Privacy coin Zcash is facing a hash rate consolidation crisis.
ViaBTC, primarily known as a popular bitcoin mining pool, now controls over 51% of the hashing power on Zcash, according to MiningPoolStats.
The hashrate for Zcash, a proof-of-work network, is measured in giga solutions per second (Gsol/s) and ViaBTC is hashing at 4.53Gsol/s.
F2pool is the next contender, but doesn’t really come close to ViaBTC. Miners on f2pool have captured 1.62 Gsol/s, representing just over 18% of the hash rate.
Coinbase’s blockchain security team pointed out this consolidation of mining power on Sept. 15, and warned of possible risks to users transacting on Zcash.
“If a single miner or mining pool gains over 51% of the network’s hash power, it can introduce serious security vulnerabilities,” Coinbase wrote in a blog. “An entity could manipulate the blockchain in various ways — such as executing doublespend attacks or censoring transactions, potentially leading to a loss of user and exchange funds.”
Alurosu wrote a post on X, which was later reposted by Electric Coin Company (ECC) founder and chief executive Zooko Wilcox, appealing to anyone who knows Zcash miners who can possibly convince them to switch pools so as not to risk the integrity of the blockchain.
ECC, the team behind Zcash, addressed the situation on X, formerly Twitter, on Tuesday evening.
In the thread, ECC explained that it has had conversations with Coinbase about “the nuances of the Zcash network.”
One of those nuances, ECC wrote, is that the Zcash network has a lack of finality.
Finality, when talking about blockchains, simply refers to the point of no return when a transaction is immutably recorded on the distributed ledger.
ECC also linked to a mid-July blog post that discussed a trailing finality layer, which if implemented, would make Zcash “a hybrid” of proof-of-work and proof-of-stake.
Still, this supposed solution still needs to be agreed upon, so in the meantime Coinbase announced a few precautions it has taken with Zcash.
It has increased the confirmation requirement to 110 blocks, which will in turn increase the deposit time from about 40 minutes to around two and a half hours.
And for those wanting to buy Zcash on Coinbase, the asset is now in a limit-only state to reduce volatility.
Blockworks reached out to ECC and ViaBTC for commentary on the still unfolding situation with Zcash but didn’t receive immediate responses.
However, Wilcox did briefly address journalists and reporters reaching out to ECC, saying that “ECC is the wrong organization to talk to. Zcash is *actually* a decentralized open protocol.”
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