Anonymous Payments: Dash or Bitcoin + Mixers?
Sometimes it is important to maintain not only your personal anonymity, but also the anonymity of your finances. When your money requires anonymity, mistakes are unacceptable.
governments of many countries are effectively working to establish total monitoring and control over the movement of money of both their citizens and citizens of other states. A stereotype is imposed on public opinion: “If someone hides something, it means that he is probably a criminal, evades taxes, sponsors terrorism or is involved in other sins.” In some countries, the use of cash, precious metals, cryptocurrencies, offshore and other instruments that impede financial monitoring automatically leads you to suspicion.
But common sense tells people that the expression “Money loves silence” is not associated with crime, but based on basic household care. No one in his right mind screams about how much money he has in his pocket, does not write everywhere about the amount of his income, and does not show everyone a bank statement with a list of card transactions.
Organizations also try not to advertise the details of their financial activities, do not publish customer lists detailing their orders, because this will at least upset customers and attract detractors (including competitors).
And if citizens of highly developed countries can at least hope that financial surveillance of them is carried out in certain national interests, then in countries with a high level of corruption people are justifiably afraid that their private information is likely to reach people with hostile intentions.
Well, I will not delve into philosophy, but simply state the fact that most people and businesses have a desire (and often a need) to maintain the anonymity of their finances. And the reason for this is not that they are plotting something bad, but because they themselves do not want to become victims of other people's malicious or criminal plans.
Unfortunately, the set of legal tools to maintain financial anonymity is quite limited and inconvenient to use. The appearance in 2009 of the first cryptocurrency (Bitcoin) gave rise to hope among people that they would finally receive fast, convenient and uncontrollable anonymous money. Indeed, promising and revolutionary ideas and technical solutions for that time were laid in the concept of Bitcoin.
Years passed ... Today, in 2015, Bitcoin became the most famous and widespread cryptocurrency, leading both in the number and volume of financial transactions carried out with its help. Unfortunately, these parameters remain one of the few that Bitcoin managed to maintain leadership in the world of cryptocurrencies.
The fact is that since its launch, the Bitcoin network has not undergone any fundamental changes and now remains close to its original technological level (except for some improvements in the client part that do not affect the principles of the network). For example, over the past years nothing has been done to introduce anonymity mechanisms, which contradicts users' expectations, but is fundamentally lobbied by current Bitcoin developers (unfortunately, the unknown creator of Bitcoin has pulled away from its further development).
In my opinion, the reason for “stagnation” is to block the technological development of the Project due to a lack of motivation, management and financing. It is no secret that the main beneficiaries of the Bitcoin project are miners and large investors. Neither one or the other (with rare exceptions) is striving for revolutionary changes, confining itself only to the popularization of the already available stable technology and the hope of increasing the applicability of Bitcoin (including by moving away from the initial "independent" concept towards fulfilling the requirements of various local authorities and organizations )
But back to the topic of anonymity. Yes, Bitcoin is better than a bank account in terms of independence - you can become a member of the system and manage your coins independently of anyone. No one will be able to block or confiscate your funds - this is the fundamental advantage of decentralized cryptocurrencies. But Bitcoin is worse than even a bank account in terms of ensuring anonymity of payments, because the transactions of all users are recorded explicitly in a public database (blockchain) and remain there forever, which makes it possible to track and analyze them directly or using public software.
When making any payment, its size, residual balances and all previous and subsequent transactions of the participants become available to everyone. Until the correspondence between the analyzed address and a specific person is established, this information is abstract in nature. But as soon as interaction with the physical world occurs (for example, the IP address, cashing details, delivery address of the goods, etc.) are fixed, it will be possible to unambiguously trace the entire financial history of a particular person.
Those who want to "confuse a little" the history of their transactions can drive the coins through a sequence of their or others (for example, exchanges, casinos, etc.) addresses. But regardless of the number of such operations, the entire transaction chain is fixed and available for further analysis.
Those who want to get more anonymity can use third-party services that offer mixing Bitcoins (the so-called "Mixers"). Like all other "add-on services" that form the current infrastructure of Bitcoin and its advanced functionality, they primarily serve the interests of their owners. By transferring your Bitcoins and trusting their anonymity to third parties or individuals, you must be aware of all the risks involved. And blocking accounts of “inconvenient users” is not the worst case scenario for users of Bitcoin “improvers” services.
Well, I will not go into the analysis, I will only say that at the moment, Bitcoin is not the best either in terms of speed of payments, nor in terms of ensuring anonymity, nor in terms of the dynamics of improvements. Many of the important functions of Bitcoin (including the anonymity of transactions) are performed not due to the capabilities of Bitcoin itself, but through the use of third-party (usually centralized) “add-on” services that introduce uncertainty and risks into the overall architecture of the Project.
