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This is an unofficial business review of Darkcoin and its potential as eCash.

The post will be quite long as I research the coin, its competitors, the landscape for growth, regulatory issues, mass adoption.

The post is subjective. I am an investor in Bitcoin and Darkcoin, and I have mined Darkcoin since March.

I will seek opinion polls on various topics related to Darkcoin and then post the results as part of the business review.

I have not sought permission or coordinated my research or posts with the Darkcoin team. If they use the information, I hope it helps. If they find the information uncomfortable and not helpful I stand to be corrected on any points or they may seek to address some of the issues raised.


The Development of a World First: Cash Over The Internet


Executive Summary

Satoshi Nakamoto set out to invent electronic cash, as demonstrated by the title of his Bitcoin paper (https://bitcoin.org/bitcoin.pdf):

https://i.imgur.com/vXaasDs.jpg

However, as Bitcoin transactions can be:

* linked together and traced through the block chain (https://blockchain.info/);
* people can be traced to their Bitcoin transactions if they reveal information linking them to their Bitcoin addresses; and
* third parties are able to track Bitcoin spending to IP addresses

..then Bitcoin as it currently stands cannot be considered electronic cash, as cash is not traceable to any individual.

Darkcoin has set out to alter Bitcoin code in order to solve this problem inherent in Bitcoin in order to create cash over the internet: eCash.

The developer of Darkcoin said of the project:


For merchants the prospect of eCash should mean more sales. By removing some of the costs and friction that traditional electronic payment systems have, merchants can reduce costs and improve their margins, while allowing customers to pay without having to verify their payment credentials or employ complex security measures for protecting customer financial details - instead they just need to protect their dispatch address.

There are a number of innovations that have gone into creating an eCash version of Bitcoin, but the Darkcoin project has managed to accomplish this goal.

Background

eCash

Darkcoin is seeking to obfuscate blockchain transaction details using a mixing system that starts from within the wallet. The users therefore do not have to take additional steps to hide their transactions such as using third party tools or to go through the hassle of using different addresses.

As transactions start from within users wallets, the mixing system is decentralised. Several other systems require trusted third parties to carry out the mixing of transactions to hide their origin; these systems typically rely on trust.

Transactions that cannot be tied together turn the coin into eCash: only the two parties to a transaction know the transaction took place. The process replicates real world cash transactions, but digitally over the internet.

The problem eCash solves is traceability. Bitcoin has one feature that is currently both an advantage and a weakness - blockchain transactions can be linked and if the users personal details are revealed, their past, present and future transactions using bitcoin can be linked together. Their anonymity is removed and privacy is also given away.

https://i.imgur.com/EfMzuVl.jpg
One of Satoshi's addresses.

Bitcoin blockchain transactions are a benefit to crypto currencies at this point in time as they make it more palatable for regulators to accept Bitcoin.

However, the Chairman of the Bitcoin Foundation said on the issue of privacy and Bitcoin:


Peter Vessenes, Chairman of the Board    Apr 05 2014, https://bitcoinfoundation.org/blog/?p=679 (https://bitcoinfoundation.org/blog/?p=679)


As far back as 2011, Jeff Garzik, one of the core Bitcoin developers acknowledged that Bitcoin was not anonymous:

http://sciencefriday.com/blogs/05/14/2014/this-cryptocurrency-could-be-an-answer-to-bitcoin-s-privacy-problems.html?series=33

The publication of every bitoin transaction is how it currently secures the network, by making the block chain visible for public inspection. Bitcoin and most alt-coins based on bitcoin are the only financial tools that publish personal financial transactions in this way. If a credit card company did this, people would complain.


Coinsider This! Show 22 - Ask Andreas Antonopoulos - talks about anonymity in general, why its needed and the extent of anonymity in Bitcoin.

https://www.youtube.com/watch?v=s3j5jlB0mmQ&feature=youtu.be&t=1h24m25s

During his initial development work, Satoshi Nakamoto considered using IP addresses as the means to transmit Bitcoins between parties, but at some point he must have considered the implications of having IP addresses being linked to transactions and therefore creating a historical record of transactions that could be linked back to individuals.

https://i.imgur.com/l1lAnBr.jpg

New research has since highlighted that there are methods for tracking Bitcoin transactions by using tools to identify the IP addresses of senders and receivers of Bitcoins.

A research paper published in May 2014, highlighted the approach that could be taken to reveal IP addresses of those using Bitcoin: Deanonymisation of clients in Bitcoin P2P network,

https://i.imgur.com/eZNFmVK.jpg

http://arxiv.org/pdf/1405.7418.pdf

With research increasingly focused on Bitcoin's lack of anonymity in certain circumstances, in addition to research showing how users IP addresses could be uncovered by using Bitcoin, there is a reasonable assumption that either users could be put off using digital currencies, authorities could try to restrict digital currencies because of potential infringements against privacy laws or a combination of these and other factors.

Bitcoin's exposure to IP scanning is not something new, as noted by Bitcoin's former chief scientist and senior Bitcoin Foundation board member Gavin Anderson, but sophistication in scanning for bitcoin addresses and peoples location and identity is now starting to gather pace.

https://i.imgur.com/4X3AKoY.jpg
http://bitcoin.stackexchange.com/questions/193/how-do-i-see-the-ip-address-of-a-bitcoin-transaction

As part of its development plan, Darkcoin is seeking to improve on protection measures to make it difficult or impossible to link transactions to IP addresses.

Creating anonymity tools for Bitcoin and using alternatives such as Darkcoin could not only benefit digital currencies, they could actually save digital currencies and allow them to develop into the future.

General Landscape and Market Size for eCash

https://i.imgur.com/b8rsKJy.jpg

Darkcoin Mission Statement and Vision, 28 May 2014

As of 22 April 2014, Darkcoin lacks a mission statement. It also lacks a vision, beyond that of creating an anonymous crypto currency.

My personal view is:

Darkcoin: Mission Statement

To create long term sustainable value for Darkcoin investors, users and supporters.

