Table of Contents:
Qubic's Impact on Monero: Technical Disruption and Market Repercussions
Recently, the public AI chain Qubic reorganized Monero blocks within a short period, driven by its "Useful Proof of Work (uPoW)" mechanism, resulting in 60 orphaned blocks. While it remains debated whether this constitutes a pure 51% attack, the event's impact extended beyond technical concerns, prompting exchanges to implement risk control measures and putting downward pressure on Monero's price. The incident exposed how security budgets under the PoW mechanism can be breached by external incentives, highlighting vulnerabilities in hash rate concentration and security boundaries.
Qubic's uPoW model breaks traditional PoW limitations by rewarding miners not only for QUBIC block production but also by redirecting hash rate to Monero mining, exchanging those rewards for USDT to buy back and burn QUBIC tokens. This results in a higher overall yield for miners compared to mining XMR alone. According to Qubic's official disclosures, this mining mechanism is over 50% more profitable than mining XMR and Tari alone. This allowed Qubic to quickly mobilize significant hash rate, leading to six block reorganizations and nearly 60 orphaned blocks. Qubic began mining Monero and Tari as early as June, exchanging rewards for USDT to buy back and burn QUBIC tokens.
Get $500 free Bitcoin mining for a free testing phase:
- Real daily rewards
- 1 full month of testing
- No strings attached
If you choose to buy after testing, you can keep your mining rewards and receive up to 20% bonus on top.
| Monero Security Budget | ~$110,367 per day |
|---|---|
| Block Reward | 0.6 XMR per block |
| Blocks per Day | ~720 |
However, the credibility of Qubic's "51% attack" claim is questionable. Public data from RIAT shows Qubic's peak hash rate at about 2.6 GH/s, while Monero's network-wide hash rate during the same period was around 6.25 GH/s—meaning Qubic controlled less than 42%, far from the 51% threshold. CoinWarz data indicated Monero's network peaked at 6.77 GH/s on the incident day, and MiningPoolStats reported about 5.21 GH/s. Currently, Qubic mining pools account for about 2.16 GH/s, or 35.3% of the network's hash rate. These discrepancies suggest Qubic's control is unstable and lacks sustained dominance.
Despite the questionable control, Qubic's hash rate disruption had a short-term market impact. Kraken suspended XMR deposits due to network integrity risks, later raising the confirmation threshold to 720 blocks and reserving the right to suspend again. This demonstrates that even the possibility of computational manipulation can pressure transaction security and undermine liquidity and trust.
- Qubic's uPoW model offers miners over 50% higher profitability than XMR or Tari mining alone.
- Qubic's actual hash rate control was below 42%, not reaching the 51% attack threshold.
- Market confidence and liquidity were affected, with exchanges like Kraken taking precautionary measures.
"The uncertainty over network integrity forced exchanges to take risk control measures, putting Monero's price under pressure." (Source: OKX)
Key Takeaway: Qubic's actions revealed the vulnerability of PoW networks to external incentives, even without achieving a full 51% attack, and highlighted the importance of hash rate stability for network security. (Source: OKX)
Dogecoin as the Next Potential Target: Community Votes and Technical Barriers
Following the Monero incident, Qubic's community listed Dogecoin, with a market capitalization exceeding $35 billion, as the next potential target. A recent community vote saw Dogecoin receive over 300 votes, far surpassing other candidates like Kaspa and Zcash. This shift in focus from a privacy coin to a mainstream meme coin with a larger user base has intensified market concerns and sparked discussions about the relationship between incentive-driven hash rate distribution and network integrity.
Qubic's approach is not traditional hacking but rather leveraging financial incentives to "rent" hash rate, challenging the security assumptions of PoW. The community, however, frames this as "mining" Dogecoin rather than an "attack," interpreting the event more as a marketing move than a technical threat.
| Dogecoin Network Hash Rate | ~2.69 PH/s (current), 7.68 PH/s (all-time high) |
|---|---|
| Block Reward | 10,000 DOGE per block |
| Blocks per Day | ~1,440 |
| Daily Security Budget | ~$3 million |
| Current DOGE Price | ~$0.21 |
Compared to Monero's daily security budget of about $110,000, Dogecoin's is significantly higher at around $3 million. This means that, under similar conditions, a 51% attack on Dogecoin would require much greater capital and technical resources. Qubic's strategy is to attract temporary hash rate migration through subsidies rather than direct massive investment. If enough miners are incentivized to switch to Dogecoin, it could still impact block stability, increasing block latency and orphan rates, even if double-spending is not achieved. The mere disruption could be enough to undermine market confidence.
- Dogecoin's security budget is nearly 30 times higher than Monero's.
- Qubic's model relies on incentivizing miners to switch chains temporarily.
- Potential risks include increased block latency and orphan rates, affecting network stability.
Key Takeaway: While a full 51% attack on Dogecoin is unlikely due to its high security budget, Qubic's incentive-driven model could still disrupt network operations and market confidence. (Source: OKX)
Broader Implications: The Changing Nature of PoW Security in the AI Era
The Qubic incident has exposed a new reality: hash rate is no longer tied to a single chain but is a liquid resource that can be quickly transferred, rented, or speculated upon. This liquidity transforms the relationship between miners and networks, shifting miners from long-term network guardians to hash rate arbitrageurs. As a result, PoW network security now depends more on hash rate stability than sheer size, with attack costs fluctuating alongside external market dynamics.
In the context of rising demand for AI computing power, PoW network security is being redefined. Traditionally, hash rate circulated only within the chain, with the security budget determined by block rewards and fees. Qubic's model demonstrates that hash rate can be channeled off-chain, with miners naturally gravitating toward the highest returns. This ties PoW security budgets to the global hash rate market, exposing them to potential "security flash crashes" if AI hash rate prices surge.
- Hash rate liquidity undermines the traditional security assumptions of PoW networks.
- Miners are increasingly motivated by short-term arbitrage opportunities rather than long-term network loyalty.
- PoW may become only a transitional solution for public AI chains, with future projects likely to adopt PoS or hybrid consensus mechanisms.
- External security binding, such as leasing markets or re-staking mechanisms, could provide more stable security budgets for public AI chains.
"The security of PoW networks will no longer depend on the scale of hash rate itself, but on the stability of hash rate." (Source: OKX)
Key Takeaway: The Qubic event signals a paradigm shift in PoW security, emphasizing the need for new models that address hash rate liquidity and external market dynamics, especially as AI computing demand grows. (Source: OKX)
Sources:
