Anonymous payments: Dash or Bitcoin + Mixers?

Sometimes it is important to preserve not only your personal anonymity, but also the anonymity of your finances. When your money requires anonymity - mistakes are unacceptable.

NEED
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The governments of many countries are working effectively to establish a 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, then surely he is a criminal, evades paying taxes, sponsors terrorism or is involved in other sins.” In some countries, the use of cash, precious metals, cryptocurrency, offshore and other tools that impede financial monitoring, automatically suspicious of you.

But common sense tells people that the expression “Money loves silence” is not connected with crime, but is based on elemental household caution. No one in his right mind shouts about how much money he has in his pocket, writes everywhere about the amount of his income and does not flaunt 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Organizations also try not to advertise the details of their financial activities, do not publish customer lists detailing their orders, because this will at least upset customers and attract detractors (including competitors).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 they are financially monitored for certain national interests, then in countries with a high level of corruption, people are justifiably afraid that their private information is highly likely to reach people with hostile intentions.

Well, I will not delve into the philosophy, but simply stating the fact that most people and businesses have a desire (and often a necessity) to preserve 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 someone else’s malicious or criminal plans.




BITKOIN

Unfortunately, the range of legal means for maintaining financial anonymity is rather limited and inconvenient to use. The emergence in 2009 of the first cryptocurrency (Bitcoin) gave birth to people in the hope that they will finally receive fast, convenient and anonymous money that no one can control. Indeed, the concept of Bitcoin was promising and revolutionary ideas for the time and technical solutions.

Years have passed ... Today, in 2015, Bitcoin has become the most famous and popular cryptocurrency, leading both in the number and volume of financial transactions conducted with it. Unfortunately, these parameters remain one of the few by which Bitcoin managed to maintain its 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 (short of some client-side improvements 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 user expectations, but is fundamentally lobbied by current Bitcoin developers (unfortunately, the unknown Bitcoin creator himself has moved away from its further development).

In my opinion, the reason for the "stagnation" is to block the technological development of the Project due to lack of motivation, management and funding. It is no secret that the main beneficiaries of the Bitcoin project are miners and large investors. Neither those, nor others (with rare exceptions) strive for revolutionary changes, limiting themselves only to popularizing the existing stable technology and hoping that Bitcoin's applicability will grow (including by avoiding the original “independent” concept to meet 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 regardless of anyone. No one can block or confiscate your funds - this is the principal advantage of decentralized cryptocurrencies. But Bitcoin is even worse than a bank account in terms of ensuring anonymity of payments, because all users' transactions are recorded explicitly in a publicly accessible database (blockchain) and remain there forever, which makes it possible to monitor and analyze them directly or using publicly available software.

When making any payment, its size, residual balances and all previous and subsequent transactions of participants become available to everyone. Until then, until a correspondence is established between the address being analyzed and a specific person, this information is abstract. But as soon as the interaction with the physical world takes place (for example, the IP address, cashing details, delivery address, etc.) will be fixed, it will be possible to 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 own or others (for example, stock exchanges, casinos, etc.) addresses. But regardless of the number of such operations, the entire chain of transactions is recorded and available for subsequent analysis.

Those who want greater anonymity can use third-party services that offer Bitcoin mixing (the so-called "Mixers"). Like all other “add-on services” that form the current Bitcoin infrastructure and its advanced functionality, they primarily serve the interests of their respective owners. When transferring your Bitcoins and trusting their anonymity to third parties or individuals, you should be aware of all the risks involved. And blocking accounts of “inconvenient users” is not the worst possible scenario for users of the Bitcoin “improvers” services.

Well, I will not delve into the analysis, let me just say that currently Bitcoin is not the best in terms of speed of payments, or in terms of ensuring anonymity, or in terms of the dynamics of improvements. A lot of important Bitcoin functions (this concerns anonymity of transactions including) are performed not by the capabilities of Bitcoin itself, but by using third-party (usually centralized) services- “add-ons”, contributing uncertainty and risks to the overall architecture of the Project.