Darkcoin: Vision Statement

To be the trusted provider and leader of global decentralised eCash for consumers, merchants, businesses, not for profit organsiations and anyone who wishes to maintain private electronic financial transactions.

Darkcoin in the Media

* Medium.com, 18 March 2014

https://medium.com/on-banking/a923facddc3c (https://medium.com/on-banking/a923facddc3c)

* Wired, 5 May 2014


http://www.wired.com/2014/05/bitcoin-anonymous-projects/ (http://www.wired.com/2014/05/bitcoin-anonymous-projects/)

* RT, Boom and Bust, 6 May 2014
https://www.youtube.com/watch?v=rIXCWtgid8Q (https://www.youtube.com/watch?v=rIXCWtgid8Q) @ 22 mins 30 seconds

International Business Times, 12 May 2014
http://www.ibtimes.co.uk/cryptocurrency-news-round-dogecoin-twitch-living-bitcoin-darkcoin-rises-1448153 (http://www.ibtimes.co.uk/cryptocurrency-news-round-dogecoin-twitch-living-bitcoin-darkcoin-rises-1448153)

CityAM, Darkcoin: The cryptocurrency putting privacy first 12 May 2014
http://www.cityam.com/blog/1399908808/darkcoin-cryptocurrency-putting-privacy-first (http://www.cityam.com/blog/1399908808/darkcoin-cryptocurrency-putting-privacy-first)

Coindesk Advanced Algorithms, 16 May 2014
http://www.coindesk.com/advanced-algorithms-maxcoin-dogecar/ (http://www.coindesk.com/advanced-algorithms-maxcoin-dogecar/)

Wired: Darkcoin, the Shadowy Cousin of Bitcoin, Is Booming 21 May 2014

http://www.wired.com/2014/05/darkcoin-is-booming/?mbid=social_twitter


https://i.imgur.com/hH0Xm25.jpg
http://www.coindesk.com/true-anonymity-darkcoin-king-altcoins/

Keiser Report, 27 May 2014
https://i.imgur.com/Ms3WlEf.jpg
http://youtu.be/-FXKXH7gvmw?t=9m51s

Competition

There are several competitors to Darkcoin.

As at 09 June 2014, a third party survey of the various anonymity coins showed Darkcoin as the current front runner.

https://i.imgur.com/Dkr1dBL.jpg

https://bitcointalk.org/index.php?topic=568166.msg6188433#msg6188433

The OP of this poll, who seems to be a supporter of Anoncoin, has stated his intention to let the survey run indefinitely.

Within the wider landscape, Zerocash is a new alt-coin which is yet to be released but has been assessed to be one of the more prominent and serious competitors to Darkcoin.

https://i.imgur.com/4MLl1g7.jpg

Led by Professor Matthew Green of Johns Hopkins University, Zerocash will be using Blue Midnight Wish as its hash algorithm and will rely on new anonymity features and proprietary source code that are expected to provide greater anonymity compared to Darkcoin but at the cost of not being fully vetted or tested.  

As at 20 May 2014, the Zerocash alt-coin, which is expected to be based around the Bitcoin code base, is scheduled for release towards the end of 2014, according to one of the leader developers, Ian Miers:

https://i.imgur.com/QZv3bnH.jpg

The launch of Zerocash also requires a trusted third party to begin the process, but these few seconds to launch the coin has caused some concern as the trusted party could retain an ability to generate coins without being caught. For that reason, Miers and the rest of the team want to take their time on the code and arranging a trusted method for their launch.


A detailed review by one of the Zerocash creators, 27 Feb 2014, highlighted their main reservations with the technical aspects of the project:

https://i.imgur.com/m2kYuXN.jpg

http://www.youtube.com/watch?v=l7LSSE0bRRo

~9 minutes

Dark Wallet:

Dark Wallet is an online solution which enables bitcoin transactions to be made more anonymous through a plugin. The plugin, according to the developers comments reported in Wired on 29 April 2014, is a CoinJoin mixing service similar to Darkcoin. However, unlike Darkcoin, the mixing is carried out on Bitcoins and so it happens online inside a third party Bitcoin wallet service. http://www.wired.com/2014/04/dark-wallet/ (http://www.wired.com/2014/04/dark-wallet/)


Initially, the team put out some notes on the project development via reddit: http://www.reddit.com/r/Bitcoin/comments/1sinh7/hey_rbitcoin_we_are_the_developers_of_the_dark/ (http://www.reddit.com/r/Bitcoin/comments/1sinh7/hey_rbitcoin_we_are_the_developers_of_the_dark/)

Shortly following the press releases some early views of Dark Wallet started to appear. On 2 May 2014, security expert Kristov Atlas gave his thoughts:

https://i.imgur.com/BES0xQw.jpg

As the Dark Wallet progresses and more information becomes available, I will revisit this competitor mainly because it will receive a lot of media attention due to the involvement of Cody Wilson. The general feeling in March was:


Dark Wallet is certainly a project worth keeping track of and an option for Bitcoin users. However, malware that can attack browsers is a vulnerability that needs to be watched. It is also facing challenges from ISPs who may be looking to shut down access to DarkWallet.

Looking beyond the immediate anonymity centric competitors, the array of alt-coins that all seek to define themselves as payment tools face an uphill challenge to attract new supporters and retain existing ones. Their inability to compete on a level playing field with a protocol such as Darkcoin which offers anonymous and non-private payment options will likely see a redistribution of investors wealth into the next gen coins with early leaders such as Darkcoin benefiting from an uplift in value.

SWOT Analysis

Darkcoin and eCash payment networks have appealing properties compared to other payment tools, but there are also risks and threats.

