Dark Wallet Rising from the Trenches of Alpha Testing

As previouslyreported by the CoinTelegraph, DarkWallet is an ambitious project that is aiming to provide a higherlevel of anonymity for users and change the way you look at privacy. It haseven been named by Wired magazine as thetop technology that could make Bitcoin “far more anonymous.”

For the pastseveral weeks, Dark Wallet has been undergoing alpha testing as reported by Phil Cohen who notedthat “a totally professional-grade software offering is takingshape.”

Dark WalletAlpha3 (v0.3.1) is currently available for testing onChrome/Chromium browsers only.

Disclaimer:this is an alpha preview version and developers are advising against using realBitcoin during testing. Instead, the recommended method is to perform the trialrun under a testnet account, using tesntnetcoins to prevent losing real money. However, the software does “functionwell enough to allow many to participate in and contribute significantly to thecode development, review, debugging, testing and stable release candidate,”according to the report.

Using testnet to scrutinize Dark Wallet alpha will give users some realhands-on experience in using the wallet at zero cost and with no risk. Ofcourse, bugs are expected, which you can report here if you happento be one of the vigilant testers to spot one.

Installation

Dark Wallet alpha installs easily as an extension for your chrome browser.But beware:

“Do not ad lib upgrades or youcertainly risk losing your contacts, pockets, addresses and coins. I have seenthis happen to several testers who had no backups and thought the “seed” wasall that was needed to restore from scratch. To be clear, the seed is needed torecreate your Dark Wallet identity and you, additionally, must have a backup torestore on top of the recreated identity. By following the upgrade instructionsyou might save yourself from that testing exercise.”


Then, start by setting up a testnet ID before starting to explore theinterface. You can create as many screen names as you want in the spirit ofDark Wallet’s superior anonymity. It’s recommended that regular backups aremade as you would with any other Bitcoin wallet. This can be done with the“Backup all wallets” button on the Identities page. On Linux, it is stored as abackup, encrypted JSON file in the Download directory, which you should copy toa backup drive.

Cloak & Lobby

One ofthe most notable features in the wallet is a secure and anonymous chat roomcalled the Lobby. It allows users to send a “beacon” to contacts to let themknow you’re in the lobby looking for them in Bat-signal fashion. Your identityis displayed as a four word cryptographic signature.


This isyet another layer of privacy for people wishing to chat privately with anyother users of their choice without anyone eavesdropping. This private chat isfurther disguised by another lobby feature called cloaks.

Cloaks are your pseudo-identity in the lobby providing complete anonymity,which are displayed as a second four word signature and can be changed anytimeby clicking the tiny circle arrow adjacent to your cloak. You also get a newrandom cloak every time you enter the lobby.

In the lobby, user can privately contact each other and pair identities withother users, after which the cloaks can be removed. The Dark Wallet lobby isencrypted with a temporary key-pair. This means that besides the numerouslevels of anonymity and cloaks, your messages are “generally impenetrable” and canbe viewed as readable text only by other lobby users. Private messages work ina similar manner although that has not been confirmed yet.


Pockets

Another new concept in Dark Wallet alpha is pockets. These digital ‘pockets’contain the actual blockchain addresses and are a useful tool for structuringyour financing and managing how you spend and receive money. This is importantbecause you can send funds without “tying up” all of your coin as you wait foryour change since they remain available in your other pockets.

Another layer of anonymity is provided by requiring a separate and changeableaddress where change from a transaction is sent. Change addresses are displayedin the interface showing how many times they have been used and can be createdand assigned to an individual pocket, switched around and retired upon command. 

Multisig Funds

Multisig funds are exactly what they sound like. They are shared accounts or‘pockets’ that require at least two people to sign off on a transaction beforemoney is sent or received. This basically gives a user the ability to set up anescrow system. A user can establish a fund and choose the managers from the Contactstab along with the number of approvals needed to approve the transaction.

For example, a buyer and a seller can set up this escrow mechanism byappointing a third escrow officer and requiring 2 out of 3 signatures forapproval making it possible for either party to use the funds in the sharedpocket.

CoinJoin

This is the cornerstone anonymizing feature in Dark Wallet and while this isnot a novel concept by any means, it is the first mixer that can be easily usedby the lay person. Simply put, it’s a smokescreen for Bitcoin transactions,which mixes the addresses used in transaction that are recorded in theblockchain and effectively hides which addresses are related to each other.According to the report, it works like this:

“When you send coin, a brief time isspent looking for another random, unrelated, send on the Dark Wallet network...Next, your conventional transaction is aggregated into a more complex multipleinput / multiple output transaction that confuses ownership and heritage of allof the addresses involved by a factor of 2. As time goes on and mixedtransactions accumulate on top of each other, the ability to track transactionsfor a ‘known’ address becomes more and more difficult.  After 8-10 mixingsit becomes really difficult and ultimately it becomes practically impossible.Even with the very best minds, fuzzy logic, genetic algorithms and a massivecomputational resource it all becomes too mathematically confused to unthreadthe tangle of information without a rather large degree of uncertaintyremaining.”  

Moreover, this tool can also help you cover your tracks without spending anycoin by passing them through the mixer and sending them from one of yourpockets to another.

Further development plans include mixing at leas five or more transactioninstead of the present two, which will set up an ever more tangled web oftransactions to further confuse any perpetrator attempting to link an identityto an address.

Recap

So let’squickly review. Dark Wallet adds multiple layers of uncertainty to the alreadysemi-anonymous nature of Bitcoin by concealing which addresses are sendingfunds, who they belong to, and which addresses are receiving money. Next, theuser can further be removed from detection by taking advantage of multiplepockets by creating, switching, and deleting change addresses.

Ofcourse, only the most noteworthy features were covered in this report butanyone can get their feet wet and try the Alpha3 version for Dark Wallet totest all of the features that are constantly being added and improved.

It is trulyexciting to see such a fascinating project moving forward. Multiple cloakidentities, stealth addressing, change addresses, CoinJoin mixing, and the Lobbyas well as numerous other features are coming together to provide users with anunprecedented level of anonymity and security that they desire.

Not onlycould such a concept potentially become a useful tool in the wake of the Mt.Gox fiasco, security concerns etc. but it could also empowerindividuals to take control of their own money by not having to rely on andfinancial institutions such as paying hefty overdraft fees, which compriseover 30 billion USD in revenue for American banks annually.

Dark Wallet certainly appears just what some Bitcoin users have alwaysstrived for - a fully anonymous, decentralized, peer-to-peer medium of exchange.So, will you be trying Dark Wallet Alpha3? We at CoinTelegraph would love tohear your thoughts and opinions in the comments section below.

To read the Alpha3 release notes, go here