Darkcoin

Darkcoin is a cryptocurrency created in early 2014 based on the Bitcoin source code. Using the best of Bitcoin technology, the Darkcoin team set itself the goal of moving on and upgrading the cryptocurrency technology to the level of “ideal electronic money”. A key role in this is assigned to ensure the real anonymity of payments. Over the past year, Darkcoin has undergone a number of revolutionary changes and has gone far ahead, repeatedly modernizing the key principles of his 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.
  Reliable anonymity technology. Only proven cryptographic technology is used. Anonymization mechanisms are implemented at the protocol level, which protects the system from outside influences and risks.
• Own decentralized technology platform. A network of more than 2,200 Masternodes, providing logical and physical protection against possible attacks, on the basis of which unique and unique functionality is implemented (primarily in the area of ​​anonymity).
• Convenience of users. The recent introduction of InstantX technology has reduced the time required to deposit payments in the Darkcoin network to 5 seconds. The ability to increase security while improving usability demonstrates Darkcoin’s unique features.

Skip the listing of all the features and a detailed analysis of the benefits. I only state that today it is the most popular anonymous cryptocurrency, aimed at providing real privacy. There are a number of other cryptocurrencies, mostly in the “theoretical stage”, which offer alternative approaches to anonymity (most of these projects remain at the level of theories and promises). Their analysis does not fit into the framework of this article. Let me just say that the team Darkcoin constantly monitors all the new technologies in the field of anonymity. If something really worthwhile and practically applicable is found, Darkcoin quickly integrates such solutions into its code, while continuing to provide its users with the best level of financial anonymity.

"PERFECT" ANONIMIZATION

The general principle of any ways to anonymize cryptocurrency transactions is as follows: at one of the stages of transferring money, a collective transaction (or group of transactions) is carried out, in which several payers participate. The ideal anonymization mechanism should hide the unambiguous correspondence of coins and their senders. As a result, the sender of the funds becomes uncertain for the payee and for outside observers.

The uncertainty is that the money analyzed could be sent with equal probability by any of the participants in a collective transaction. Accordingly, the greater the number of payers involved in the collective transaction - the less likely it is to “correctly guess” their actual sender. And it is impossible to unequivocally prove compliance. However, the practical implementation of the described ideal concept can sometimes contain weaknesses and hidden vulnerabilities.

Security experts know that usability and security are usually at different poles. Ensuring anonymity is an important and demanded function, but it will inevitably 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. Very few people will benefit from 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 spyware “bookmarks” are being introduced already on hard drives, SIM cards and other components of the basic “iron” level, it does all systems based on them are vulnerable, including security and anonymity software products. It follows from this, if someone seriously intends to oppose himself to the NSA, then the “ideal cryptocurrency” will not save him, but a full range of modern hacker tools and ideally a bunker in the mountains of Afghanistan will be required.

Darkcoin was created as an easy-to-use and effective cryptocurrency for mass use, which will provide scalable and easily integrable anonymous payments for millions of ordinary citizens, rather than a “tricked” army-level closed cryptosystem for “super-spies”. Darkcoin was able to accomplish this task, and now he is further improving, implementing and popularizing.

Summarize. Bitcoin does not currently provide its users with real anonymity, and third-party services (Bitcoin- "Mixers") allow us to achieve anonymity with only a few reservations. Darkcoin cryptocurrency has internal (at the network protocol level) advanced anonymity mechanisms.

Let's skip the technical details of both the Darkcoin technologies already involved, and additional methods that Darkcoin can integrate later - this is a rather extensive area of ​​near science. Those interested can learn more about these topics 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 the users of Darkcoin, Bitcoin and Bitcoin-Mixers are currently receiving.

MAIN DIFFERENCES: BITKOIN (B), BITKOIN + MIXER (BM) AND DARCKOIN (D).

Anonymization technology
B : None.
BM : “CoinJoin” is a simplified technology with a number of limitations. Mixing of funds received by a mixer occurs only with a narrow circle of users of a particular Mixer, who resort to its services at a specific point in time. This limits the actual depth of anonymization (especially since users cannot control the correspondence of the actual depth of mixing to the declared one).
D : “DarkSend +” - Preliminary denomination and anonymization “in the background” at the protocol level. Any Darkcoin network users can take part in collective transactions, 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 required number of coins).

Convenience
B : Conveniently enough.
BM : Bitcoins go to Mixer. Anonymization management is performed through interfaces of third-party resources (website, browser plugin, ...), which connect you to a remote Mixer server.
D : Simple management of balances, transfers, degree of anonymization, etc. from the single interface of your local wallet. Payment of pre-anonymized Darkcoins is made directly to the recipient.

