Implications of Qubic’s uPoW Model on Monero Network Security

The Qubic mining pool, led by IOTA co-founder Sergey Ivancheglo, executed a 51% attack on the Monero network, achieving control over more than half of its hashrate by August 11, 2025.

This was framed as an “economic demonstration” to showcase Qubic’s “useful proof-of-work” (uPoW) model, which incentivizes Monero mining to fund Qubic’s token economy. By offering higher payouts (up to $3.13/day compared to $0.64/day from standard pools), Qubic attracted enough miners to surpass 51% hashrate, peaking at 52.36% or higher, enabling potential blockchain reorganization, transaction censorship, or double-spending.

A six-block reorganization was reported, discarding 60 blocks, though some developers, like SeraiDEX’s Luke Parker, argued this could be due to luck rather than a definitive attack. The attack faced resistance, including an alleged DDoS attack on Qubic’s pool in late July, reducing its hashrate from 2.6 GH/s to 0.8 GH/s.

Monero’s community countered with miner boycotts, slashing Qubic’s share to under 15% at times. The attack’s cost was estimated at $75 million daily, raising questions about its economic viability. Monero’s price dropped 8-17% amid the turmoil, while Qubic’s token rose 4%.

Despite Qubic’s claim of not intending harm, the event exposed vulnerabilities in Monero’s proof-of-work model, sparking debates on mining centralization and network security. Qubic’s rapid accumulation of hashrate (from 2% to over 40% in two months, peaking at 52.36%) demonstrates how a single entity can centralize a supposedly decentralized network.

This contradicts Monero’s core value of privacy through decentralization, as a 51% hashrate allows control over transaction validation, block production, and potentially protocol changes. A centralized hashrate enables attack vectors like: The attacker can rewrite the blockchain to spend the same coins multiple times.

The attacker can reject or delay specific transactions, undermining Monero’s privacy guarantees. Non-Qubic miners’ blocks can be rejected, reducing their rewards and further incentivizing migration to Qubic’s pool. Qubic’s uPoW, which repurposes mining for tasks like Monero mining or AI training, frames the attack as an “economic demo” to highlight PoW vulnerabilities.

By achieving a 51% hashrate, Qubic proved that PoW networks are susceptible to entities with superior economic resources, challenging the assumption that strong cryptography alone ensures security. This exposes PoW networks to “soft” attacks driven by economic incentives rather than technical exploits.

Unlike traditional hacks, these attacks are harder to detect and counter, as they exploit miner greed rather than software flaws. The Monero community’s response (e.g., boycotts and pool migrations) shows resistance is possible but requires significant coordination, which may not always succeed.

The attack caused Monero’s price to drop 8-17%, reflecting market concerns over network stability. A successful 51% attack could erode trust in Monero’s privacy and security, potentially driving users and miners away permanently. Conversely, Qubic’s token rose 4-70% during the period, suggesting market approval of its model.

The Qubic-Monero conflict serves as a warning for all PoW blockchains (e.g., Bitcoin, Ethereum Classic). If economic incentives can override decentralization, other networks may face similar threats from entities with significant capital. This incident has reignited debates about PoW’s long-term viability compared to proof-of-stake systems.

The uPoW model highlights a systemic attack vector in PoW: the ability to redirect hashrate for profit-driven motives. This could inspire copycat attacks on smaller or less secure PoW networks, as seen in past cases like Ethereum Classic (2019-2020) or Bitcoin Gold (2018-2020).

How uPoW Exposes Monero to Attack Vectors

Qubic’s uPoW model, which uses mining resources for practical tasks (e.g., Monero mining, AI training) while rewarding miners with QUBIC tokens, creates unique attack vectors by blending economic incentives with computational efficiency.

uPoW incentivizes miners by offering higher profits through QUBIC token rewards and Monero mining proceeds, which are converted to USDT to buy and burn QUBIC tokens. This deflationary loop makes Qubic’s pool more attractive, drawing miners away from Monero’s ecosystem.

The rapid hashrate accumulation (from 2% to over 50% in months) shows how uPoW can centralize a network by luring miners with better economics. This creates a 51% attack risk without requiring Qubic to own the hardware, as miners “voluntarily surrender” hashrate for profit.

Qubic’s plan to stop reporting hashrate after August 2, 2025, makes it harder for Monero to monitor threats. This “stealth mode” obscures Qubic’s true influence, delaying community responses. Reduced transparency increases the risk of undetected attacks, as Monero cannot easily track Qubic’s hashrate share.

uPoW’s high hashrate enabled a reported six-block reorganization, discarding 60 blocks, which demonstrates the ability to rewrite Monero’s blockchain history. While some argue this could be due to luck, the potential for deliberate reorgs remains. Reorgs enable double-spending and block orphaning, directly threatening Monero’s integrity.

uPoW’s ability to concentrate hashrate makes such attacks feasible, especially if Qubic rejects non-Qubic blocks to centralize rewards. uPoW’s integration with real-world tasks (e.g., AI training, Monero mining) makes it economically sustainable to maintain high hashrate shares.

Qubic’s pool faced an alleged DDoS attack, reducing its hashrate from 2.6 GH/s to 0.8 GH/s, which it attributed to Monero’s community. This highlights how uPoW’s centralized pool structure can be a target for counterattacks, but also how Monero’s decentralized nature struggles to coordinate defenses.

While uPoW exposes Monero to hashrate-based attacks, it also makes Qubic’s infrastructure a single point of failure. However, Monero’s reliance on community-driven defenses (e.g., boycotts, pool migrations) is slow and less effective against well-funded, coordinated attacks.

Qubic’s uPoW model exposes Monero to attack vectors by leveraging economic incentives to centralize hashrate, enabling 51% attacks, reorgs, and transaction censorship at a low cost. The implications include weakened decentralization, eroded trust, and price volatility, with broader concerns for all PoW networks.