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Is Monero vulnerable to 51% attacks?
Monero, a privacy coin that was once led by Riccardo Spagni (Guest of the Magical Crypto Friends program Fluffy Pony), currently shows that the computing power of some of its mining pools is at a high level. In the past, Monero developers have implemented a hard fork of the network to prevent the proliferation of viable application-specific integrated circuit (ASIC) miners, but this has not prevented the formation of large mining pools.
ASIC miners are much more efficient than traditional GPU miners because their microchips are specifically designed for specific hash algorithms. Consumer hardware is designed as a general-purpose computing device that can do many things, but is not specifically designed for any particular task.
As with all cryptocurrencies, Monero's current mining centralization problem is more subtle than it seems. Although the two mining pools control most of the computing power, individual miners in these two mining pools can switch to other mining pools at any time.
They can decide to reallocate their processing power by joining smaller mining pools, but they may have less incentive to do so.
Bitcoin also faces a similar problem of over-centralization of mining pools, especially with most of its computing power concentrated in China. But in the past, miners have taken action to keep the network decentralized by switching to smaller mining pools.
The two mining pools that currently control 60% of the network's computing power can theoretically act as attackers, launching a 51% attack on the Monero network. Through a 51% attack, they will be able to manipulate the blockchain ledger, block certain transactions, and even have the power to initiate a double spend. However, individual miners will definitely switch mining pools to protect their investments in mining machines and XMR tokens.
Centralization becomes more complicated
As mentioned above, Monero developers have realized the industrialization of mining through ASIC mining machines, and they have repeatedly tried to prevent the use of ASIC mining machines by switching the hash algorithm.
This has led to a more subtle understanding of mining centralization. Simply put, hardware centralization is different from mining pool centralization. Mining centralization means that certain factions have hardware that is much more efficient than GPU miners, so normal operators cannot compete with it at all. This gives ASIC miners an unfair advantage over other miners in discovering new blocks and earning returns.
Pool centralization means that most miners join leading mining pools in order to improve returns. The larger the mining pool, the greater the corresponding computing power, which means that they are more likely to find new blocks. As a result, these few selected mining pools eventually gained most of the computing power. It is worth noting that, in theory, ASIC miners can still mine in large mining pools.
The smaller the mining pool, the less rewards you get, because the smaller mining pool has fewer blocks due to its lower computing power. If a large mining pool becomes a bad participant, miners may be motivated to leave this large mining pool and mine in a small mining pool to protect the integrity of the network.
Therefore, although this is a problem worthy of attention, the problem of Monero's mining centralization is multifaceted and may not be as serious as it seems.