Strengths

* Decentralised payment protocol
* Anonymity built into the wallet
* Full time developer and dedicated development team
* Use of established, tested and trusted processes
* Anonymity nodes require minimum wallet funds to join the network. Creating a cost barrier to attackers. Nodes can be financially penalised for misbehaving.
* Existing alt-coins attempting to integrate darkcoin's mixing anonymity system risk destabilizing their network. This creates a barrier to entry for established currencies and puts them at a competitive disadvantage
* Merchants focusing on Bitcoin

Weaknesses

* Small development team compared to Bitcoin and Litecoin
* Darkcoin long-term identity still being developed
* Branding may create unintended association with illegal use
* Hangover problems from launch in January 2014 with excessive coins minted remains a barrier for some
* Untested regulatory framework
* Development for the small start-up team is sequential and has yet to create a strategy for faster growth and parallel work streams for marketing, payment processor engagement, third party app development. The main focus is technical development.
* Leadership and team structure is still to be established
* As with the majority of alt-coins, their long-term average value is pegged to Bitcoin.

Opportunities

* Mainstream adoption as eCash.
* Development of new innovations linked to anonymous transactions such as decentralised anonymous corporations, decentralised market places, use on smartphones as pocket eCash
* Creation of strong anonymity node network which is paid to participate leading to financial incentives for new participants to create nodes for financial gain.
* USA regulators have indicated that anonymity is not a barrier to eCash. Identity checking at fiat entry and exist points is more important to regulators.
* As anonymous eCash, Darkcoin has the ability to free float its price and detach from Bitcoin if its anonymity feature is recognised by third parties and merchants as a valuable privacy tool beyond that of Bitcoin and Litecoin
* Adoption by larger exchanges will be determined by volume. The anonymity features of Darkcoin make high volume use more likely at an earlier stage than most other forms of crypto currency.
* Based on Bitcoin code, Darkcoin could beat very strong competition by being easier to integrate into existing systems that have already introduced Bitcoin or Litecoin

Threats

* Darkcoin technology is or will be open source. Clones can therefore spend more of their time focusing on marketing and eating into Darkcoin market share.
* Excessively used by bad actors for illegal purposes may create negative brand association over the medium term which may put off consumer focused merchants
* Launch of new anonymity protocols which offer better anonymity features
* Development team remains small and unable to scale the project
* Early success causing distractions and loss of focus for core team from technical and project development
* Development of Bitcoin sidechains which, when eventually made available, could link anonymity features to bitcoin transactions

Development Team & Expertise

Evan Duffield is the senior developer of Darkcoin. He works on the project full time.

He has written a personal statement about the project, its creation and teething problems https://www.darkcointalk.org/threads/the-birth-of-darkcoin.162/

The developer of Darkcoin said of the project:


There is also a growing support network of around 20 people that are helping to develop around the core team. From running the darkcointalk.org forum, to marketing support, technical testing, running mining pools, to support for merchants and third party processors.

Technical features mapped against the competitive landscape

The original concept that lead Evan Duffield down the road to creating Darkcoin was first raised by Bitcoin developer GMaxwell:


https://bitcointalk.org/index.php?topic=279249.msg2983902#msg2983902 (https://bitcointalk.org/index.php?topic=279249.msg2983902#msg2983902)

Improvements over this mixing solution are due to include the following features:


* Master Nodes These nodes handle the mixing through random selection - eduffield, 21 February 2014 https://bitcointalk.org/index.php?topic=421615.msg5282966#msg5282966 (https://bitcointalk.org/index.php?topic=421615.msg5282966#msg5282966)

* I2P: eduffield, 10 May 2014. https://bitcointalk.org/index.php?topic=421615.msg6643662#msg6643662 (https://bitcointalk.org/index.php?topic=421615.msg6643662#msg6643662)

While ring signatures present their own compatibility problems with the core DarkSend and Master Node network, the lead developer has consider the issues:

Ring Signatures, RC3 Progress Report 22 May 2014

https://bitcointalk.org/index.php?topic=421615.msg6864666#msg6864666

*IP obfuscation 12 May 2014
https://bitcointalk.org/index.php?topic=421615.msg6694377#msg6694377 (https://bitcointalk.org/index.php?topic=421615.msg6694377#msg6694377)



Developing anonymity tools for Bitcoin has proven to be difficult without creating third party tools or new digital currencies such as Darkcoin.  But efforts to create an easy to use system are ongoing, despite some reservations from those that believe Bitcoins transparency is the key to its acceptance by Governments.

http://eprint.iacr.org/2014/077.pdf (http://eprint.iacr.org/2014/077.pdf)

TBC

Target Markets

The Bank of England has prepared a detailed report on the prospects of digital payments.

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q3digitalcurrenciesbitcoin1.pdf
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q3digitalcurrenciesbitcoin2.pdf


As at 2014, the demographics for crypto currency remain heavily weighted towards early technology adopters.

BTC China, one of the worlds largest Bitcoin and Litecoin exchanges, carried out a survey of its users in 2013. The demographics of its users were:

https://i.imgur.com/5YhpqYH.jpg

Globally, this map of those posting about bitcoin on Twitter highlights the main hot spots for crypto currencies:

https://i.imgur.com/lXOTiSq.jpg

Exchanges are also a good indicator of global spread of transaction volume. However, the lack of an exchange in the USA hides the true volume of trade in the US.

https://i.imgur.com/sBN01lY.jpg

China, America and Europe are currently seen as the main global trading hubs for crypto currencies.

Distribution Channels, Customer Acquisition Strategy and Payment Processor network

Bitcoin is at the point where its market leading position could become unassailable. However, while it has global brand recognition lack of mainstream merchant adoption remains its barrier to breaking away from any potential competition.

Those who use Bitcoin for nefarious reasons will be aware of the anonymity risks and so its use for underground activities will diminish. At the other extreme, Bill Gates and Bitcoin investor Richard Branson have both publicly announced that they do not believe Bitcoin will be the market leader in the future because it offers too much privacy.


http://bitcoinmagazine.com/12510/sir-richard-branson-wants-a-transparent-cryptocurrency-but-will-customers/ (http://bitcoinmagazine.com/12510/sir-richard-branson-wants-a-transparent-cryptocurrency-but-will-customers/)

Bitcoin is in a strong leadership position because of its first mover advantage, the significant and passionate following it has and because of the substantial business investments that people have made to profit from Bitcoin.

