Zcash: Blockchain explodes – what does that mean?
The data size of the Zcash blockchain has been exploding for around three and a half months. In the meantime, this has increased by 300 percent. The privacy coin has existed since 2016 and is experiencing such an event for the first time. What is behind it and why is it a problem for the crypto project?
Zcash blockchain size tripled in three months
Zcash (ZEC) was launched on October 28, 2016. By the summer of this year, the blockchain of the privacy coin will have grown to around 30 gigabytes. In just a few months, the data size of the distributed ledger has tripled.
In the crypto scene, this development sometimes causes wild speculation. How does this sudden growth come about? Bitcoin developer Peter Todd suspects that a targeted attack is taking place that may exploit an inflation bug.
Accordingly, the attacker would create new Zcash through this activity. However, there is no evidence for this assumption. Barry Silbert also speaks out. He is the founder of the Digital Currency Group (DCG) , which includes asset manager Grayscale.
Silbert sees the strong growth of the ZEC blockchain as encouraging. The DCG is known as a Zcash investor. According to him, this proves that the use of cryptocurrency is increasing rapidly , but is that really the case?Continue reading after the ad
Zcash is the target of a spam attack
It is almost impossible that the organic use of Zcash will suddenly increase significantly. It is much more likely that the process is a spam attack.
According to this, the attacker allows the size of each block to grow to a maximum of two megabytes by performing a shielded transaction with hundreds of outputs . This is what the optional payments with increased privacy are called within Zcash. The more outputs, the better the privacy.
So far, there has been a fixed fee of 0.0001 ZEC per transaction on Zcash. The amount of data processed is irrelevant. This mechanism is unusual as the two metrics are usually linked to avoid spam attacks of this type.
The attacker is now using this peculiarity to let the blockchain grow immensely and is investing around ten US dollars a day.
Blockchains that are too large lead to problems
With the increase in the blockchain size from 30 to over a hundred gigabytes, the attacker has not yet achieved very much. However, if he keeps his spam attack active for more months or years, the blockchain could become too big.
The nodes of the network would then eventually reach their memory limit and could no longer operate for the network. This would jeopardize the decentralization or, in the worst case, the general activity of the project.
This in turn could be reflected in a falling price of the coin and be lucrative for the attacker through possible short positions. The reduction in the number of network nodes also enables the option of an Eclipse attack, in which the person responsible manipulates the network and can thus carry out fake transactions.
ZIP-317: Developers are already working on a solution
With the ZIP-317 improvement proposal , the developers at Zcash are now working on a solution. This should introduce the well-known principle of proportional fees and prevent spam attacks in the future.
So far it can be expected that the spam attack will continue until the mechanism is introduced and that the person responsible will try to inflate as many of the 75-second blocks as possible.