Transaction rate
B : Usually - up to 10 minutes, but in some cases it can be longer.
BM : Double Bitcoin transaction time (sending money to Mixer + getting it back) plus time to conduct the anonymization itself. The greater the required depth of anonymization and the number of mixed tools, the longer it will take to select the desired number of suitable mixing partners.
D : Approximately 5 seconds, using InstantX technology, if pre-denominated and anonymized means are used in the “background” mode.

Safety of funds
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 do not 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 Masternod Darkcoin decentralized network at the protocol level. To steal money is technically impossible.

Decentralization (uncontrolled)
B : “Transparent” Bitcoin payments are decentralized, but anonymity is not provided.
BM : Anonymization of funds occurs on 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 get access to their servers.
D : Payments and anonymization mechanisms are distributed, made using the masterno network. When anonymizing, an arbitrary Masternode sequence is chosen, so it is almost impossible to track the chain of all rounds of anonymization, even if the detractors manage to take control over a significant part of the network. The cryptocurrency architecture involves mechanisms that reliably protect Darkcoin from attempts to disrupt the decentralization and anonymity of the network.

Source Code Availability
B : Bitcoin source code 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 mixers, and arbitrary code can be executed there, aimed, among other things, at logging and de-anonymization of the operations performed by users.
D : The source code of both the client part (wallets) and the network infrastructure (Masternod) is published for general control over the absence of hidden functions. This also applies to the transparency of the anonymization mechanisms. With the help of the source code, users can independently compile the Wallet program, which is guaranteed to be missing undocumented features.

Protection from mixing partners (Sybil Attack)
B : Not relevant.
BM : The mixers' clientele is a rather narrow circle of clients, and the mixing itself takes place in a single center. Therefore, if someone wants to carry out an attack of this kind (mix their coins) on the Mixer clients, the attack will be successful with a high probability.
D : Any anonymization operation involves creating uncertainty by inviting additional participants in a collective transaction. However, if some of the participants in the mix are “dummy players” who wish to de-anonymize “common transaction partners,” then the level of uncertainty (and anonymity with it) decreases. For Darkcoin, this situation is not too dangerous, as there are always both a large number of users and a large number of possible mixing points (Masternod) on the network, which makes it unlikely to be faced with a similar attack. As an additional degree of protection - you can increase the number of rounds of mixing.

Other differences
There are a number of other differences that are beyond the scope of this review. You can independently study them using the links at the end of the article.

CONCLUSION

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. I can call Darkcoin “the best Mixer in the world” as its technological superiority in the field of anonymity (the main features of which I described in this article) and the world's largest user base, ready to mix their coins with yours.

Darkcoin's extensive client base allows you to randomly mix funds randomly and repeatedly, which guarantees the highest possible level of uncertainty. And in practice, this possibility 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. Successfully anonymized Darkcoins, you can then safely use or exchange back to Bitcoins or other currencies. Your time and money in this case will be insignificant compared to the use of traditional services-mixers, and the security and quality of anonymization will be much better.

Download the wallet program on www.darkcoin.io right now and within a few minutes you will be able to appreciate all the advantages of advanced cryptographic technologies that will provide you with real financial security and anonymity.

PS I ask readers to bring this information to all who may be interested in it. Financial anonymity is needed not only to members of the cryptocurrency community, but also to all people seeking to protect their right to freedom and privacy.

ADDITIONAL MATERIALS
wiki.darkcoin.eu/wiki/Main_Page
cdn.anonymousbitcoinbook.com/darkcoin/darksend-paper/Atlas_Darkse-Analysis-v002.pdf
www.coinjoinsudoku.com/advisory
www.wi.uni-muenster.de/sites/default/files/public/department/itsecurity/mbc13/mbc13-moeser-paper.pdf
arxiv.org/pdf/1405.7418v3.pdf
eprint.iacr.org/2012/584.pdf

* Some of the provisions of the publication may be controversial and not take into account all current changes. For example, the DarkWallet project went beyond traditional Bitcoin-Mixers, implementing a number of improvements.

* From March 25, 2015 Darkcoin project is officially renamed to DASH. In order to more effectively reach the wider 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 about what Dash is: