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Altcoin

Single Owner hold 51% Hashrate of Dash cryptocurrency

A worried Reddit user, Flenst, recently raised the alarm stating that the NicheHash crypto mining marketplace holds more than half of all the hash power on the Dash network. Dash has a collective hash power of 1,900 TH/s, and out if this more than 1000 TH/s is held by NicheHash which is distributed across 25,000 miners.

The post also stated that the same organization is managing the top three addresses among the last few thousand Dash blocks. The user quoted that “This particular transaction has three of the four top addresses as inputs meaning one entity controls all three. These three alone gather 53% and more. You can also see this started six months ago/around September last year, and I think the fourth unknown pool also belongs to this entity, yet it is separated on the blockchain. It started to gather a lot of hash at the same time.”

The three addresses mentioned were:

  • XbUutDsgJbf7Sjjq4omhusNtkT8ih1d7oQ
  • XkNPrBSJtrHZUvUqb3JF4g5rMB3uzaJfEL
  • XeMPcKeVDN9bkECGDC7ggtf9QsX5thgKAx

Further, these addresses put together have mined, around 26,665 Dash till the time of writing the article, which is equivalent to 573 BTC or $2.2 million at current prices. Such high centralization opens up high probabilities of security liabilities within the system. As per the opinion of the founder of Litecoin, Charlie Lee, the system becomes vulnerable to 51 percent attacks due to such high level of centralization which is threatening to the networks.

Further, the post said that “So it is possible someone could try to perform a 51% before DASH implements their chain locks. The actor could start right away. Anyone offering a service with DASH must keep an eye on the chain as long as this doesn’t change and be very careful.”

The user was referring to a recent announcement made by the Dash development team, where they confirmed about their ongoing activities on something known as “Chainlocks.” In November, Dash had stated that they would be introducing a new feature in order to overcome the issues related to 51 percent attacks. Further, Chainlocks are something which manages block reorganizations and can alter the “longest-chain” rules that Dash acquires from Bitcoin.

As per the Dash Improvement Proposal 8 “When a node encounters multiple valid chains, it sets the local “active” chain by selecting the one that has the most accumulated work. This is generally known as the “longest-chain” rule as in most cases it is equivalent to choosing the chain with the most blocks.”

It further stated “If both chains have the same amount of accumulated work (and in most cases the same block count), a decision can’t be made solely based on the longest-chain rule. […] If another block is then received which extends the non-active chain so that it has the most accumulated work, it becomes the active one. For example, even if a chain is currently 6 blocks longer than any other chain, it’s still possible that a shorter chain becomes longer and thus the active one. This is generally known as chain reorganization.”

From the available information, it certainly is clear that some unknown person has invested a gigantic amount into mining dash with ASICs. However, Dash’s X11 algorithm had once dissatisfied the process of ASIC development in the past, in the sense that ASIC developers observed that by including memory to the miners, they were able to tackle the X11 algorithm.

Apparently, such attacks are again in the news with regards to the issues around Ethereum Classic.

Vishal Parmar

Vishal had founded his first company at a tender age of just 19 years. He is also CEO of Technology Company. He has been into cryptocurrency space since 2015 when Bitcoin was around 400$. He is currently managing CryptoNewsZ Media team with full force.You can connect with Vishal on LinkedIn and Twitter & Facebook . You can also mail him at [email protected] to discuss anything related to his reports.
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