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The Rise of Darkcoin

Edit: Due to some error on the site i reposted this article again, losing all its social stats. sorry.

The appeal of Darkcoin (DRK) to users of darknet or deepweb marketplaces is fairly obvious. It’s a currency designed with strict anonymity in mind and it may finally be the first alternative cryptocurrency to have cracked how to accomplish that. For this reason it has been climbing up in price for the past few days as traders come to realize the hype is not simply another round of ‘pump and dump’ (where forks of Bitcoin are talked up to inflate the price beyond any reasonable additional feature beyond design/name/logo).

drk

If Darkcoin is the Litecoin killer it is precisely this because it acts as Bitcoin’s hand-to-hand double. If the mantra is that Litecoin is the silver to Bitcoin’s gold then we can say Darkcoin may well become the anonymous cash to Bitcoin’s recording system (the blockchain when one has not taken sufficient action to anonymise a transaction).

Bitcoin remains tricky for deep web marketplaces because its recording of transactions means it remains open to public analysis. Not many users can be identified through an IP address in the days of VPNs – unless DNS leaks come into – or Tor (or I2P). As a transparent network by nature Bitcoin further allows for wallet analysis whereby one can piece together connected accounts through good old fashioned research. It’s a lot of work for the casual marketplace user to keep on top of all this and everyone knows people sometimes get sloppy.

What Darkcoin offers is an in-built process of obfuscation wherein coin-mixing is not a service provided by outlets such as Bitcoin Fog, but a feature known as Darksend considered essential to the Darkcoin project as such. Coins will be jumbled in master nodes and further pooled together to ensure anonymity. Darksend comes with a small price in this regard. The process will ensure transactions are slower, but that’s likely a price most people will be willing to pay. This will all be powered To entice users to run these masternodes 10% of all blocks that are mined are funnelled back to those running the service (currently one needs 1000 Darkcoin in order to be able to run one).

Given the current cost of Darkcoin this further displaces the risk of someone buying up all the masternodes and as time passes that will become very difficult indeed. This is a stroke of brilliance since it guarantees, in as much as this is possible, that masternodes remain decentralised.

In light of this some may say there are other solutions. For one Dark Wallet, like Bitcoin Fog (Tumbling Service), requires a mediator and this, as always in such cases, trust in a service in a world where we have seen, time and time again, how cryptocurrency services fail their users (in one way or another). In such instances one undermines the entire ideal of an anonymous one on one transaction by introducing a third eye to proceedings. This reverts the entire back to centralisation. Smaller alt coins do promise similar services, but thus far have been considered either too complex for normal users (Bytecoin) or simply lack the take-up and popularity of Darkcoin (thus failing to offer value for transactions to occur at all).

fog

As Darkcoin increases in popularity we will find more and more masternodes with which each transaction canrandomly be run through. If the market reached a level akin to Bitcoin then its applicability to dark web marketplaces would be close to revolutionary since more transactions means more ‘fog of war’ (each purchase contributing to the impossibility of the task of tracing the actors involved).

What stands in the way of Darkcoin? For one we’ll need to see whether it can survive the pump and dump cycles of other alt coins. This it has been doing remarkably well and its reputation is broadly related to its having an actual identifiable ‘difference’ from Bitcoin (as opposed to its many blunt copies). The desire to own a masternode also seems to be driving sales and thus the long-term prospects of the coin seem assured. However, will normal users wish to use it when they have Bitcoin? It’s possible many will given that many drawn to Bitcoin are also drawn to privacy issues by disposition.

But many will make the conversation based on price alone. The man on the street may be scared off by the associations with ‘dark’ and, well, the dark web! From the perspective of the deep web marketplaces getting behind Darkcoin in some fashion, even in small ways, seems wise since the coin suits the needs of that community. Buying in at the current price is perhaps a sensible enough option for long-term thinkers, but not quickprofit traders.

