[ANN][DASH] Dash (dash.org) | First Self-Funding Self-Governing Crypto Currency

[shojayxt]

The vast majority of retailers, vendors, and businesses will never conduct financial transactions anonymously.

What do you mean by "conduct financial transactions anonymously"?

Retailer has your name and address etc what it needs to send the goods to you, and generates a one time drk address where you will send the payment. Was this the kind of "anonymous financial transaction" you were talking about that they'll never conduct?

What benefit does DRK provide over an already established and used coin like BTC?  Why would I switch to DRK as a payment method over BTC when I don't require anonymity and like you yourself stated they have your name and address?

No entity is going to process payments for an anonymous coin where they are unable to track the transaction.

Did you read his post? They will be able to track the transaction just fine. They will see the address(es) where it's coming from, and they will see the address where it's going to. What more do they need? And why would they even need to originating address(es) anyway?

How is it anonymous if they can track the transaction?  Why would they need the originating address you ask?  What about charge backs or returns?  Bitcoin already provides track ability.  I don't understand your argument regarding an anonymous coin.  You're saying Darkcoin can be tracked?  I thought it was anonymous.  

One last thing.  It was the decision to tax the miners 20% to pay the masternode operators that changed my faith in Darkcoin.  That is unfair and blatantly favors those that have more than others.  Some individuals have posted they are running numerous masternodes.  Because they have thousands of coins they get to take 20% from someone that is likely not even breaking even mining Darkcoin.   You have people on here playing Tax man and going after pool operators as if they are criminals for not making masternode payments.  Some people even suggested DDOSing non-compliant pools.  You have all these anti-government types embracing Darkcoin while at the same time supporting the same kind of taxation that they are supposedly opposed to.

If there was no incentive to run masternodes, the block reward the miner gets would be worth a lot less than it is now. Give some away to get more back. I can't understand you're not seeing it.

Oh I see it just fine.  I just disagree.  But thanks for being nice.

[eltito]

But you don't want to make Darksend a rare, one-time event for your money. You want it mixed with others money always to enable anonymization of new money. Otherwise you get a chicken and egg scenario (i.e. awesome Darksend network build out with nobody feeling like they need to Darksend because they sterilized already, so new money has to wait a long time to be Darksent). Everybody should be using the Darksend format to keep liquidity up.

After every transaction though money will be darksend+ed. So same amount of mixing goes on. But your transaction speed doesn't suffer. Every wallet premixing. There will be plenty to go round.

Ok, agreed. We're just splitting up the masternode steps in time, which will make traceability that much harder (temporally speaking). We can do step 1 of Darksend+ to redenominate as soon I receive DRK. Then I'm prepared for step 2, which is the 'instant anonymous' transaction. Yep, I'm on board now.

Right.

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

As always, consult your attorney etc. etc. because they can make a law for anything. But your logic does seem reasonable.

Another question though. I would be concerned about real time data analysis during step 2 of Darksend+. Can the re-denominated addresses be de-anonymized since their outputs would be spent at the same time? By that I mean not only would my addresses appear in the same block, but the broadcast of the transaction would group my addresses together in time. Is there a countermeasure that can be deployed for this?

Put another way, my group of re-denominated addresses appear at one time on the blockchain. A subset of them appear again as spent at a later time in the blockchain. Is that inconsequential?
 

If you were the only address denominating funds on a single block, perhaps.  But what if the entire network was denominating funds automatically at a scheduled time (or pre-determined block)?

[JGCMiner]

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

Plausible deniability ftw!

As someone pointed out above, of course, aways consult your attorney.

That said, I'm not sure it's just plausible deniability.  Once this is implemented, Masternodes will simply be denominating funds.  They will no longer be facilitating the actual transfer of funds for purchases between a buyer and a seller.  They are completely bypassed in that regard.

Wait, so in this case there isn't any Coinjoin?  The pre-denominated funds are directly send from A to B without using a masternode?

[shojayxt]

How does DRK solve any problem for merchants and clients?  I have bought items from reputable merchants using Bitcoin. I didn't notice any problems.  In fact, every purchase I have made from overstock.com was flawless and immediate.  There isn't any problem that needs to be solved.

