With the release of wallet version 11.1.25, Darkcoin again delivers on its promises. Instant transactions suitable for day-to-day living; the ability to hardfork without permanently breaking the blockchain (if something goes wrong); and being able to make money by supporting the blockchain (without mining). All these add up to an explanation of why Darkcoin is taken as a serious contender for Bitcoin’s de facto supremacy.
When asked on a recent episode of Beyond Bitcoin how he framed the problem that Darkcoin was designed to solve, Darkcoin lead developer Evan Duffield said,
The issue is that when you do a transaction on the Bitcoin network or any of these cryptocurrencies, there is a public record. And it’s a one to one relationship from where the money was to where it’s going. And that information is literally accessible to everyone’s machine who runs a full node forever. So if you can figure out anyone’s address, you can figure out a lot of people’s addresses. You can mine that data. […] Then it becomes a gross invasion of privacy.
He went on to speak about what made Darkcoin unique, saying that Darkcoin’s being unafraid to fork the blockchain when necessary is important. Which leads into one of the first important changes in the new wallet, a concept called “sporking.”
There will be a market eventually for a cryptocurrency that values its users’ privacy. We’re willing to do hardforks. We’ve actually done a bunch of them successfully. The Bitcoin developers have always been very scared of that. […] The [spork] allows you to remotely turn on a hardfork on the network, and if something goes wrong, you can turn it off, and then the network goes back to the state it was before, and there’s no damage. […] There’s no risk to the network. […] There’s a cryptographic key and I hold the key. […] It uses something similar to the way alerts work. […] There’s a block of code that says ‘if spork, do this.’
One of the key challenges to mass adoption of cryptocoins has been the dreaded confirmation lag. Very rarely do you find a vendor willing to accept Bitcoin on zero transactions – it is a nonsensical thing to do. What Darkcoin has done with its network of “masternodes,” or nodes that are used in another of its features, “Darksend,” confirm the transactions as soon as they are done. These are computers dedicated to this purpose, thus the reason it is so much faster.
With other currencies, a block must be solved before transactions can be considered confirmed. But with the network of masternodes – which earn 20% of the network’s mining rewards and require 1000 DRK to open (at time of writing, about $2600), transactions are confirmed regardless of block solution. Duffield put it this way on Beyond Bitcoin:
On the Bitcoin network, you can broadcast something and a vendor can take it with zero confirmations, but if a miner comes out and releases a conflicting transaction, it will actually reverse that. Whereas, on the Darkcoin network, I’ve actually eliminated the possibility of that happening with what we’re calling InstantX. So we can do instantaneous transactions where they confirm in like 20 seconds.
Darkcoin Finding Its Legs Again
Recently Darkcoin has seen a resurgence in trading, with some attributing the growth to the depressed fiat valuations of Bitcoin. It has traded as high as .0155 in recent days on Cryptsy, which is the most important market for Darkcoin because it can be directly converted into dollars there. As you can see from the chart below, its value in Bitcoin was as low as .006BTC just a month ago.
Disclaimer: The author owns some Darkcoins.