Cloakcoin Developer Discusses Anonymous Transactions

Journalist:
July 30, 2014
Cloakcoin is trying to build an anonymous ecosystem.

One of cryptocurrency’s greatest selling points is the freedom it affords users in regard to managing their assets. However, many in the crypto-community do not believe true freedom can be achieved until they have a way to transact online with complete anonymity. As a result, a variety of coin developers have sought to implement anonymous transactions into their source code.

Darkcoin was the first major coin to attempt this. After its dramatic price rise, many altcoins sought to draw attention to themselves by promising anonymity as well. Of course, most of these promises have been empty.

Cloakcoin was one of the many coins released in the wake of Darkcoin‘s popularity, and I initially dismissed it as another Darkcoin clone with empty promises. However, I recently did some marketing consulting for Cloakcoin, for which I conducted in-depth research of Cloakcoin’s anonymity process and development plan. I was very impressed by Cloakcoin’s commitment to creating not just anonymous transactions, but a fully-decentralized anonymous ecosystem built into the desktop wallet client. Most of Cloakcoin’s flagship features are either in beta mode or have still not yet been released, so they have not delivered on their promises yet. However, they appear well on their way to making anonymity a reality.

I was interested in learning more about Cloakcoin, particularly in regard to the unique Proof of Stake Anonymity protocol (PoSA) Cloakcoin uses to anonymize transactions. I spoke with Cloakcoin developer TheDagger about PoSA and the CLOAK ecosystem.

[divider]CCN[/divider]

What separates Cloakcoin from the numerous coins which have promised anonymous transactions, many of whom have failed to deliver?

TheDagger: CLOAK has actually developed an implementation, as opposed to the vaporware seen from numerous coins parlaying the promise of features to generate hype.

How does PoSA create secure, private transactions?

TD: PoSA transactions are encoded and cycled through multiple rounds of processing, before finally being sent on to their intended recipients.

How is PoSA different than normal Proof of Stake?

TD: The PoSA system extends PoS stake mining to perform anonymization processing in exchange for processing fees.

Security expert Kristov Atlas issued a warning that purportedly-anonymous coins based on CoinJoin may not prevent determined observers from tracking transactions. How does Cloakcoin’s method differ from the CoinJoin process?

TD: CLOAK’s mechanism is an independent implementation of an anonymization process not directly derived from CoinJoin although there may be some similarities (the original CoinJoin post was written rather broadly). PoSA differs in that it is a process with multiple iterations.

One objection to Darkcoin’s DarkSend is that the DarkSend masternodes, which mix transactions, have access to the transaction information. How are you able to ensure anonymity for Cloakcoin while still using nodes to process transactions?

TD: PoSA data is encoded in such a way that it does not link the originator and the recipient.

Recently, you posted on BitcoinTalk that you had uncovered “an underlying flaw” affecting the “vast majority of PoS” coins. Could you elaborate on that statement and explain why Cloakcoin is not susceptible to this flaw with PoSA?

TD: Without wanting to expose the weakness in public it’s safe to say that we reduced the exposure of Cloakcoin and will completely eradicate any possibility of manipulation with the integration of OneLedger.

In addition to PoSA, your team is developing OneMarket, a decentralized Cloakcoin marketplace. What role will OneMarket play in your community ecosystem, and what benefits does it offer users?

TD: OneMarket will play a central role in the community ecosystem. It will be a place where trading for literally anything (deemed morally right) can take place, all under one roof. Buyers and sellers will be able to communicate using the custom encrypted messaging systems. As outlined in the whitepaper, various systems are put in place to ensure autonomous self-regulation. The community can decide how to build and shape the future of OneMarket as it will have API compatibility from the start allowing an opportunity to build on top of it.

Despite launching just a little over a month ago, Cloakcoin has made significant development progress. How have you been able to move so quickly?

TD: A mixture of funding, having the right contacts for various tasks and a motivated core team of 7 at time of writing. We are also encouraging a secondary development team to build auxiliary services such as SMS wallets / IronCloak and CloakVPN with more on the way from other people that want to contribute.

Disclosure: The author has done freelance marketing consulting for Cloakcoin, for which he was paid in CLOAK.

Last modified (UTC): October 15, 2019 06:31

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.