Coinbase has issued a warning to its users about the risk of mining pool centralization on the Zcash (ZEC) network.
According to Coinbase, the mining pool called ViaBTC alone has gained more than 51% of the network’s hashing power, which could pose a serious threat to the security and integrity of the blockchain.
Zcash is a privacy-focused cryptocurrency that uses proof-of-work (PoW) consensus mechanism to verify transactions and generate new coins. PoW requires miners to compete to solve complex mathematical problems using their computing power.
However, if a single miner or mining pool controls more than half of the network’s hashing power, they can potentially manipulate the blockchain in various ways, such as performing double-spending attacks or censoring transactions.
Coinbase Announces Precautions Against Danger in Zcash Mining Pool
Coinbase’s Blockchain Security team says it constantly monitors the hash power distribution of the PoW networks it supports and implements appropriate measures to protect its users from potential attacks. In response to the detection of ViaBTC’s dominance over Zcash’s hashrate, Coinbase took the following steps:
- Zcash confirmation requirement has been increased to 110 blocks, meaning users will have to wait approximately 2.5 hours for their deposits to be confirmed. This reduces the risk of double spending or fraudulent transactions.
- The exchange switched Zcash trades to limit-only mode; This means that users can only place limit orders, not market orders. This will reduce the impact of any surges caused by potential attacks.
- Coinbase has held talks with Electric Coin Company, the team behind Zcash, and mining pool operator ViaBTC to address concerns and offer recommendations to reduce the risk of a 51% attack. Coinbase has expressed hope for a more decentralized Zcash mining and said it supports both parties’ efforts to achieve that goal.
*This is not investment advice.