I’m pretty impressed that one of the creators of Dark Wallet was the guy who created the first (working) gun using a 3D printer. From Wired:
…collective of politically radical coders that calls itself unSystem plans to release the first version of Dark Wallet: a bitcoin application designed to protect its users’ identities far more strongly than the partial privacy protections bitcoin offers in its current form. If the program works as promised, it could neuter impending bitcoin regulations that seek to tie individuals’ identities to bitcoin ownership. By encrypting and mixing together its users’ payments, Dark Wallet seeks to enable practically untraceable flows of money online that add new fuel to the Web’s burgeoning black markets.
…Its central tool is a technique called CoinJoin: Every time a user spends bitcoins, his or her transaction is combined with that of another user chosen at random who’s making a payment around the same time. If, say, Alice is buying alpaca socks from an online sock seller and Bob is buying LSD on the Silk Road, Dark Wallet will combine their transactions so that the blockchain records only a single movement of funds. The bitcoins simultaneously leave Alice’s and Bob’s addresses and are paid to the sock seller and the Silk Road. The negotiation of that multi-party transaction is encrypted, so no eavesdropper on the network can easily determine whose coins went where. To mix their coins further, users can also run CoinJoin on their bitcoins when they’re not making a real payment, instead sending them to another address they own.
…Any user can ask Dark Wallet to generate a stealth address along with a secret key and then publish the stealth address online as his or her bitcoin receiving address. When another Dark Wallet user sends payment to that address, Dark Wallet is programmed to instead send the coins to another address that represents a random encryption of the stealth address. The recipient’s Dark Wallet client then scans the blockchain for any address it can decrypt with the user’s secret key, finds the stealth payment, and claims it for the user.
Slowly and surely a Dark Web is emerging, one that is so encrypted and anonymous that authorities cannot monitor or control it. Eventually it might just be left alone, a modern-day Wild West. Caveat Emptor, anyone who goes there!
UPDATE: Decent article about the creators of Dark Wallet (and where they are hiding) at Wired.