Mining is certainly an option for those with the hardware. Either way it’s highly likely the marketplace community cannot avoid the rise of Darkcoin for much longer nor should we want to. An absolutely decentralised currency may be just the thing we’ve been waiting for.

15 comments

  1. Finally, Yall writing about darkcoin, jk, you guys are on point but that was my issue with Bitcoin was the public blockchain. Darkcoin and other private transaction coins are the future of deepweb marketplaces. Bitcoin is going legit and will need a cryptocurrency to step in the game.

  2. Great article!

  3. This is great, I heard the Armory was planning on integrating DRK once it came out of beta. I’m betting the early adopter vendors and marketplaces will benefit intensely.

  4. darkcoin-is-instamined

    You need to tell people that darkcoin was instamined. This is like premining, except the coins are issued in the first block (or first dozen blocks) instead of before the first block, so it lets them claim that they “technically” didn’t premine.

    Just check out their own block explorer: block #1 issued 500 coins, and four months later block 71871 issued only 8 coins.

    It’s an instamined coin that uses a technicality to claim it wasn’t premined. Scammy for sure.

    • Please look at the code, it’s open source. It was supposed to be 500 as long as the difficulty was low enough, but it was a bug in the difficulty calculation. No one knew how big the problem was before a block explorer was created, and then it was too late to do a restart. Also those coins have been distributed.

      Early adopters deserve to be rewarded due to the high risk they are taking.
      Stop crying and being jealous, Bitcoin was also instamined.

      • darkcoin-is-instamined

        > Please look at the code, it’s open source.

        Yes, I did, and that’s exactly why I didn’t get into darkcoin back in February.

        > was a bug in the difficulty calculation.

        Nice try, buddy.

        • You will regret that decision for the rest of your life and as it tortures you it compels you to insult it in the hopes you have some effect on bringing others down to your misery. You’ll need an army of equally inept crybabies who also made the biggest financial mistake of their lives to join you and still DRK will surpass Dodge (love dodge though) in another week in market cap and then it’s straight to the +$100 point by end of 2014.lets bet on it.i can bet 15 btc I made this week from drk how bout you?

    • You hate only because you care

      Have you seen the amount of $dollars traded over the last few weeks? $millions and $millions and $millions.

      Haters only hate because they have an agenda to push.

      Seriously, get over it.

      Darkcoin brings so much innovation to the crypto world. Just look at the number of people using x11 in their algo to save power and mine more efficiently.

      Just look at the number of people using Darkcoin Gravity Wave to prevent multipools from raping their coins and leaving miners with high difficulty.

      Just look at the introduction of Master Nodes that can be used for so many new decentralized services.

      Just look at what is planned for making darkcoin more secure, I2P, Ring Signatures, etc.

      Haters only hate when they missed the boat or picked the wrong horse.

    • most_coins_r_instamined

      from what i can tell the distribution seems fair compared to btc and all the other altcoins. they voted if the dev should give some free coins away in a airdrop but the community voted not to do that. i suppose they will use those coins for marketing and bounties etc. i see no problems just jealous fud.

  5. Thanks Cipher for this awesome opening article with us!

  6. I am also closely watching Monero as I find the anonymizing Ring Signatures beautiful to watch…

    A transaction for 32.065 Bitmoneros comes in as

    30.0000
    02.0000
    00.0600
    00.0050

    Monero means “coin” in Esparanto, which is also cool.

  7. “That’s why I didn’t get into DRK in February; “because I have weird counter-intuitive philosophy on how coins are launched which forces me to ignore factual information ie; due to the insane adoption rate of DRK due to its awesome and unique features it doesn’t matter that there where initial coins insta-mined. With the type of distribution Currently in effect across Millions of transactions AND the security of the master nodes it doesn’t matter 1 bit that it was insta-mined.the fact you intentionally ignored this coin will plague you for the rest of your life.sure glad I bought the coins you ignored back in feb….celebrating from my yacht.

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