Single Entity Reportedly Controlling 51% of Dash Cryptocurrency's Hashrate

  • Dash (DASH), one of the largest cryptocurrency networks, appears to be a potential target of a 51% attack.
  • Relatively large digital currency platforms such as Ethereum Classic (ETC) are still vulnerable to 51% attacks.

Dash (DASH), an open-source digital currency platform and a form of decentralized autonomous organization (DAO), has recorded about 1,900 Terahashes per second (at the time of writing). Significantly, NiceHash (a Slovenia-based cryptocurrency cloud mining marketplace for hashing power) has been responsible for over 1,000 TH/s across more than 25,000 miners.

Single Wallet Controlling Most Of Network

Notably, three of the top four DASH addresses over the last couple thousand of blocks mined on the Dash blockchain are controlled by a single entity, according to an analysis conducted by a Reddit user. The redditor wrote:

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 6 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.

According to the reddit user’s (/taipalag) research, the following addresses are being controlled by a single entity:

XbUutDsgJbf7Sjjq4omhusNtkT8ih1d7oQ

XkNPrBSJtrHZUvUqb3JF4g5rMB3uzaJfEL

XeMPcKeVDN9bkECGDC7ggtf9QsX5thgKAx

In total, these DASH addresses have mined over 26,665 Dash, an amount currently valued at $2.126 million according to CryptoCompare data.

Serious Threat To Blockchain Security

51% attacks pose a serious threat to the security of blockchain networks, especially for cryptocurrencies that have smaller networks.

Many analysts argue that digital asset platforms should be ASIC-resistant, meaning that miners must not be able to mine cryptocurrencies using specialized high-end hardware equipment. In addition to allowing all miners an equal opportunity to mine digital currencies, an ASIC-resistant network may be more secure.

Hashpower renting services such as Nicehash may also be a threat to a cryptocurrency platform’s security because someone could rent enough hashpower to launch 51% attacks on the Dash blockchain and other networks.

Protecting Dash Network Using "Chainlocks"

In order to protect the Dash platform from 51% attacks, the cryptocurrency’s developers are working on something referred to as “Chainlocks.” The Dash Improvement Proposal 8 explains:

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. 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 a chain reorganization.

Bypassing Dash's X11 Algorithm

The above proposal aims to address issues related to both block reorganization attempts from 51% attacks and offers suggestions on how to improve the “longest-chain” rules which Dash has borrowed from the Bitcoin (BTC) protocol.

Clearly, an unknown entity has invested a lot of  money into mining Dash with powerful ASICs. Dash’s X11 algorithm had been designed to block or prevent ASICs from being used to mine its native digital currency. 

However, ASIC developers have been able to add more memory to their miners, which allows them to bypass restrictions imposed on mining by the X11 algorithm. 

As CryptoGlobe reported recently, the Ethereum Classic (ETC) network has been exploited via a 51% attack, which allowed the hacker(s) to engage in double spending.

Token Listing Guidelines for Binance DEX

On Thursday (April 25), Binance unveiled guidelines for listing tokens on Binance DEX, its new decentralized exchange, and said that these guidelines would enable Binance DEX "to facilitate a larger number of crowd-vetted projects, hopefully listing 10x more tokens than currently listed on Binance.com."

Despite what some people think, issuing a token on Binance Chain does not mean that the new token will automatically get listed on Binance DEX. Binance, which has been criticized like most other centralized exchanges for having an opaque listing process, is hoping that the new "transparent and community-driven" listing process for Binance DEX will finally satisfy most if not all of its detractors.

The Binance DEX listing process consists of the following steps:

  • 1. Proposal
    • "It is recommended that Token Issuers first create a thread under the “Token Issuance & Listings” category in the Binance Chain Community Forum."
    • "It is recommended that this public thread contain full answers to the Binance DEX Token Listing Submission Criteria..."
    • "Token Issuers must initiate an on-chain Proposal Request (fee of 10 BNB) to list a trading pair for a token."
    • "Token Issuers must request BNB as the quote asset for their first trading pair. For example, ABC/BNB."
    • "Once the proposal request is submitted, Token Issuers must post the Proposal ID to their proposal thread in the forum as a ‘reply’."
  • 2. Deposit
    • "Once the proposal request is sent, Token Issuers will need to deposit at least 1,000 BNB within 2 days."
    • "Proposals that do not receive sufficient deposits within this timeframe will not be able to move on to the voting stage and their deposit will not be refunded."
    • "If the Vote passes in Step 3 (majority 'Yes'), the 1,000 BNB deposit will be refunded."
  • 3. Vote
    • "At least half of the voting power is required to vote 'Yes' for the proposal to be accepted."
    • "Binance Chain Validators can vote for either 'Yes', 'No', 'NoWithVeto', or 'Abstain' within the time period specified in the proposal request."
    • "The 1,000 BNB deposit will be refunded if the majority of Validators vote for 'Abstain'."
    • "Proposals are denied if one third of the Validators vote 'NoWithVeto' or if half of the Validators vote 'No'."
    • "Denied proposals will lose all the funds deposited, however this result will only occur in rare circumstances when there is relatively clear fraud, scam or spam."
  • 4. List
    • "If the vote is passed, the Token Issuer will need to initiate a 'List' transaction on-chain (2,000 BNB fee) within the timeframe specified in the proposal, while the previous 1,000 BNB deposit will be refunded back to the proposing user."
    • "The trading pairs will be live immediately after this request is completed."

Binance DEX Listing Process Workflow Screenshot.png

Binance says that the "listing application, project information, vote results and all community interaction will be public on the Binance Chain Community Forum," that the decisions of the Binance Chain Validators (who are the only ones with the power to vote) are "purely based on public information in the forum," and that there is no other way "for projects to contact Binance Chain Validators."

One interesting thing to point out is that although the Binance DEX listing fee has been set to 2,000 BNB (currently, according to CryptoCompare, worth around $45,580), originally Binance CEO Changpeng Zhao (aka "CZ") was thinking of making the listing fee on Binance DEX be around $100,000, as he mentioned in his first Ask Me Anything (AMA) session on February 7:

"There will be a listing fee on the DEX. I actually deliberately want to set that a little bit high, just so we reduce the number of spam or scam projects. And there’s also a voting process by the validators to be listed on the DEX. So there’s a fee, I think the fee will be probably close to $100K US, so we’ll see. But the fee is adjustable over time, it’s quite easy to change."

Earlier today, Mithril, the first crypto project to migrate its token (MITH) to Binance Chain, got listed on Binance DEX:

 

All Images Courtesy of Binance