Dark Wallet

The Silk Road became the first widely successful online market operating solely on cryptocurrency, with a record for providing otherwise unobtainable items. Whether illegal intoxicants, the rising possibilities involving gambling, or illicit materials of any nature, the online black market has the capacity to enter into every crevice of our society. The Silk Road utilized the users’ wallet, along with a mixer, a reputation system, private messages, seller pages, and arbitrators. Bitcoin is the primary cryptocurrency used in such online transactions, and though it is private, features such as an online public ledger may cause some who want to remain entirely invisible to be wary. A group of coders, known as unSystem, released Dark Wallet on May 1st, 2014. Dark Wallet is an application designed to completely shroud the identities and activities of it’s users, in a way that is attempting to provide Bitcoin users with the kind of anonymity Darkcoin’s Darksend provides to Darkcoin users.

The program seeks to eliminate government regulation that will rely on tying specific bitcoins to an individual through their wallet. Through complex encryption, and the mixing of user payments into an untraceable wad, it seeks to make online capital completely untraceable. This has the potential to ignite black markets such as the Silk Road. More generally, their goal is to provide encrypted tools to the masses and open up a new range of trade possibilities.

Architecture

Dark Wallet uses libbitcoin, another project of the unSystem team, as its Bitcoin standard. It has been under development since May 2011. Libbitcoin provides asynchronous code that serves as a foundation for several other projects. The project claims to be primarily interested in Satoshi’s original protocol, with the goal of creating an extendable, scaleable, flexible architecture that allows Bitcoin to be highly configurable. This is all in accordance with the team’s focus on privacy along with the growth of Bitcoin by increasing flexibility and keeping the entire system as decentralized as possible. Dark Wallet also uses Obelisk, a blockchain query. It is also scaleable and based on financial applications. Obelisk also has an entirely Python based client and a library, that will allow for easy porting to multiple platform, including Android, Windows, and Mac. The team is also working on Javascript libraries for further spread of Dark Wallet, along with plugins to allow web services to access similar cryptographical technologies. To hide transactions, Broadcaster, a third party proxy, broadcasts transactions by mixing them with other wallet transactions. It also has the capacity to have an adjustable speed-to-discovery fee option.

The procedure used to propagate transactions is called Coin Join. By removing the assumption that the person on the receiving end, from A to B, is the same as the person receiving a transaction’s funds, from C to D, then B and D can be confused just as A and C can be confused, thus creating an anonymous series of transactions between the four people. Each signature in a multisignature transaction becomes independent. This allows Bitcoin users to choose a number of inputs to use, along with a number of outputs to receive funds. Then each transaction can be independently signed, and their signatures merged. However, it won’t be verified until each signature is provided. Each of the keys associated with the multikey would be used for community verification, and also to mask the identity of the singular owner of the Bitcoin. Users can refuse to sign a transaction that they see issue with. Coin Join would be used when multiple people are purchasing from a certain area, or sending funds to a singular account, so the two or more users would collaborate for privacy and to make the load on the network easier. The joined transactions is indistinguishable from a normal transaction, if this system became widespread, even those who didn’t use Coin Join would have their privacy increased as input co-joining will not be very strong evidence of control over a wallet. Coin Join is possible without altering any of Bitcoin’s fundamental code.

Effects on Bitcoin Price

By fueling directly into the black market and increasing security, Dark Wallet has the potential to raise Bitcoin price significantly. Increasing security, thereby increasing comfort, would attract individuals in search of otherwise unobtainable goods, or who intend to keep their financial transactions secret. This causes them to purchase more Bitcoin, at higher prices. The entire value of Bitcoin would continue to rise, causing further investment by those debating involvement with Bitcoin. This would draw even more attention to Dark Wallet, and potentially create a subtle cycle that would regularly assist in rising Bitcoin prices.

Alpha 4 Version

Released on June 13th, 2014, the Alpha 4 version of Dark Wallet is aimed at delivering multisignature automation, so that multikey manual signing is unneeded. The new development ends the previous hassle of having to copy-paste odd scripts in order for the multisignaure signing to go through. The basic features of Dark Wallet are now in place, therefore development has progressed to a stage where security, stabilization, and user friendliness have become the focus of development. The lobby pairing mechanics opened the door, so that multisignature signings can be automatically sent to other users, also allowing the signatures to be propagated to other fund members of a specific wallet. Now, when funds are created, they are also sent to paired owners. These peers are notified, so that they may accept the funds, allowing the wallet importation to take place. The spent funds are then propagated to mask them, peers can sign the funds, and the signatures are propagated. When enough signatures are received by a certain peer, they will broadcast the transaction, and propagation is stopped, as the funds have been successfully transferred secretly. The alpha 4 release took longer than expected due to the development of the unSystem forums, and the translation of the unSystem wiki pages into Farsi and Spanish. The beta is intended to arrive soon, though much work needs to be done.

The developers encourage testers to use testnet coins, and not real Bitcoins, with Dark Wallet, until the system is fully secured, and thoroughly tested.

Full release notes are available here.