Please read this:
http://www.wired.co.uk/news/archive/2013-06/06/bitcoin-retail

Thanks for posting the article.  I agree that bitcoin does allow for snooping of financial transactions once you have the bitcoin address.  But instead of embracing Darkcoin I think businesses will just continue to conduct their financial transactions through normal banking channels.  Also, overstock.com generates a new btc address for each purchase so as long as businesses didn't just reuse the same address there wouldn't be an issue with being spied upon.

[coins101]

...

Darkcoin suffers from a bad methodology to achieve anonymity and it's put everything into this one basket.

Sorry to hear you lost faith in the project. Also, sorry you're going to be getting out at a horrible time (right before I announce I have EVERYTHING figured out to make Darkcoin mainstream?).

Over the past couple of days, I've made huge leaps in the Darksend technology. In fact, RC4 will be the final solution to Darkcoin's anonymity. The client will automatically look at all of your funds and it will be able to tell which funds are not anonymized, if it finds non-anonymous outputs it will run them through a darksend with other clients. After that process, users can send without Darksend using the anonymous outputs for instant transactions without waiting for other nodes (with no upper limit on transaction sizes).

The other thing you're missing is that there is a reason I forked Bitcoin. Adoption for Darkcoin will be MUCH faster and easier for vendors, because all of the APIs are the same.

Expect more news in a few days. I have lots of work to do, but soon we can start testing all of this new functionality.

See?

 Bitcoin is one thing, LTC is another.

 If you're a BTC merchant, you're a brave warrior, plowing new territory.
 If you're also an LTC merchant, you're 2 steps ahead of the previous , tech wise.
 Merchant regulation SUCKS, but has societal purpose.
 DRK solves BTC's prime problem for merchants.
 DRK solves BTC's prime problem for merchant's clients
 DRK solves BTC's prime problem for immense immovable scrutinised private capital.

  No need to have a cryptography degree to solve this equation.  

Darkcoin is brilliant both for micro and macro transactions

How does DRK solve any problem for merchants and clients?  I have bought items from reputable merchants using Bitcoin. I didn't notice any problems.  In fact, every purchase I have made from overstock.com was flawless and immediate.  There isn't any problem that needs to be solved.    
 and as long as you pay taxes when you convert to fiat they
DRK does indeed solve BTC's traceability when it comes to money laundering and other nefarious purposes.  

The beauty of BTC not being anonymous is that it will be adopted by the mainstream and used for actual financial transaction.  I still have not heard where you will be able to spend DRK or even any reputable vendor embracing DRK as a payment method.  It likely won't happen because businesses are not going to put themselves in a position where they could potentially run into trouble with FinCEN.  In case you don't know, FinCEN "Financial Crimes Enforcement Network http://www.fincen.gov/ " mission is:
 
"FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities."

I would hate to have my fortune tied up in an anonymous cryptocurrency that could be shut down at anytime by the United States Government using the Patriot Act and National Security as justification.  They find a Darkcoin wallet on a seized terrorist laptop and it's lights out for Darkcoin.  Any company hosting masternodes in the United States will comply with any order to shut down Darkcoin network traffic.  European governments would follow suit, most South American countries will do whatever the US tells them to do and the Chinese don't want any crytptocurrency.

What many fail to see is that the main selling point of Darkcoin could actually cause it's demise.  Do you actually think that the United States government is just going to allow people to send whatever they want to whoever they want?  Potentially funding terrorists or laundering money to avoid paying taxes?  Not gonna happen.  Congress would find bipartisan support to enact laws to prevent just that from happening.  

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

~12mins

You seem to have missed the person who enforces the section of law you are quoting, saying anonymous crypto is OK.

The US government ain't shutting anything down.

[eltito]

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

Plausible deniability ftw!

As someone pointed out above, of course, aways consult your attorney.

That said, I'm not sure it's just plausible deniability.  Once this is implemented, Masternodes will simply be denominating funds.  They will no longer be facilitating the actual transfer of funds for purchases between a buyer and a seller.  They are completely bypassed in that regard.

