A report released by the Coinbase security team has revealed that the hash rate distribution for the cryptocurrency Zcash (ZEC) is heavily imbalanced, with a single mining pool, ViaBTC, controlling over 51% of the hash power. As a result, Coinbase has undertaken measures to protect users from potential risks, such as a 51% attack.
These measures include increasing the Zcash transaction confirmation threshold to 110 blocks, meaning deposits now take 2.5 hours rather than 40 minutes. Coinbase has also put the Zcash markets in a ‘limit-only’ state and has been engaging with ViaBTC and Electric Coin Company, the Zcash developer group, to try and achieve a more decentralised mining distribution.
A 51% attack in proof-of-work blockchains can occur when more than 50% of the network’s hash rate is controlled by a single entity, which can then double-spend transactions or block legitimate ones, resulting in loss of funds. Such attacks have already been seen on Ethereum Classic, Bitcoin SV, Bitcoin Gold, Verge and Vertcoin.
In order to help prevent this kind of attack, Electric Coin Company is working on moving Zcash to a proof-of-stake consensus mechanism, a feat that Ethereum achieved with its Merge milestone in September 2022. ECC also has a dedicated full-time team working on research and development for proof-of-stake.
