Monero showing unusual signs – pointing to a potential attack? Monero (XMR) has been quietly causing the network miners to nervously watch the network and watch an unusual phenomenon unfold before their eyes. While the rest of the cryptocurrency industry is ogling at the delayed Ethereum launch, XMR miners are wondering how, and why, the price of XMR is decreasing while hashrate continues to climb up.
XMR, once a very profitable privacy coin to mine, has suffered during the crypto-winter that started at the end of 2017. XMR, to its benefit however, is a very anti-ASIC project. In 2018, XMR forked twice, once in April and again in October, to resist and combat the rise of ASIC miners having too much control of the network. The forks resulted in 5 splits of the XMR chain, all promising X Y and Z, but in the end, the main XMR network prevailed.
Monero, currently sitting just under $43 dollars per token, is a far cry from its all-time high of $720. As it currently stands right now, XMR is not profitable to mine, posting a net loss of around $.50 a day at an undervolted setting. The other PoW coin that is grabbing attention, Ethereum, is still profitable to mine right now at around $2/day. While XMR is not profitable to mine, you would expect hash power for XMR to go down as well. Other coins, such as Grin and BEAM, which are Mimblewimble coins, are seeing profitability levels that the industry has not seen in a very long time.
So begs the question – why is hashpower increasing for Monero, and where is it coming from? We know large enterprise GPU-mining operations have switched over to Mimblewimble coins and or mining Ethereum. Monero is resulting in a net loss – so why is the hashrate rising instead of falling?
There are three possibilities
- A large corporation is pushing up the cost and power necessary to mine XMR to push out small-to-mid GPU miners. This would be the start of a large corporation to accumulate enough hash-power to initiate a 51% attack.
- An entity has developed an ASIC miner with the efficiency and power necessary to bypass Cryptonight V8’s algorithm. This would be the time that the ASIC entity could be using to mine as many XMR as possible.
- Botnets have successfully upgraded to Cryptonight V8. A Botnet is a host of computers infected by hackers that can take control of your computer. Botnets were an enormous issue for Cryptonight V7 – up to half a million servers were infiltrated to mine XMR. With Cryptonight V8, it rendered all of the infected computers useless for XMR mining. With Botnets, cost is irrelevant – they’re not the ones paying for the electricity.
What’s happening to XMR currently does not make sense. It is unprofitable to mine XMR, yet mining for XMR continues to grow. Economically speaking, this is a pure loss – something is happening that we don’t know about. We’re monitoring updates on this Reddit thread as they happen – what do you think is happening? Let us know on our Facebook page!
