In response to ViaBTC, a single mining pool, gaining control of 53.8% of the hash rate on the proof-of-work blockchain that supports the privacy coin Zcash, Coinbase (NASDAQ:COIN), a prominent cryptocurrency exchange, has implemented measures aimed at mitigating potential risks. The move comes as an effort to prevent double spending and other potentially harmful actions that could arise from this dominant position.
On Wednesday, Coinbase increased the number of block confirmations required to confirm a ZEC deposit from 110, consequently extending the deposit time from about 40 minutes to approximately 2.5 hours. This action is intended to lower the risk of double spending, an issue that emerges when a digital currency is spent more than once.
In addition to this measure, Coinbase has transitioned its Zcash trading pairs into a "limit only" mode. This change implies that traders can no longer place market bids. The exchange believes this approach will help cushion any potential impact of volatility, particularly in case of large sales resulting from a double-spend attack.
Coinbase has also reached out to both the Electric Coin Company, the developer of Zcash, and ViaBTC, expressing its concerns over the situation. The exchange has suggested various options that either party could implement to lessen the likelihood of a 51% attack.
The Electric Coin Company has acknowledged these discussions and proposed introducing a feature known as the “Trailing Finality Layer” to the Zcash blockchain. This solution would represent a shift from proof of work to proof of stake for the blockchain.
ViaBTC currently holds 53.8% of the Zcash hash rate according to MiningPoolStats. This theoretically suggests that if ViaBTC chose to act maliciously, it could potentially execute double spending attacks or engage in other harmful activities.
However, it's crucial to note that this control isn't held by a single miner but by a mining pool. These pools consist of multiple miners pooling their resources together for more consistent earnings. If the mining pool were to participate in damaging activities, miners could decide to leave the pool for another, thereby reducing its influence over the network.
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