However, Bitcoin sits in a difficult middle ground and it has many competing interests pulling it in different directions. This causes some growth uncertainties and opens the door to an alt-coin to grow and fill some of the demand in the various areas that hold Bitcoin back.

Regulatory uncertainty, lack of merchant adoption, high volume trading and lack of convenient consumer payment processes at points of sale remain barriers to mass consumer adoption for bitcoin.  These hurdles are faced by all crypto currencies.

Litecoin has attempted to play on Bitcoins investor following by suggesting that Bitcoin is gold which should be held as an investment, while Litecoin is silver which is more easily suited to everyday transactions. The message being that Litecoin is the natural choice as an everyday payment protocol.

The unique selling proposition of Darkcoin is the ability to turn crypto currency transactions into virtual cash transactions. Lack of anonymity within Litecoin, along with uncertainty brought about by new mining hardware which threatens to create pockets of centralization and threats of 51% attacks, leave Litecoin vulnerable to a new competitor such as Darkcoin.

While new merchants such as Overstock have drawn attention to the transactional benefits of using Bitcoin and crypto currencies as payment tools, much of the use for Bitcoin has been limited to activities that, helpfully, the Bitcoin blockchain allows people to follow.  

https://i.imgur.com/ZgCdRT9.jpg
A Fistful of Bitcoins: Characterizing Payments Among Men with No Names, Meiklejohn et al, 2013

From this study, which uses historical data which may lose its relevance in many cases, some of the noticeable indicators of transactions conducted were:

* Gambling - I have put together a more detailed overview of gaming here > (https://bitcointalk.org/index.php?topic=761561.msg8585129#msg8585129)
* Exchanges
* SilkRoad type services

By mapping unique Bitcoin change addresses, the researchers were able to break down their cluster of around 5.5m distinct clusters of public keys to 3,384,179 clusters. Then, after combining the fruits of their open source research and “tagging,” the researchers positively identified 2,197 of the clusters, linked to over 1.8 million BitCoin addresses.

https://securityledger.com/2013/12/bitcoins-anonymity-more-theory-than-practice/ (https://securityledger.com/2013/12/bitcoins-anonymity-more-theory-than-practice/)

While regulators focus on establishing rules that they feel comfortable with, the opportunities for crypto currency use over the short to medium-term remains around those areas of trade that court anonymity the most, taking into account the existing demographic of crypto coin users:

* Porn - Those that are thinking of using Bitcoin to pay for porn, the driving factor for internet adoption and innovation since the late 1990s, will be concerned when the media begin to talk about the lack of privacy and anonymity that bitcoin has. Anonymity payment tools are more suited to porn use than Bitcoin.

* Sex Workers - Those looking to legally pay for sex and companionship would potentially welcome a privacy centric electronic payment method enabling them to keep transactions off credit cards and off the radar of any spouses.  In addition, sex workers and porn stars are increasingly being denied banking facilities for unexplained reasons and because of this denial of access to the banking system payment tools such as Darkcoin assist both the customer and the vendor.

* Legal Fire Arms - As it is legal to pay for licensed firearms with cash with accompanying ID, using eCash could be even more convenient, including the ability to enable advance payments and deposits to be paid and large transactions to be conducted without the accompanying personal risks of carrying physical cash.

* Tax Avoidance Subject to seeking professional assistance, there could be benefits from using Darkcoin to avoid any unnecessary tax payments. However, careful tax planning is required to ensure that tax avoidance, which is legal, does not unwittingly lead to tax evasion which is generally illegal. For example, redeeming value to fiat in a tax free country or jurisdiction is a planning option that is open to some who can transfer their material place of residence to benefit from tax exempt status.

* Oppression As pointed out by the Bitcoin Foundation Chairman, using privacy tools can be of value to those living in controlled States or under oppressive financial circumstances.

* Drugs Soft drugs such as marijuana are not universally banned or illegal in every country or jurisdiction. With vendors having difficulties with securing bank accounts and having to deal in cash, eCash offers a more secure middle ground option for vendors and a safe way for purchasers to buy legal drugs without fear of being stigmatized. Where it is legal to do so, eCash may also enable internet and mail orders for those merchants that cannot access banking facilities where banks withhold services without proper justification.

While there is a desire to move into ordinary financial transactions, the initial adoption phase will likely involve some or all of these sectors. The transition to mainstream eCash needs to be weighed up with pragmatic short-term cash flow and brand building needs in mind.

* Beating corruption Charitable giving is made significantly easier with digital currencies. Projects all around the world can be easily supported with just a few clicks. Governments too may find that sending digital cash aide direct to the source needing funding might be easier and less prone to skimming by corrupt administrators. Using technology such as Darkcoin, such charity or government assistance would be untraceable and would avoid putting local people at risk of reprisals from corrupt officials missing out on their skim.

Regulatory Issues

As it currently stands, crypto currencies are understood to exist by regulators all around the world. Their main focus of attention at present is to use Bitcoin as part of their narrative to describe crypto currency in general.

Commenting on anonymity within crypto currencies, Jennifer Shasky Calvery, Director, Financial Crimes Enforcement Network, United States Department of the Treasury, confirms that financial privacy is a real and important aspect of all financial transactions.

The view on regulation is currently being considered in a similar light to Bitcoin. The Bank Secrecy Act and existing AML policies towards digital currency will still apply. In general, moving in and out of fiat requires the use of regulated entities.

Non disclosure of financial transactions on a blockchain ledger is not a reason to stop anonymity tools such as Darkcoin.

https://www.youtube.com/watch?v=M7bbDpwlTws&feature=youtu.be&t=11m48s (https://www.youtube.com/watch?v=M7bbDpwlTws&feature=youtu.be&t=11m48s)

~12mins



Marketing and Branding

TBC

Marketing and branding follows a review of demographics, target markets.

However, it is likely that Darkcoin will require a strategy for rebranding and market positioning once it becomes an established payment network with the ability to rotate into high volume mass market retail merchant use.

Innovation and Product Development

Anonymity features

The whitepaper for Darkcoin http://www.darkcoin.io/downloads/DarkcoinWhitepaper.pdf (http://www.darkcoin.io/downloads/DarkcoinWhitepaper.pdf)

The whitepaper for Zerocash is due to be published on 18 May 2014

Since moving out of Beta in April 2014, Darkcoin development has started to transition to final release through a series of release candidates (RC1, RC2 at 1 May 2014), with the aim of going live after final testing and code vetting in May and June. The developers provided this summary on progress towards final release:

Here's the new schedule for development:

- RC2 (masternode payments, DGW3) : May 14th
- RC3 (1000 DRK limit and denominated change) : May 21st 14 June
- After this, I'll find someone to vet the code and open source.
- RC4 (Bugs, security issues) new anonymity features, secret additions: end of July 2014
- Testing, RC5
- Kristov Atlas code and anon review
- ~RC5 opensource

General development

While working on Darkcoin, Evan created a number of new innovations. These are now starting to be used by other coins.

As at May 14, 2014, this is a list of the the coins that are using Darkcoin innovations.

* Badgercoin - x11
* Bulgarian Crypto Coin (BGC) - x11
* CATicoin - x11
* CryptoPowers Coin - x11 and DGW
* ConspiracyCoin - x11
* Colorcoin - x11
* Edgecoin - x11
* Einsteinium  Emc2 - looking to switch from Scrypt to x11
* ElectronicYen - x11
* Electronic LIRA - x11 and DGW
* Emirates Coin - x11
* EuropeCoin - x11
* GiveCoin - x11
* Global Denomination - x11
* Groestlcoin - DGW
* H20Coin - DGW
* HackCoin - x11 (PoW/PoS)
* HashCoin - X11 and DGW
* HighFiveCoin - x11 and users voted to add DGW
* Hirocoin - x11
* Frycoin - added DGW to fix problems with KGW
* Juggalocoin - x11
* Lamacoin LAMA lamaco.in - x11
* Limecoin - x11 and DGW
* Libertycoin - x11 PoS
* Logicoin X11 and DGW
* MaruCoin - DGW
* Muniti - x11
* Our Coin - x11 (Pow/PoS)
* PinkCoin - x11
* Nyancoin - switching algo to x11
* Quebecoin - x11 and DGW
* RAP(e)COIN - DGW
* Rotocoin - DGW
* SummerCoin - x11 (after vote on others)
* TwilightCoin - x11 and DGW
* VirtualCoin - x11
* WILDWESTCOIN - x11 PoS

X11

By May 2014 the list was getting pretty big and new coins were being launched too regularly to keep an updated list.

Coins are using X11 hasing algo because it provides CPU and GPU support, with far less power requirements and GPUs run much cooler.



Darkcoin Gravity Wave (DGW)

DGW adjusts the difficulty. It was created to fix problems found in KGW.

The founder of QuebecCoin uses it because:



DarkSend

DarkSend is an e-cash tool to make transactions anonymous.  The process begins within the wallet and therefore it is a decentralized solution to leaving breadcrumbs of spending on a block chain.


Third party developers using Darkcoin

Until Darkcoin has its final release, there will be few projects that will seek to leverage off its anonymity features. Two notable projects that have indicated their use of Darkcoin are:

* DarkRoad - launched on March 3, 2014, Darkroad is set to accept Bitcoin, Darkcoin and Anoncoin.
* Dark Stock Exchange - Decentralised anonymous corporation stock market - a project that is in its early stages of development is seeking to provide a decentralised market place for shareholders of anonymous corporations to buy and sell their stocks and shares.
* Decentralised p2p auctions and market place - a concept that has been discussed, but there are no indications that development has started

One of the features of Darkcoin that may end up being a significant competitive advantage is that its base code originates from Bitcoin. While there are heavy modifications, there is likely to be enough to make it feasible for third party Bitcoin developers, merchants, payment processors, ATMs and vendors to add Darkcoin alongside any Bitcoin offering.

Provided Darkcoin can delivery sufficient anonymity to make payments fungible or as close to cash as possible, competitors that may offer stronger privacy technology may find their protocols are to difficult to adopt by systems that have focused on Bitcoin. Compatibility with Bticoin code that makes it easier to work with might be the underlying feature of Darkcoin that is yet to be realised.


Cash flow and Valuation

A survey on the potential market cap of Darkcoin at the end of 2014 showed a high degree of confidence that the price would increase from the ~$6m at 1 May 2014 to a range between $100m - $500m.

https://i.imgur.com/4k05prJ.jpg

Taking account of the voting of the hardened supporters who consider a valuation of over $1bn by the end of the year, and the votes at the other end of the scale, the general consensus falls around $250m. Using an estimate of 4.8m for the number of coins that will be in circulation by the end of the year, the price target for each coin is ~$45 to $55.

The supply of coins, the minting of new coins and the future distribution has been adjusted since the coins launch, with a greater emphasis on scarcity and removal of inflationary pressures from the release of new coins each year.

After a vote, the developers changed the amount of coins that were due to go out into circulation https://bitcointalk.org/index.php?topic=421615.msg5823918#msg5823918 (https://bitcointalk.org/index.php?topic=421615.msg5823918#msg5823918)

The new supply lost an annual 1m new coins inflation amount, and instead went down to a range of ~15m to 23m through an annual reduction rate of 7%.

https://i.imgur.com/tOgOkQ1.jpg


work in progress - TBC

Infrastructure and Costs

For Darkcoin, the development of anonymity is based around the block chain. Transactions will be mixed to avoid leaving a trail on the block chain that is traceable.

As the project is a decentralised eCash system, there are few project costs to the development team. The infrastructure costs to run Darkcoin is transferred to the miners who carry out validation on transactions and are rewarded through the random issue of new minted coins which are released every 2.5 minutes.

