Cyber Capital Founder: Monero's "51% Attack Incident" Signals the Decline of Bitcoin's PoW
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Cyber Capital Founder: Monero's "51% Attack Incident" Signals the Decline of Bitcoin's PoW
A $300 million market cap PoS chain could "take over" a $6 billion market cap PoW chain.
Navigating Web3 tides with focused insightsAuthor: Justin Bons, Founder of Cyber Capital
Translation: Chopper, Foresight News
Qubic could have altered Monero's (XMR) transaction history and executed a double-spend attack. It turns out that a $300 million PoS (Proof-of-Stake) chain can "take over" a $6 billion PoW (Proof-of-Work) chain—PoS superiority is this evident.
Such attacks will continue, signaling Bitcoin's decline. PoW has reached a dead end.
Full Event Timeline
It all began in May, when Qubit validators, seeking optimized returns, used idle computing resources to mine XMR on the side, already capturing 2% of XMR’s hash rate. The strategy proved effective. By June, Qubic formally decided to fully integrate XMR to fund its ecosystem, rapidly expanding its mining pool to 10% of XMR’s hash rate. Subsequently, Qubic began offering additional token incentives to its mining pool, attracting more existing XMR miners because the rewards from Qubic were triple those of standard XMR pools.
Only after all this was completed did Qubic publicly announce its intention to "take over" the XMR network!
According to Qubic, by late July, their hash rate approached an absolute majority, reaching 38% of XMR’s hash rate. Qubic labeled this move a "demonstration of strength" rather than a malicious attack, calling it a "technical demonstration" for decentralized AGI computing...
Starting August 5, DDoS attacks against Qubic emerged, slowing the accumulation of their hash rate—but the counterattack was insufficient. On August 11, a "selfish mining" attack began. By August 12, the Qubic mining pool had achieved an "absolute majority" of XMR’s hash rate through this method.
To prove control over the network, they claimed to have completed a reorganization of six blocks, orphaning over 60 blocks in the process. Some researchers questioned this claim, but it is clear that within a 100-block window, they obtained an absolute majority of the hash rate. This would allow Qubic to alter XMR’s history, destroying the immutability, censorship resistance, and trustworthiness that XMR should have maintained during that period.
This also enables double-spending attacks, potentially defrauding individuals, protocols, and institutions of substantial funds. This is precisely why most major exchanges suspended XMR deposits and withdrawals: if Qubic chose to exploit this vulnerability, exchanges would be at risk of fraud. The mere fact that such an attack *could* have been carried out during this time is bad enough.
As of today, XMR’s price has dropped significantly, and its hash rate has declined by over 30%... confirming the vicious cycle that occurs when PoW systems collapse.
Qubic has portrayed itself as an "ally" of XMR, claiming it only wanted to "make a point" and has no intention of attacking XMR again... but the very ability to "make this point" is already devastating.
Lessons Learned
A $300 million PoS chain, using only token incentives, was sufficient to take over a $6 billion PoW chain. This fact speaks louder than words—it demonstrates the inherent weaknesses of PoW and offers a unique forward-looking perspective on Bitcoin’s future.
Funding a 51% attack on a large PoW chain via the token economics of a small PoS chain is something I never considered possible. The incentive of "free marketing" alone might be enough to justify such an operation; otherwise, I likely wouldn’t have paid attention to Qubic at all, yet now it has gained massive visibility.
All PoW chains are vulnerable to such attacks due to their security budgets being extremely low compared to PoS chains.
The introduction of political narratives undoubtedly complicates matters further—some may view attackers as allies, further weakening defensive efforts...
Notably, XMR’s security ratio (market cap divided by security budget) is actually slightly better than BTC’s:
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XMR: $55 million (block reward) × 0.51 (attack threshold) = $28 million (security budget) ÷ $6 billion (market cap) = 0.5% (annual security ratio)
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BTC: $19 billion × 0.51 = $9.7 billion ÷ $2.2 trillion = 0.4%!
For reference, here are the security budget calculations for three major PoS chains:
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ETH: (542B + 9.7B + 33.3B) × 0.29 × 0.33 = $52.2B (10%)
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SOL: (101B + 1.15B + 5.26B) × 0.68 × 0.33 = $24.1B (23%)
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ADA: (29B + 0.1B + 0.7B) × 0.60 × 0.51 = $9.1B (31.3%)
The security advantage of PoS is staggering: ETH, for example, has only 1/4 of BTC’s market cap but five times the security budget—and lower inflation.
Another interesting finding is that XMR actually has tail emission... suggesting that even if BTC introduces tail emission during a future crisis, it may still not be enough on its own to resist sustained "51% attacks."
All of this intensifies conflicts of interest, factional splits, and incentive misalignments when PoW chains face "51% attacks." We can at least conclude that if BTC were to face such a situation, the outcome would be far messier and more chaotic than anticipated.
Even Worse Outcomes
Strictly speaking, this wasn’t a "51% attack"—Qubic’s hash rate was below 51%, estimated between 28% and 38% depending on sources—and since no theft or censorship occurred, it doesn't fully meet the definition of an "attack," resembling more of a "demonstration."
The claim about "six-block reorganization" is disputed; some researchers reported not observing it on their nodes, and regular blockchain explorers cannot verify such data. Since the Cyber Capital research team was not running a Monero node at the time, I refrain from commenting until contradictions are clarified.
However, it is acknowledged even by Qubic’s critics that Qubic achieved over 51% block production rights within a 100-block window via "selfish mining." In my view, this is bad enough—it constitutes another form of attack: possessing control without exercising it does not negate the existence of control...
Therefore, I do not intend to downplay the severity of the event by debating overly fine technical details—this only helps us evade reality.
Who’s Next?
The Qubic community has voted to target Dogecoin next! This strategy also applies to ASIC-mined chains, as Qubic acquired the majority of its hash rate by incentivizing existing miners with tokens.
This means Qubic could attack DOGE, or even LTC (via merged mining). They likely won’t announce their intentions in advance, instead waiting until they near an absolute majority of hash rate before revealing their plans—just as they did with XMR.
Of course, this strategy isn’t exclusive to Qubic—other chains may imitate it in the future to attack other small PoW chains.
Solutions
Most members of the XMR community may not accept my solution: transitioning to PoS. The conclusion is already obvious—PoS is objectively superior in terms of security, decentralization, fairness, and economic rationality. There is no reason to reject this new technological reality: evolve or die.
Conclusion
Among all PoW chains, XMR was perhaps the last one that should have suffered such an attack. The XMR community consists of committed cypherpunks and privacy advocates, whose original intentions are largely commendable—they fight for our collective freedom, especially privacy rights.
I hope they can recover from this and grow stronger by transitioning to PoS. Embracing radical transformation under extreme pressure is the essence of antifragility: like diamonds, forged under immense pressure.
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