Darkcoin is a cryptocurrency created in early 2014 based on the source code of Bitcoin. Using the best of Bitcoin technology, the Darkcoin team aimed to move on and upgrade the cryptocurrency technology to the level of "ideal electronic money." A key role in this is given to ensuring real anonymity of payments. Over the past year, Darkcoin has undergone a number of revolutionary changes and has gone far ahead by repeatedly modernizing the key principles of its work.
Here are the key tasks that are already implemented in Darkcoin:
- Independence and lack of control. Individual governments, services, developers, users, attacks, etc. cannot have a detrimental effect on the functioning of the Project, including on ensuring anonymity.
Robust anonymity technology. Only proven cryptography technologies are used. Anonymization mechanisms are implemented at the protocol level, which protects the system from external influences and risks.
- Own decentralized technology platform. A network of more than 2200 Masternodes, which provides logical and physical protection against possible attacks, on the basis of which a unique functional is implemented (primarily in the field of anonymity).
- User convenience. The recent introduction of InstantX technology has reduced the time of guaranteed payments crediting in the Darkcoin network to 5 seconds. The ability to increase security while improving usability demonstrates the unique features of Darkcoin.
Skip the listing of all features and a detailed analysis of the benefits. I only say that today it is the most popular anonymous cryptocurrency aimed at ensuring real privacy. There are a number of other cryptocurrencies, mostly in the “theoretical stage”, that offer alternative approaches to ensuring anonymity (most of these projects remain at the level of theories and promises). Their analysis does not fit the scope of this article. I can only say that the Darkcoin team constantly monitors all the latest technologies in the field of ensuring anonymity. If something really worthwhile and practically applicable is discovered, Darkcoin quickly integrates such solutions into its code, while continuing to provide its users with the best level of financial anonymity.
The general principle of any methods of anonymizing cryptocurrency transactions is as follows: at one stage of the transfer of money, a collective transaction (or group of transactions) is made, in which several payers participate at once. An ideal anonymization mechanism should hide the unambiguous correspondence of coins and their senders. As a result, for the payee and for outside observers, the sender of the funds becomes uncertain.
The uncertainty lies in the fact that the analyzed money could be sent with equal probability by any of the participants in the collective transaction. Accordingly, the larger the number of payers participating in a collective transaction, the less likely it is to “correctly guess” their actual sender. And to unequivocally prove compliance - it becomes completely impossible. However, the practical implementation of the described ideal concept can sometimes contain weaknesses and hidden vulnerabilities.
Security experts know that usability and safety are usually at different poles. Ensuring anonymity is an important and sought-after feature, but inevitably you have to pay for it with some inconvenience. It is important to achieve a compromise in which the maximum level of anonymity is achieved with a minimum level of associated costs. Few people will find it useful to have theoretical absolute anonymity, which will be absolutely inconvenient or even impossible to use in real life.
If someone needs absolute protection from the NSA, the FSB and from similar structures, then they should study the latest facts that spy bookmarks are already being implemented on hard drives, SIM cards and other components of the basic “iron” level, this makes all systems built on their basis are vulnerable, including software products for ensuring security and anonymity. It follows that if someone seriously intends to oppose himself to the NSA, then he will not be saved by the “ideal cryptocurrency”, but he will need a full range of modern hacker tools and, ideally, a bunker in the mountains of Afghanistan.
Darkcoin was created as an easy-to-use and effective cryptocurrency for mass use, which will provide scalable and easily integrated anonymous payments for millions of ordinary citizens, and not a “tricked out” army-level cryptosystem for “super-spies”. Darkcoin managed to realize this task, and now it is being further improved, implemented and popularized.
Summarize. Bitcoin does not currently provide its users with real anonymity, and third-party services (Bitcoin- “Mixers”) allow anonymity with only a few reservations. Darkcoin cryptocurrency has internal (at the network protocol level) mechanisms of advanced anonymity.
Let's skip the technical details of both the already involved Darkcoin technologies, as well as additional methods that Darkcoin can integrate later - this is a fairly extensive near-scientific field. Those who wish can explore these topics in depth on their own using the links at the end of the article. I will consider only the practical side of the matter and compare: what users of Darkcoin, Bitcoin and Bitcoin-Mixers get today.
MAIN DIFFERENCES: BITCOIN (B), BITCOIN + MIXER (BM) AND DARCOKOIN (D).
B : None.
BM: “CoinJoin” is a simplified technology with a number of limitations. Mixing of funds received by the mixer occurs only with a narrow circle of users of a particular Mixer, resorting to its services at a particular point in time. This limits the real depth of anonymization (all the more so because users can’t control the actual mixing depth as stated).
D : "DarkSend +" - Pre-denomination and anonymization "in the background" at the protocol level. Collective transactions can be attended by any users of the Darkcoin network, which allows you to quickly perform anonymization of arbitrary depth (determined by the number of mixing rounds) and volume (quick selection of suitable partners with the right number of coins).
B : Conveniently enough.
BM : Bitcoins are sent to the Mixer. Anonymization is controlled through the interfaces of third-party resources (website, browser plug-in, ...) that connect you to a remote Mixer server.