Master Nodes

As part of this development, Darkcoin has created a mixing system that goes through 'Master Nodes' in a random selection process.

In order to prevent anyone from setting up a complex network of Master Nodes in order to bring down the anonymity layers and overall anonymity network, Master Nodes require to be linked to a wallet with 1,000 DRK coins. This creates an economic barrier to participation. To encourage a network of Master Nodes to be established on a decentralised basis, Master Nodes are given a % network fee from the solving of blocks. Master Nodes effectively become a proof of stake or proof of service type system where Master Nodes are financially rewarded by the miners.

The intention is to create an arms race, similar to the arms race for mining, for owning Master Nodes. The numbers and financial rewards will therefore be linked to the growth of the network and the growth of the value of Darkcoin.



Distribution of users - The Darkcoin Rich List


if you take a closer look at the top 300 wallets, you get an interesting picture of the distribution:

https://i.imgur.com/R7KZ9Ih.jpg

http://bitinfocharts.com/top-100-richest-darkcoin-addresses-1.html

Of all the wallets created in:

*Jan-14: 146,000 DRK
*Feb-14: 175,000 DRK
*Mar-14: 315,300 DRK
*Apr-14: 524,200 DRK
*May-14: 522,500 DRK
*Jun-14: 332,900 DRK
*JUL-14: 96,300 DRK
*Aug-14:713,855 DRK
*Sep-14: 125,624 DRK

Total: 2.94m DRK [~63%]

Large investors started entering the market place to buy DRK between April and May. This saw a significant peak in market activity.

During August the overall crypto market declined and alts suffered significantly. Large investors used this opportunity to buy up Darkcoins as smaller investors moved to BTC.

Overall, the initial distribution from launch in January 2014 has seen most of the early miners exit and they have been replaced by a number of investors that have purchased their holdings primarily via Mintpal and Cryptsy.

-----------------------------------------------------
work in progress.....

NB

This thread is not an invitation to treat. Nor is it any form of investment advice.

Any incentives to keep going, keep updating this thread and a sign of helpfulness are welcome:  Xtq2TgBYQiSfBLzE82inSpzNkZnkc71hZQ

Utter failure, right there.

Nice write up, thanks for taking the time.

wow! great write up. so masternodes act similar to a pos? pretty awesome!

Does proprietary imply hidden or open? If it is copyrighed but open that would be just fine; hidden means BACK DOOR.

You need some more options at the poll.

I would vote $10.000 or less.

Good job writing this.

Most people think of DRK as a coin with a lot of innovation, first X11, DGW2, DarkSend ... but most people haven't realized yet that DRK will also bring more innovation with the 2nd generation of PoS.


This is going to be awesome, it should receive a specific name, it's not just Proof of Stake, it's more advance :)

You are so funny to think that you miss the train already and write such things because of that... It is never too late to jump in ! There are so many reasons that point DRK can be more than $100M market cap soon and even more than $500M later this year !

Just agreeing with you, that it's not really POS, because it's more.  It's a new kind of work provided for the benefit of the network.

I'm still waiting for Zerocash if i want truly private currency. White paper going to be released on May 18th.

An open project always come with open source code, for sure. There will be no backdoor.

In this context I take it to mean closed source. Closed source + initial trust requirement = you'd have to be daft to use Zerocash.

Darkcoin and Darksend will be open source, available for all to inspect, and zero-trust.

There is no need to wait for that when Darkcoin is available on hand.
+1 to OP, this was a nice read indeed.

Give me a source of your information please, otherwise I think you are discrediting Zerocash.

What do you think you can to the price？

I chose the 100$

Is this just a hyped coin or is it really here to stay?

I am not picking sides, but trying to work through what will be part of the future landscape.

https://i.imgur.com/Tend9ml.jpg

http://www.youtube.com/watch?v=FXU65XsLiFk

~23 minutes

I want to know the answer to that as well.

However, the developer has said that he will work full time on the project for the next 2 years. After that he will continue working on the project developing features that the community wants to see implemented.

Recently, in the past week or two, he announced that the development team will be setting up a darkcoin foundation to work on all aspects of the project not just technical. I guess that is some sign of wanting to be around for a long period of time and wanting to engage with the world on a serious footing.

That's Zerocoin V1, are you sure you know what you talking about ?

Did you read the youtube summary?


You can try to discredit, but instead why don't you prove this wrong with some evidence? I'm happy to include corrections and something solid in the text.

You have no clue what you are talking about, Zerocash doesn't have blockchain like Bitcoin. It doesn't use Merkle tree like Bitcoin.
The silde that you show to me, it is Zerocoin.

So I give evidence, ask you for evidence which I will use for corrections; and you give me verbal abuse and no evidence.  

So here is the other party to the creation of Zerocash talking about zerocash at the end of February, a few months ago, and giving the same disclaimers.

https://i.imgur.com/m2kYuXN.jpg

http://www.youtube.com/watch?v=l7LSSE0bRRo

~9 minutes

I don't claim to know the technical details. That is not what I am trying to achieve. Collection of facts to inform and see where it may take us, that is what I am trying to achieve.

One last go. Give me some evidence.

He is trolling it on every thread about Darkcoin or X11 coins in general.
Must be pissed about his ASIC preorders.
Must be really pissed he missed the boat.

Amazing read OP.

I think the masternodes network will make Darkcoin into something truly unique. Running a masternode will provide even more incentive for people to invest in Darkcoin on top of the privacy aspect. I think the sky is the limit with regards to price.

Yes you right Dark coin will be truly unique, today I really so sad that yesterday I sold 90% of my Dark coins  :-\

http://www.youtube.com/watch?v=l7LSSE0bRRo
~20 minutes : The code will be open source !!!!!!!!!!!!! Why you said "proprietary source code" ???

Anoncoin is a scam, and was premined, not to mention it's not anonymous.

Darkcoin wasn't and is fully anonymous.

