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Darkcoin
Darkcoin official logo.png
Official Darkcoin logo
Date of introduction18 January 2014; 6 years ago (2014-01-18)
User(s)International
InflationEstimated 22 million coins maximum, with a 7% decrease in the number of coins generated per year
SymbolDRK
PluralDarkcoin, Darkcoins

Darkcoin is an open source peer-to-peer cryptocurrency that uses a system called Darksend to add privacy to transactions.[1]

Darkcoin uses a chained hashing algorithm approach called X11 for the proof-of-work. Instead of using the SHA-256 (from well-known Secure Hash Algorithm family) or scrypt it uses 11 rounds of different hashing functions.[2]

With chained hashing, high end CPUs give an average return similar to that of GPUs. Another side effect of the algorithm is that GPUs run at about 30% less electrical power than scrypt and 30% to 50% cooler, putting less stress on the computing setup and ensuring lower energy bills for miners.[3]

Overview

Darksend

Masternode count by country (as of September 2014)

Darksend is a coin-mixing service originally based on CoinJoin. Later iterations used a more advanced method of pre-mixing denominations built into the user's wallet.

In its current implementation it adds privacy to transactions by combining identical inputs from multiple users into a single transaction with several outputs. Due to the identical inputs, transactions cannot be directly traced, obfuscating the flow of funds.

Masternodes

Darksend's mixing is performed by Masternodes, servers operating on a decentralized volunteer network which have the responsibility of signing the transactions. For each round of Darksend, the user selects two to eight (or even more) rounds of mixing which vary the degree of anonymity achieved. Random Masternodes are then elected to perform the coin mixing. Masternodes are trust-less, in the sense that they cannot steal user coins, and the combination of multiple Masternodes ensures that no single node has full knowledge of both inputs and outputs in the transaction process.

To avoid a "bad actor" scenario, in which many Masternodes are operated by an adversary who wants to de-anonymize transactions, a deterrent has been put in place in which 1000 Darkcoins are required to own and operate a Masternode.[4] As an incentive for operating a Masternode, chosen nodes earn 20% of the mining rewards.

X11

X11 is a widely used hashing algorithm created by Darkcoin core developer Evan Duffield. X11’s chained hashing algorithm approach utilizes a sequence of eleven scientific hashing algorithms for the proof-of-work. This is so that the processing distribution is fair and coins will be distributed in much the same way Bitcoin’s were originally.

With chained hashing, high end CPUs give an average return similar to that of GPUs. An added benefit of the algorithm is that GPUs require approximately 30% less wattage and run 30-50% cooler than they do with scrypt.[5]

Dark Gravity Wave (DGW)

Dark Gravity Wave (DGW) is a widely used mining difficulty adjustment algorithm created by Darkcoin core developer Evan Duffield to address flaws in Kimoto’s Gravity Well. It uses multiple exponential moving averages and a simple moving average to smoothly adjust the difficulty, which is re-targeted every block. The block reward is not adjusted strictly by block number, but instead uses a formula controlled by Moore's law: 2222222/((Difficulty+2600)/9)2.[6][7]

History

Darkcoin was originally released as XCoin (XCO) on January 18, 2014.

I discovered Bitcoin in mid 2010 and was obsessed ever since. After a couple of years in 2012 I started really thinking about how to add anonymity to Bitcoin. I came up with maybe 10 ways of doing this, but I soon realized that Bitcoin would never add my code. The developers really want the core protocol to stay the same for the most part and everything else to be implemented on the top of it. This was the birth of the concept of Darkcoin. I implemented X11 in a weekend and found it worked pretty well and it would give a completely fair start to the currency. What I really was aiming for with X11 is a similar development curve where miners would fight to create small advantages much like the early start of Bitcoin. I think this a requirement to create a healthy ecosystem.

Evan Duffield, March 2014 [8]

References

  1. Greenberg, Andy. Bitcoin's nefarious cousin Darkcoin is booming Wired, San Francisco. 22 May 2014
  2. Bentley, Guy. Darkcoin: The cryptocurrency putting privacy first, City AM, London. 12 May 2014
  3. Duffield, Evan; Hagan, Kyle (18 March 2014) (PDF). Darkcoin: Peer-to-Peer CryptoCurrency with Anonymous Blockchain Transactions and an Improved Proof-of-Work System. Self-published. http://www.darkcoin.io/downloads/DarkcoinWhitepaper.pdf. 
  4. "DarkSend". Darkcoin Wiki. Retrieved 29 June 2014.
  5. X11 chained hashed algorithm darkcoin.io
  6. Dark Gravity Wave darkcoin.io
  7. How Is Darkcoin Mining Unique? coinbrief.net. Retrieved December 30, 2014.
  8. Duffield, Evan. "The birth of Darkcoin". https://darkcointalk.org. External link in |website= (help)

External links