Wait, so in this case there isn't any Coinjoin?  The pre-denominated funds are directly send from A to B without using a masternode?

No Coinjoin mix on the second phase, correct.

Non-denominated funds are sent out automatically to a MN for denomination, then sent back to your wallet (this may or may not involve several MN hops, I haven't spoken to Evan about that for a day or two and he comes up with new ideas every 5 minutes).  

Once back in your wallet, they just sit there, all smug and anonymous until you decide to use them.  There's no real need for a need for a 2nd Coinjoin mix to occur after that.  When you send funds, your wallet automatically selects pre-anonymized denominations and sends them directly to your intended recipient.

[shojayxt]

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

Plausible deniability ftw!

As someone pointed out above, of course, aways consult your attorney.

That said, I'm not sure it's just plausible deniability.  Once this is implemented, Masternodes will simply be denominating funds.  They will no longer be facilitating the actual transfer of funds for purchases between a buyer and a seller.  They are completely bypassed in that regard.

If the United States government gets a hint that a one cent of funds was transferred to any terrorist organization using the Darkcoin network it's lights out.  Plausible deniability doesn't mean a thing when Amazon and every other provider in the United States complies with a court order and shuts down the masternodes.  

I'm not promoting cryptonote coins as they have plenty of their own problems.  But they offer true P2P anonymity that isn't subject to having a masternode network shut down.

[illodin]

The vast majority of retailers, vendors, and businesses will never conduct financial transactions anonymously.

What do you mean by "conduct financial transactions anonymously"?

Retailer has your name and address etc what it needs to send the goods to you, and generates a one time drk address where you will send the payment. Was this the kind of "anonymous financial transaction" you were talking about that they'll never conduct?

What benefit does DRK provide over an already established and used coin like BTC?  Why would I switch to DRK as a payment method over BTC when I don't require anonymity and like you yourself stated they have your name and address?

Do you know that you don't need anonymity? Because the information you leak using transparent blockchain during the years could be used in so many ways we can't even imagine yet. And yes, the retailer obviously should have my name and address if I'm going to buy something from them - but they shouldn't be able to see where else I've been shopping. So with DRK all they would know is my name and address, and that I sent them coins from an address they can't link to anything else.

No entity is going to process payments for an anonymous coin where they are unable to track the transaction.

Did you read his post? They will be able to track the transaction just fine. They will see the address(es) where it's coming from, and they will see the address where it's going to. What more do they need? And why would they even need to originating address(es) anyway?

How is it anonymous if they can track the transaction?  Why would they need the originating address you ask?  What about charge backs or returns?  Bitcoin already provides track ability.  I don't understand your argument regarding an anonymous coin.  You're saying Darkcoin can be tracked?  I thought it was anonymous.  

They can "track"/see that the coins were sent from some address that they can't link to anything else (= anonymity) and sent to another address (their own). That's enough tracking they need to return the coins for example.

[toknormal]

A truly anonymous coin will be designed with anonymity from the beginning.

I'm not sure you haven't put your foot right in a great big technical cowpat here. You might know what your talking about and you might not have a clue but I'll give you the benefit of the doubt.

From a software engineering point of view though, integrating functional layers like your suggesting is sometimes a good thing and sometimes a complete disaster because you're creating a coupling that you'll be forced to live with for the rest of the coin's life. You would only ever do that if you were absolutely sure you never wanted to evolve those two layers independently of each other.

On the other hand, keeping them separate (the anonymity layer and the blockchain layer) has some huge advantages. In particular, as we've already seen, it allows the blockchain layer to retain legacy compliance and compatibility with commercial APIs while at the same time liberating the anonymity layer so it has the capacity to evolve rapidly in response to real world use. We've already seen this happening - we've seen how much flexibility there is having the functional layers decoupled.  If you weld them both together, your "stuck". You can't evolve the properties in one without being ball and chained by legacy interfaces in the other.

You say that the RC2 and RC3 forking issues belie a fundamental design problem i.e. the decoupled model. Again, I think you've made a very big mistake here.

