The cryptocurrency network Zcash is confronting a challenge of dominance as over half of its network hashrate is now controlled by a single mining pool, Viabtc. As of Tuesday, Viabtc held 53.69% of the total hashrate, equivalent to 4.2 giga solutions per second (GSol/s) out of Zcash's overall 7.84 GSol/s.
This development has triggered intense discussions within the cryptocurrency community and raised security concerns. Just days prior to this observation, Coinbase (NASDAQ:COIN), a cryptocurrency exchange, had issued a security public service announcement (PSA) titled "Observed risks in Zcash mining pool distribution." In response to the identified potential risks, Coinbase implemented protective measures including shifting its Zcash markets to a "limit-only state" and extending the Zcash confirmation requirement to 110 blocks. This move increased the deposit time from around 40 minutes to approximately 2.5 hours.
Electric Coin Co. (ECC), the entity overseeing the Zcash project's codebase, has acknowledged this issue and identified the root cause as a lack of finality, a problem impacting all proof-of-work blockchains. To address this concern, ECC proposed a solution called the Trailing Finality Layer (TFL). This proposal aims to provide finality for Zcash and is currently under consideration as a potential fix.
ECC also underscored the potential advantages of transitioning Zcash to a proof-of-stake (PoS) system, marking it as one of their top priorities. They suggested that if the community decides to activate the TFL hybrid-PoW-PoS approach, it could enable finality on the Zcash network sooner than an outright shift to proof-of-stake. As part of their PoS research and development efforts, ECC's next step is to build a TFL prototype to assess its performance.
In their response to the issue, ECC has engaged with various parties including Coinbase, Viabtc, Zcash's security lead, and Zcash Community Grants. They have stressed that Zcash operates as a decentralized, open-source network with no controlling organization or lead developer.
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