Here are the facts;

Darkcoin is the Only anonymous coin thus far

Darkcoin is the First coin to have the x11 algorithm, which is 30 to 50% cooler than scrypt and ASCIS proof

Darkcoin has Dark Gravity Well implementation, also the First coin to do so.

lol,

1. Darkcoin wasn't and is fully anonymous. // No, ask your dev
2. Darkcoin is the Only anonymous coin thus far // No, do you know "bytecoin" ?
3. Darkcoin is the First coin to have the x11 algorithm, which is 30 to 50% cooler than scrypt and ASCIS proof // "cooler" for what ? It doesn't ASIC resistant at all.
4. Darkcoin has Dark Gravity Well implementation, also the First coin to do so. // Yes, but why ?

So no one knowing you're real darkcoin address, let alone how much darkcoin is in that address..isn't anonymous?
x11 isn't ASCIS resistant? Do you even know what Darkcoin is/does?

Oh, But you're just a troll, after looking through your past posts, I see that. Not even gonna bother to reply to you anymore..

You can buy back your darkcoins!

I think I know more than you, Yes X11 is not ASCIS resistant. If you don't know why, please try to look at my history posts, you will know.

Give me a source of your information please, otherwise I think you are discrediting Darkcoin.

What will you do with the paper, can you buy stuff with it?  ???

I'm assuming you're smarter than me for a moment. What's wrong with darkcoin to make you say it's not "truly private"?

Are you dyslexic or just playing stupid?

Have you read --> Quote from: eduffield on April 07, 2014, 04:49:41 AM

He is the only Darkcoin dev :)

Have your momma read his post and explain it to you and then come back.

He's just a troll  illodin... IloveAnonCoin is not even worth responding to. All his posts are bs.

I think you should get your papa read his post  "2 million+ coins to a specific address that I hold" and then come back.

You just have to trust me when I say that you don't understand English very well. You have misunderstood what he said. Just ask your momma.

Not really in a mood for reading walls of text right now... but let me guess, he missed the lunch and is now pissed?

I voted for $5 Million of less but don't really know how to judge the market cap.  I suspect this coin will be of value in the future at this time but don't really know when that will be so I guessed low.  

haha, I saw it since first day, with no windows wallet.

You and those like you that spread FUD and troll are the only reason I decided to self moderate. You don't add to the debate, you only want to promote your own agenda.

You and your like already have your own troll and FUD thread on darkcoin.

I don't care if I invest in Darkcoin, Zerocash, xyz anonymity coin. The one or ones with the best solution is all I care about. That is why I have not and will not put a penny into Anoncoin. Deal with reality.

LOL

So, I'm guessing Steve Ballmer himself threw a chair underneath you, tied you to it, and danced ranting around the room, thus preventing you from downloading, installing and using any one of about 100 completely fucking free linux distros, that hundreds of millions of other people, who are not idiots, manage to use perfectly well every single day all over planet Earth?

That's right, only the darkcoin dev and his friends can use linux!   ::)



THE FACTS ABOUT cryptohunter

1. Too stupid to use Ubuntu.

https://i.imgur.com/NHnBXyC.jpg

Alternate views on darkcoin can be found here.

https://bitcointalk.org/index.php?topic=559028.0

For devs views, see the OP with the devs story for the creation of Darkcoin https://darkcointalk.org/threads/the-birth-of-darkcoin.162/

iloveanoncoin is such an ignorant troll. Does not having a windows wallet for 1 day mean anything? NO.

Now get lost anoncoin

In a few years the distribution will be no more unequal than Bitcoin. If they mined 50% of the coins in the first 24 hours, that's only 2,000,000 coins. It is estimated there will be about 22,000,000 coins will be produced, so it's no real problem.

+1, people seem to forget the with EVERY coin out there, the beginning miners will make a lot since it's low difficulty, and the beginning miners usually tend to sell off what they mine Very early on. The same thing happened to bitcoin and litecoin.

that's it for the trolls

Lol.  I've pointed this out to him in the past.  He didn't seem persuaded by my argument.

Looks like Iloveanoncoin is a bit butt hurt. I think he feels threatened by the anonymity that darkcoin can offer. There is plenty of room in crypto for other anonymous coins, so whenever anc implements the zerocoin, I will more than welcome it.

Anoncoin, in itself is a fail coin, no idea why he "loves" it, zerocoin is also centralized similar to ripple...so Darkcoin is the only answer to cryptocurrencies for anonymity.

the developer is full time for a minimum of the next two years - his words - he works on the project everyday. there are others in support and bounties from own pockets and community bounties for extra help.

a foundation is being set-up to get more people on the development side, promotion side and to help third party developers set-up services, products, etc.

Do you have more info on foundation? The only foundation info I have seen is the wiki. There is nothing about it on darkcointalk.

admin cross post

I haven't seen anything new. Guess its too early and too much going on.

I like this as a concept http://bitcoinassociation.org/about-us/

Bitcoin association built around decentralised autonomous corporation status, compared to Bitcoin Foundation.

DACs are interesting I would be interested more if there was a successful one. The Bitcoin Association is does not seem to be important.

All good starting points worth discussing.

Without buy-in from Evan, I'm afraid this exercise would be a waste of time.

Evan says go for it. Just chatted with him on IRC.

Am I truely the only one to support firearms industry?

Isn't the anonymity of payment only a very small part of that? I'd think getting the actual product to the consumer "discretely" is overwhelmingly the hardest part.

Still a bit early for the survey. I have to keep spamming the main thread for a week or two to get a good representation ;D

None, as Monero will be the #1 anonymous coin once people realize ring signatures in Darkcoin will never work 100%.

First it has to become unfrozen again.

This seems to be the case as the 8x size of ring signature blockchain compared to bitcoin is a bloat that is impossible to overcome. Monero will just never be able to scale up to any meaningful number of users.

Happy to report that Darkcoin has figured a way to improve security even further but without the added bloat that ring signatures would cause:

why no option for 100+ ?

last polls highest option was with 9+

where it reached 15+

Curecoin will overtake Darkcoin.

