Coinbase Takes Action to Address Zcash Network Security Concerns
Coinbase’s Blockchain Security Team has discovered a concerning shift in the distribution of hash power within the Zcash network. A single mining pool, ViaBTC, now controls more than 51% of the network’s computational power, raising potential security vulnerabilities.
The Risks of Centralization in Proof-of-Work Blockchains
In Proof-of-Work (PoW) blockchain networks, miners compete to validate transactions by solving complex mathematical problems. However, if one miner or mining pool gains over 51% of the network’s hash power, it can introduce risks such as executing double-spend attacks or censoring transactions. This centralization poses a threat to user and exchange funds.
Steps Taken by Coinbase
Committed to security, decentralization, and compliance, Coinbase has implemented several measures in response to these concerns:
Increased Confirmation Requirement
To reduce the risk of double-spending or fraudulent transactions, Coinbase has raised the Zcash confirmation requirement to 110 blocks. This change extends the deposit time from around 40 minutes to approximately 2.5 hours.
Limit-Only Trading Mode
In order to minimize potential volatility, Coinbase has transitioned its Zcash trading markets into a limit-only state.
Engagement with Stakeholders
Coinbase has initiated discussions with the Electric Coin Company and ViaBTC to address the risks associated with mining centralization. The focus of these dialogues is on implementing strategies that can mitigate the risk of a 51% attack.
Thorough Security Assessments
Coinbase’s Blockchain Security Team conducts extensive security assessments before listing any blockchain on its exchange. One crucial criterion is ensuring that no single entity has centralized control over the network. The team also continuously monitors existing blockchain networks for significant changes that may affect their security evaluations. Specialized hash power heuristics are employed to detect notable shifts in mining power for PoW networks.
Looking Towards a Decentralized Future
Coinbase remains hopeful for a decentralized Zcash mining future. While the current measures are believed to be sufficient in protecting users, the company emphasizes its ongoing collaboration with external partners to ensure the security of all participants in the cryptoeconomy. Coinbase commits to continuously monitoring the situation and adjusting risk mitigations as necessary to safeguard its customers.
Hot Take: Coinbase Takes Action to Safeguard Zcash Network Amidst Security Concerns
Coinbase has responded swiftly to address security concerns arising from the concentration of hash power within the Zcash network. By implementing increased confirmation requirements, transitioning trading markets into a limit-only state, and engaging with stakeholders, Coinbase demonstrates its commitment to user protection and network decentralization. The company’s thorough security assessments and continuous monitoring further reinforce its dedication to maintaining a secure cryptoeconomy. With ongoing collaboration and vigilance, Coinbase aims to ensure the safety of all participants while fostering a decentralized future for Zcash mining.
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