The Science, Health, and Technology Room
http://www.wired.com/2014/05/darkcoin-is-booming/
Someone out there likes anonymous money.
In only a month, the little-known bitcoin alternative known as Darkcoin has rocketed nearly tenfold in value–from around 75 cents a coin to almost seven dollars. Its selling point: Darkcoin offers far greater anonymity than bitcoin, mixing up users’ transactions so that it’s incredibly difficult to trace a payment to a person. And though few have yet to accept that more-anonymous coin for actual goods and services, the promise of Darkcoin’s privacy features seems to have sparked a miniature boom. It’s one of the fastest growing among the wave of cryptocurrencies that’s followed bitcoin’s success, with the total value of its combined coins topping out at nearly $30 million.
Darkcoin, supporters argue, serves a real privacy need. Despite its reputation for being more anonymous than traditional money, the bitcoin network actually allows anyone to see every transaction on a public accounting ledger known as the blockchain. Users often have to take extra steps, like mixing their coins in a “laundry” service, to prevent those addresses from being tied to their identity by any government or corporation that wants to snoop.
Darkcoin adds an extra layer of privacy by automatically combining any transaction its users make with those of two other users–a feature it calls Darksend–so that anyone analyzing the blockchain has a harder time figuring out where a particular user’s money ended up. “A large community believes that the way bitcoin’s blockchain is designed is a problem,” says Evan Duffield, the 32-year old Arizona-based software developer who launched Darkcoin in January. “Darkcoin has this anonymity aspect to it, which is attractive to a lot of people.”
Darkcoin’s exchange rate with the dollar and market cap over the last month. Credit: Coinmarketcap.com
Darkcoin’s uncanny growth, of course, may also be fueled by speculators who see an opportunity to jump on a hot commodity. And given how wildly it’s a appreciated in its short life, there’s no guarantee it won’t crash just as fast.
But Darkcoin’s price increases may also be linked to real changes in its features, says Kristov Atlas, a bitcoin consultant and Darkcoin fan. He argues that its value comes in part from its unique properties as a payment system, not just as an investment vehicle. The currency’s first big price jump occurred in late April, for instance, when its Darksend privacy trick was initially switched on for real transactions. “It’s not purely a speculative bubble,” Atlas says. “There’s some solid indications the market price is currently based on the fundamental value of the coin.”
Darkcoin’s price may in fact be “manipulated” by investors, says Allen Price, a trader in the bitcoin alternatives known as “altcoins.” But he says it’s already outlasted his expectation that its price growth was caused by a pump-and-dump scam. “I had sort of smugly stood to the side waiting for the big, inevitable crash with an ‘I told you so’ ready,” says Price. “But no crash ever really came, and it’s been kind of an ongoing success for investors.”
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Originally Posted by Spectre