It might very well reach over $100 by end of June.

+1

i really hopes dark coin jump to 200k or more :D

No association should be important on a true decentralized system. We'll see.
Also, about DACs, i expect to see the true beta of those when NXT or SAFE are in full force at the end of this year.
Crypto land is a fast world, but some things needs their time :-)

DRK is a nice coin with many features
but I don't think it will go 35+ not this year
a coin can have this if its actually used to buy goods and/or services

This.
The proof that the big to do feature is the "adoption" is that the coins are still being moved by technological advances or code upgrades in the geek community.
The crypto world will move forward when serious attempts are made to lock up chain stores, website portals, ecommerce giants.
Of course some steps are being made, but still in the infant phase, imo.

Subbed.

maybe it will be true if there have enough community to contribute it, like linux.

It's getting more interesting~  ;D

Darkcoin getting accepted into Bitifinex shows a lot actually. It shows that the 2nd biggest crypto exchange on Earth knows the potential Darkcoin has, after all I'm sure they've reviewed the matter thoroughly before adding Darkcoin. Add that to the press Darkcoin has gotten/will have, along with the constant string of updates by it's terrific dev, and you have a perfect combo.

Darkcoin is "The anonymous solution"

Anonymous is really a big deal?? ok, a selling point, anyway.

And how about your "premine" coins? (well not rigorously premine, but very close to). You SHOULD concern this in order to build a well community then goto other stuffs.

+35 plus is my vote.  there was no premine and anonymity makes DRK more like cash.  Lack of tru anon in BTC is huge flaw.

too many newbs on these forums.

Big deal? Anonymity is the main aspect of crypto (among transaction speed and such).

Every coin should have a strategy game plan such as this, well done.

This whole pre-mine instamine is starting to get old now.  I don't care if 100% of the coin is owned by 1 developer.  If the product is great, is innovative and has useful features its worth what i'm willing to pay for it.  Its like saying I should share my wealth of my own business with random people, because its the right thing to do.  IF, which it was NOT 50% instamined, as I was one of the first initial core to discover DarkCoin, I knew right off the bat that this coin was going somewhere...I spent 10's of thousands of dollars on mining servers from microsoft and amazon to mine DRK coin...I took a huge gamble and it paid off...then there should be reward for that.  At the writing of your message there was barely 4 million coins minted, of a possible 20+ million.   Thats NOT 50% instamined...what about the other 16+million coins yet to be mined?

Ohhhh I didn`t know about it!
Selling all my coins now and the price will get to 0,125 LOL, thank you told me that :D hehe
This will not stop me from buying more.
BTC LTC wasn`t instamined/premined?
Have a nice day

The Darkcoin project is the most exciting thing happening in cryptos.

I question the motives of those fudding coins we all know will make it.

Darkcoin is even perhaps saving Bitcoin by being so alive with new innovation.

While satoshi left Bitcoin already, Darkcoin is in the works as we speak.

I can't wait!!!

DRK ---» http://media2.giphy.com/media/J6xbWpR4kKaME/200.gif «--- DRK

So the poll question is "In two weeks time after Darkcoin is open sourced, how many clones will pop up?"

At least 15 minimum. DarkerCoin, DarkestCoin, DarkDarkCoin, EveryoneGetsAMasternodeDarkcoin aka Oprah'sDarkCoin.

As many times as a copypaste donkey can git clone. Hell, they could automate the names (darkaardvark, darkabacus...) and minor channges and post ANN threads with bots. They could make a metaclonecoin where all the mining machines post thousand of darkcoin clones per second as proof of work...

I exaggerate a little, but bear it in mind if you're ever tempted to invest in one.

There will likely be as many Dark coin clones as Nxt clones.

LoL at this awesome poll!

You forgot to add "my kidney" to this poll

added.

cheers

So do you want my kidney? Cheap dirt , I would let it go or 10 master nodes. Comes from smoke-free house :)

coins101, you have so much energy, I'm totally envious!  Love your threads!  LOL.  BTW, Mr. Snowden all the way!  He needs to be pardoned NOW!

Sorry, but it's not... or else DRK wouldn't be so cheap.

You cannot do anything serious in life anon...
Like own real estate, leave an estate, build a non-virtual business, etc, etc.

"You cannot get rich without paying tax", poker/gambling legend Doyle Brunson.

You WILL have it all taken away... and end up in jail... or be blackmailed... and settle for less than rich...
Unless you wanna be a hobo or nomad or professional criminal.

Anybody under 30 is waaaaay too young to understand the Long Game.

I just love his polls :)

LoL @ This Poll, fantastic!

I got in touch with NiceHash the other day, to be fair, this is their response:

Hi,
We already explained to DRK authors that we don't even have an DRK Daemon. We are not mining DRK at all, we only provide hashing power, which is then forwarded to the end-users pools - so the end-user pools should be updated, we can't do anything about it.

Kind regards,
NiceHash.com

how about masternodes 5%?
not even an option
poll made by masternode owner
you are like politicans with their own wage
DISGUSTING, HILARIOUS
masternodes payouts are way to high!!!

Today would be a good day to forget I'm old and mature and just start smok'in some weed..... but I'll just settle for a beer.... LOL

How much does it cost per month to host one of these masternode fellas?

Ask these guys. plenty of help on darkcointalk

https://darkcointalk.org/threads/service-masternode-shares-with-automated-payouts-70-nodes-running.1425/

New poll is up *pump*

I thought we would be deciding on a name not a naming system. My vote is for we can pick completely unrelated names each time, and create a new poll with specific name options for this one.

Then make sure you vote for "Darkcoin should be more creative than that. Let's think up a cool name each time."

Camosoul's left nut will use his vote, so you'd better use yours!

Not a big fan of naming after community members. Needs something more marketable to appeal to those outside of the "inner circle" of supporters.

Yep, please. This is a serious poll this time. :)

Can't we just call it insider circle jerk v1,v2...?

Call it Darkside :D :D ;D ;D ;D ;D