I saw it the other way around - i.e. as evidence that something "real" and successful was going on in this project. The forking was nothing. Sure, it made a big splash and as the dev correctly expressed - was "unacceptable" but it does not - as you contend - stem from the decoupling of the anonymity layer from the blockchain layer. It's simple software development - original work being consolidated. If you don't want to see that kind of thing then pick a coin that's going to have the same features in 6 months time as it has today.

So in summary I don't think there's any basis for such a point blank appraisal. I think it's highly superficial, lacking in technical depth and not remotely thought through. In my opinion, DRK has got it right and the others are all heading straight up a cul-de-sac that's going to leave them like beached whales - having a reasonable anonymity model but with no audience.

In addition to all of that, the decoupling principle goes right back to the original Darkcoin mission statements - see section 3 ("Why is this approach the right one") here: https://medium.com/@simon/the-bright-side-of-darkcoin-a923facddc3c

There is a definite need for an implementation that solves the anonymity problem with a decentralized approach and proven technology.

Note the phrase "proven technology". Markets like "proven technology" but they also like leaders, so again the decoupled approach makes sense where the coupled one doesn't. This stuff has all been thought through in far more depth than most 5-second posters on here realise, with due consideration being given to optimising both technical and end-user (or "market") priorities.

Under these circumstances, you can't really blame the devs for sticking to the original "plan" and mission statement.

It was a good one then and it hasn't been bettered.

[camosoul]

Lamest FUD of any troll.

I still can't figure out why people are responding to this loser... There have been far more creative trolls... There isn't even damage control with this guy, he's a damn clown. Please stop quoting him. Stop responding to him. He's a waste of Oxygen and Bandwidth...

[eltito]

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

Plausible deniability ftw!

As someone pointed out above, of course, aways consult your attorney.

That said, I'm not sure it's just plausible deniability.  Once this is implemented, Masternodes will simply be denominating funds.  They will no longer be facilitating the actual transfer of funds for purchases between a buyer and a seller.  They are completely bypassed in that regard.

If the United States government gets a hint that a one cent of funds was transferred to any terrorist organization using the Darkcoin network it's lights out.  Plausible deniability doesn't mean a thing when Amazon and every other provider in the United States complies with a court order and shuts down the masternodes.  

I'm not promoting cryptonote coins as they have plenty of their own problems.  But they offer true P2P anonymity that isn't subject to having a masternode network shut down.

I host a couple MNs in Iceland.  I'm not sure they care what the US Gov't thinks.

[camosoul]

A truly anonymous coin will be designed with anonymity from the beginning.

I'm not sure you haven't put your foot right in a great big technical cowpat here. You might know what your talking about and you might not have a clue but I'll give you the benefit of the doubt.

From a software engineering point of view though, integrating functional layers like your suggesting is sometimes a good thing and sometimes a complete disaster because you're creating a coupling that you'll be forced to live with for the rest of the coin's life. You would only ever do that if you were absolutely sure you never wanted to evolve those two layers independently of each other.

On the other hand, keeping them separate (the anonymity layer and the blockchain layer) has some huge advantages. In particular, as we've already seen, it allows the blockchain layer to retain legacy compliance and compatibility with commercial APIs while at the same time liberating the anonymity layer so it has the capacity to evolve rapidly in response to real world use. We've already seen this happening - we've seen how much flexibility there is having the functional layers decoupled.  If you weld them both together, your "stuck". You can't evolve the properties in one without being ball and chained by legacy interfaces in the other.

You say that the RC2 and RC3 forking issues belie a fundamental design problem i.e. the decoupled model. Again, I think you've made a very big mistake here.

I saw it the other way around - i.e. as evidence that something "real" and successful was going on in this project. The forking was nothing. Sure, it made a big splash and as the dev correctly expressed - was "unacceptable" but it does not - as you contend - stem from the decoupling of the anonymity layer from the blockchain layer. It's simple software development - original work being consolidated. If you don't want to see that kind of thing then pick a coin that's going to have the same features in 6 months time as it has today.

So in summary I don't think there's any basis for such a point blank appraisal. I think it's highly superficial, lacking in technical depth and not remotely thought through. In my opinion, DRK has got it right and the others are all heading straight up a cul-de-sac that's going to leave them like beached whales - having a reasonable anonymity model but with no audience.

In addition to all of that, the decoupling principle goes right back to the original Darkcoin mission statements - see section 3 ("Why is this approach the right one") here: https://medium.com/@simon/the-bright-side-of-darkcoin-a923facddc3c

There is a definite need for an implementation that solves the anonymity problem with a decentralized approach and proven technology.

Note the phrase "proven technology". Markets like "proven technology" but they also like leaders, so again the decoupled approach makes sense where the coupled one doesn't. This stuff has all been thought through in far more depth than most 5-second posters on here realise, with due consideration being given to optimising both technical and end-user (or "market") priorities.

Under these circumstances, you can't really blame the devs for sticking to the original "plan" and mission statement.

It was a good one then and it hasn't been bettered.

I love you man...

But, actually it does stem from that decoupling. The trick was finding a way to integrate the proof hash without putting an end to the decoupling. To keep the decoupling alive, but snuff the problem. And Evan pulled it off, instead of the "black and white" way of thinking that these arguments go, he invented a 3rd choice and made it work.

Still decoupled, and the merged nature of the proof hash didn't have to be tossed, and the decoupling didn't have to be tossed. It's a system that can also be extended to future as-of-yet-unthought-of features that might also need to be integrated into the block proof. Who knows what that might be. But the door is now opened...

[JGCMiner]

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

Plausible deniability ftw!

As someone pointed out above, of course, aways consult your attorney.

That said, I'm not sure it's just plausible deniability.  Once this is implemented, Masternodes will simply be denominating funds.  They will no longer be facilitating the actual transfer of funds for purchases between a buyer and a seller.  They are completely bypassed in that regard.

Wait, so in this case there isn't any Coinjoin?  The pre-denominated funds are directly send from A to B without using a masternode?

No Coinjoin mix on the second phase, correct.

Non-denominated funds are sent out automatically to a MN for denomination, then sent back to your wallet (this may or may not involve several MN hops, I haven't spoken to Evan about that for a day or two and he comes up with new ideas every 5 minutes).  

Once back in your wallet, they just sit there, all smug and anonymous until you decide to use them.  There's no real need for a need for a 2nd Coinjoin mix to occur after that.  When you send funds, your wallet automatically selects pre-anonymized denominations and sends them directly to your intended recipient.

I would go so far as to say no Coinjoin at all, right? The denomination step only involves your coins, right?

If this is the final solution then I would say that DRK has moved away from Coinjoin to something better which is of Evan's own invention.

[coins101]

Lamest FUD of any troll.

I still can't figure out why people are responding to this loser... There have been far more creative trolls... There isn't even damage control with this guy, he's a damn clown. Please stop quoting him. Stop responding to him. He's a waste of Oxygen and Bandwidth...

He is a waste of space.

But it never hurts to take the opportunity to remind people of what the point of DRK is all about. Privacy, eCash.

When he said it's lights out for DRK if the US government decides it doesn't like anonymity, I lol'd. It shows even less comprehension of decentralized crypto than I gave him credit for.

[camosoul]

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

Plausible deniability ftw!

As someone pointed out above, of course, aways consult your attorney.

That said, I'm not sure it's just plausible deniability.  Once this is implemented, Masternodes will simply be denominating funds.  They will no longer be facilitating the actual transfer of funds for purchases between a buyer and a seller.  They are completely bypassed in that regard.

Wait, so in this case there isn't any Coinjoin?  The pre-denominated funds are directly send from A to B without using a masternode?

No Coinjoin mix on the second phase, correct.

Non-denominated funds are sent out automatically to a MN for denomination, then sent back to your wallet (this may or may not involve several MN hops, I haven't spoken to Evan about that for a day or two and he comes up with new ideas every 5 minutes).  

Once back in your wallet, they just sit there, all smug and anonymous until you decide to use them.  There's no real need for a need for a 2nd Coinjoin mix to occur after that.  When you send funds, your wallet automatically selects pre-anonymized denominations and sends them directly to your intended recipient.

The only point I'd like to add is that a send of a specific amount stands out. Mix-on-send should still exist just to make all TXes look the same. Peeling off change through multiple hops would be even better. It would take only a few transactions before all TXes looked like change going God knows where... Hidden in plain view, no need to trust a disposed key or encryption of any kind, negligible bloat, blockchain still transparent and audit-able for function by anyone who wants to look at it, you just can't see the people... This is why I went all in on this coin. I didn't know what it would look like, but I knew Evan wanted to keep away from the ideas that were compromising this model pretending to be "better" than something that hadn't even been done yet.

I bet on the logic. Which means precisely dick in cryptos... I just knew it was the right road, even if I was the only one taking it.

[illodin]

If the United States government gets a hint that a one cent of funds was transferred to any terrorist organization using the Darkcoin network it's lights out.

I guess it's lights out for bitcoin!
http://www.coindesk.com/isis-bitcoin-donations-fund-jihadist-movements/

Plausible deniability doesn't mean a thing when Amazon and every other provider in the United States complies with a court order and shuts down the masternodes.

Current DRK masternode distribution by operator: http://drk.poolhash.org/darksend.html

The reason for there being so many on Amazon is that the first step-by-step guide was written using Amazon as an example. This should change when more guides are written. And especially it would change if such a shut down for US based operators should happen. 

I'm not promoting cryptonote coins as they have plenty of their own problems.  But they offer true P2P anonymity that isn't subject to having a masternode network shut down.

But CN coins must have nodes too so the clients can discover the network. They could be taken down as well, or what is it that makes taking down a CN node impossible and a DRK masternode possible?

[thunderdrum]

The Darkcoin solution, development team and community are really on a different level.  Glad to be here.

+1
When i come here at the first time. I have the same feeling. What a GREAT Devteam&Community it is.

And now, i stayed~  

[camosoul]

Lamest FUD of any troll.

I still can't figure out why people are responding to this loser... There have been far more creative trolls... There isn't even damage control with this guy, he's a damn clown. Please stop quoting him. Stop responding to him. He's a waste of Oxygen and Bandwidth...

He is a waste of space.

But it never hurts to take the opportunity to remind people of what the point of DRK is all about. Privacy, eCash.

When he said it's lights out for DRK if the US government decides it doesn't like anonymity, I lol'd. It shows even less comprehension of decentralized crypto than I gave him credit for.

They'd have to stop printing their own cash for this to even make sense. Anyone who says something like that is either a very bad troll unable to hide his trolling intents, or so magically stupid he'll forget to breathe and die on his own very shortly... Since he's still alive, the only remaining conclusion is that he's a shitbag troll.

[Lauda]

Lamest FUD of any troll.

I still can't figure out why people are responding to this loser... There have been far more creative trolls... There isn't even damage control with this guy, he's a damn clown. Please stop quoting him. Stop responding to him. He's a waste of Oxygen and Bandwidth...

Just stop quoting and replying to his lame posts.
Even if you actually design and create a perfect (http://en.wikipedia.org/wiki/Perfection) such people would still find flaws that are not there.

[HinnomTX]

Right.

Also, like I pointed out earlier, this means that Masternodes now have no direct involvement in the actual person to person transaction, so if someone decides to use Darkcoin to so something illegal, there is no reasonable grounds for Masternode owners to be held liable.

As always, consult your attorney etc. etc. because they can make a law for anything. But your logic does seem reasonable.

Another question though. I would be concerned about real time data analysis during step 2 of Darksend+. Can the re-denominated addresses be de-anonymized since their outputs would be spent at the same time? By that I mean not only would my addresses appear in the same block, but the broadcast of the transaction would group my addresses together in time. Is there a countermeasure that can be deployed for this?

Put another way, my group of re-denominated addresses appear at one time on the blockchain. A subset of them appear again as spent at a later time in the blockchain. Is that inconsequential?
 

If you were the only address denominating funds on a single block, perhaps.  But what if the entire network was denominating funds automatically at a scheduled time (or pre-determined block)?

HOT! Even the fees will be worth collecting on that block!