D : Simple management of balances, transfers, degree of anonymization, etc. from a single interface of your local wallet. Payment of previously anonymized Darkcoins is made directly to the recipient.
B : Usually - up to 10 minutes, but in some cases it may be longer.
BM: Double Bitcoin transaction time (sending money to the Mixer + receiving it back) plus the time to conduct the anonymization itself. The greater the depth of anonymization and the amount of mixes required, the more time it will take to select the right number of suitable mixing partners.
D : Approximately 5 seconds, using InstantX technology, if you use pre-denominated and anonymized in the "background" mode. Safety of
B : Money is safe, since anonymization is not performed.
BM : At the time of anonymization, the money should be given to a third party (Mixer). They no longer belong to you until the mixing operation is successfully completed by the Mixer.
D: Money is always safe, because anonymization takes place in the form of a collective transaction, coordinated and protected by the work of the decentralized Darkcoin Masternode network at the protocol level. It is technically impossible to steal money.
Decentralization ( non- control)
B : “Transparent” Bitcoin payments are decentralized, but anonymity is not provided.
BM : The anonymization of funds occurs on the remote servers of the centralized Mixer controlled by the owners. It is possible to monitor and control the operations performed by both the Mixer operators themselves and those who can access their servers.
D: Payments and anonymization mechanisms are distributed, made using a decentralized Masternode network. During anonymization, an arbitrary sequence of Masternodes is selected, so it is almost impossible to trace the chain of all rounds of anonymization even if detractors manage to take control of a significant part of the network. Cryptocurrency architecture employs mechanisms that reliably protect Darkcoin from attempts to upset the decentralization and anonymity of the network.
Availability of source code
B : The source code of Bitcoin is open.
BM: The server part of the Mixer services is under the sole control of their owners (or under the control of those who were able to access their server). Users cannot observe or control the algorithms of the server platform of the mixers, and arbitrary code can be executed there, including aimed at maintaining logs and deanonymizing user operations.
D : The source code of both the client part (wallets) and the network infrastructure (Masternode) is published for general control over the lack of hidden functions. This also applies to the transparency of anonymization mechanisms. Using the source code, users can independently compile the Wallet program, which will guarantee that there are no undocumented features.
Protection from mixing partners (Sybil Attack)
B : Not relevant.
BM : The mixers clientele is a fairly narrow circle of customers, and the mixing itself takes place in a single center. Therefore, if someone wants to conduct an attack of this kind (mix their coins) on Mixer clients, then the attack will be successful with a high probability.
D: Any anonymization operation involves the creation of uncertainty by inviting additional participants in a collective transaction. However, if some of the mixing participants are “dummy players” who want to deanonymize “common transaction partners,” then the level of uncertainty (and with it anonymity) is reduced. For Darkcoin, this situation is not too dangerous, since there are always a large number of users on the network, as well as a large number of possible mixing points (Masternodes), which makes it unlikely that a similar attack will occur. As an added measure of protection, you can increase the number of mixing rounds.
There are a number of other differences that are beyond the scope of this review. You can study them yourself using the links at the end of the article.
If you value the inviolability of your personal life, then you should take care of the reliable preservation of the anonymity of your financial transactions. Darkcoin cryptocurrency today is one of the most effective solutions to this problem.
In addition to its direct purpose (the best cryptocurrency), Darkcoin can also be used as the "best Mixer in the world" for Bitcoin, Dollar, Euro, Yuan and other currencies. Calling Darkcoin “the best Mixer in the world” allows me both its technological superiority in the field of anonymity (the main features of which I described in this article) and the largest user base in the world, ready to mix their coins with yours.
Darkcoin's vast client base allows you to randomly and repeatedly mix funds randomly, which guarantees the highest possible level of uncertainty. And in practice, this opportunity has an even greater impact on ensuring anonymity than all those technologies that are behind the Darkcoin cryptocurrency.
So, you can anonymize your Bitcoins with all the features of Darkcoin by exchanging them on the BTC-DRK exchange. After successfully anonymized Darkcoins, you can safely use them or exchange them back for Bitcoins or other currencies. Your time and money expenses in this case will be insignificant compared to using traditional Mixer services, and the safety and quality of anonymization will be much better.
Download the wallet program on the website www.darkcoin.io right now and in just a few minutes you will be able to appreciate all the advantages of advanced cryptographic technologies that will provide you real financial security and anonymity.
PS I ask readers to bring this information to everyone who may be interested in it. Financial anonymity is needed not only for members of the cryptocurrency community, but also for all people who are striving to protect their right to freedom and privacy.
* Some provisions of the publication may be controversial and do not take into account all current changes. For example, the DarkWallet project went beyond the traditional Bitcoin Mixers, implementing a number of improvements.
* From March 25, 2015 Darkcoin project is officially renamed to DASH. In order to more effectively enter the wide market and implement new global plans, the Darkcoin project will stop using its “dark” name, which repels most potential users (including DarkMarkets, by the way).
General information on what Dash is: