never would have talked about Qubic otherwise, & look at all of the attention we are giving it now! The introduction of political narrative also certainly muddies the water, where some might perceive the attacker as an ally instead. Further fracturing the defense effort... Another interesting observation is that XMR actually does have tail inflation... Teaching us that even adding tail inflation to BTC when the crisis inevitably hits might also not be enough by itself to defend from an ongoing attack! Another eye-opening fact is that XMR actually has slightly better relative security compared to BTC when measured as a ratio against market capitalization: XMR: $55M (block reward) x 0.51 = 29M (yearly security budget) / $6B (market cap) = 0.5% (Ratio of security measured against market cap) BTC: 19B x 0.51 = $9.7B / 2.2T (0.4%)! For reference on the security budget & security ratio of PoS chains: ETH: 542B+3.33B x 0.29 x 0.33 = $52.2B (10%) SOL: 102B+5.26B x 0.68 x 0.33 = $24.1B (23%) ADA: 29B+0.7B x 0.60 x 0.51 = 9.1B (31.3%) It is ridiculous how much more secure these PoS chains really are compared to PoW! All while BTC's security ratio has been falling off a cliff since its founding & the security budget has been shrinking for over five years now. Allowing the cost vs benefit analysis for a potential attacker to steadily improve over time This is all adding to the laundry list of competing interests, responses, factions & incentives at play during a 51% attack on a PoW chain. We can at least draw the conclusion that when this all finally plays out on BTC that it will be even messier & ever more chaotic than we first thought Who is Next: The Qubic community has just voted to target Dogecoin next! This same playbook can be applied to chains mined with ASIC's as the majority of the hashrate came from "bribing" pre-existing miners using the Qubic token incentives So that means an attack on DOGE & maybe even LTC (merged mining) is potentially on the table for Qubic. We should not expect a public announcement of intent until they are much closer to gaining a majority share, as that is what they did with XMR Ofcourse, this playbook is not limited to Qubic, so we might end up seeing other chains follow their example by taking over other smaller PoW chains too! Solution: The majority of the XMR community is not going to like my solution: Proof of Stake The writing is on the wall: PoS is objectively more secure, more decentralized, more fair & more economically sound There is no good reason not to embrace this new technological reality: Evolve or die Conclusion: Out of all of the PoW chains, this could have happened too; XMR is the least deserving of being attacked XMR is a staunch community of cypherpunks & privacy advocates. Whose heart, for the most part, is definitely in the right place, as they are actively fighting for all of our freedoms, our right to privacy ❤️ That is why I hope they come out of this stronger; adopting PoS will most certainly achieve that. The greatest expression of anti-fragility is to accept radical change when under extreme pressure; As that is how diamonds are formed! 💎