Concerns Mount as Single Mining Pool Gains Dominance in Zcash Network

Concerns Mount as Single Mining Pool Gains Dominance in Zcash Network 

In a concerning turn of events, recent data reveals that a single mining pool has gained dominance over more than 53% of the Zcash cryptocurrency network's hashrate. On September 19, 2023, the crypto mining pool Viabtc's hashrate reached a staggering 53.69% of the total, clocking in at 4.2 GSol/s out of the network's 7.84 GSol/s. This dominance raises questions about the decentralization and security of Zcash, as Electric Coin Co. acknowledges a "lack of finality" in the network.

Zcash Hashrate Predicament: Viabtc Dominates with Over 53% Control

The Zcash community and industry players are growing increasingly alarmed by the fact that Viabtc controls 51% of the network’s hashrate. On September 19, 2023, Viabtc's hashrate reached a staggering 53.69% of the total, clocking in at 4.2 GSol/s out of the network's 7.84 GSol/s. The situation garnered attention after crypto exchange Coinbase issued a "Security PSA" titled "Observed risks in Zcash mining pool distribution."

Coinbase, in response to the concerning developments, took proactive measures to protect customer assets. These measures included shifting Zcash markets to a "limit-only state" and increasing the Zcash confirmation requirement to 110 blocks, significantly extending deposit times to enhance security. Coinbase stated:

"Coinbase increased the Zcash confirmation requirement to 110 blocks to reduce the risk of double-spending or fraudulent transactions. This increases deposit time from ~40 minutes to ~2.5 hours."

Electric Coin Co. (ECC) has also stepped into the fray after the blog post release, addressing the issue on social platform X. “ECC is aware of this issue, and we’ve had conversations with Coinbase, Viabtc, Zcash’s security lead, and Zcash Community Grants,” ECC stated. The ECC team highlighted the decentralized nature of Zcash and explained that “Zcash is a decentralized, open-source network with no ‘lead developer,’ no ‘issuer,’ and no organization that controls it.”

ECC Addresses Hashrate Issue, Proposes Solutions for Zcash

ECC highlighted the decentralized nature of Zcash, emphasizing that there is no central authority that controls the network. The core issue, as ECC pointed out, lies in the lack of finality, a challenge that affects all proof-of-work blockchains. To resolve the problem, ECC proposed its Trailing Finality Layer (TFL) as a solution to provide finality for Zcash. They also suggested a potential shift to a proof-of-stake (PoS) model, listing it as one of their "top four priorities."

ECC expressed that activating the TFL hybrid-PoW-PoS approach could bring finality to the Zcash network sooner than a complete transition to proof-of-stake. The next step in ECC's PoS research and development is to create a prototype of TFL to assess its performance.

The Zcash community is now left with crucial decisions to make regarding the network's hashrate distribution and the proposed solutions. 

What is your take on the state of Zcash’s network hashrate and the offset mining pool distribution? Please share your thoughts and opinions in the comments section below.