Coinbase, a prominent cryptocurrency exchange, has enacted safety measures in response to a single mining pool gaining control of a substantial 53.8% of the hash rate within the proof-of-work blockchain underpinning the privacy-focused cryptocurrency Zcash.
In an effort to mitigate the risk of double spending, which arises when a single entity holds at least 51% of the hash rate in a proof-of-work blockchain, Coinbase has revised its deposit confirmation procedures. The exchange will now require 110 block confirmations before validating a deposit of ZEC (Zcash). This adjustment extends the deposit time from approximately 40 minutes to approximately 2.5 hours.
Additionally, Coinbase has transitioned its Zcash trading pairs into “limit only” mode, preventing traders from placing market bids. This step is designed to minimize the potential impact of any market volatility, especially in the event of significant sell-offs that could occur as part of a double-spending attack.
Expressing its concerns about mining centralization and the associated risks, Coinbase has initiated discussions with the Electric Coin Company, the entity behind Zcash, as well as the relevant mining pool, ViaBTC. Coinbase shared recommendations aimed at reducing the likelihood of a 51% attack, emphasizing the importance of safeguarding the integrity of the blockchain.
The Electric Coin Company confirmed the ongoing discussions and revealed a proposal known as the “Trailing Finality Layer,” which could potentially address the issue. This proposal represents a significant step toward transitioning Zcash from its current proof-of-work consensus mechanism to a more secure proof-of-stake system, aligning with the broader industry trend toward increased blockchain security and decentralization.