At risk of bombarding my bitcoin blog with too many darkcoin posts, heres another one, which I feel is maybe needed to put a bit of a counterbalance to my obvious enthusiasm in the recent Darkcoin post.
Thanks to Jean-Philippe in comments bringing my attention to this post here from the Cryptolife blog, Darkcoin – The Next Big Thing, or Just Another Pump and Dump?.
In the above mentioned blog post, the author ‘Hazard’ makes a few allegations about Darkcoin ‘darksend’ feature; mainly that the Darksend feature is not unique, doesn’t credit original creator and is closed source. I’m not too bothered about those first two allegations although it doesn’t seem very sporting, but the darksend feature being closed source I don’t like at all if its true.
Hazard goes on to describe how Darkcoin has an instamine associated with it, meaning that the launch of the coin allowed the developers an unfair opportunity to stack huge amounts of coins after which the blockchain was forked due to a supposed bug and block reward was subsequently reduced from 500 to just 5 ! Basically leaving everyone else very little opportunity to accumulate similar magnitudes of coins.
In the conclusion Hazard dismisses that Darkcoin provides anonymity, and while this may be strictly true in my view it remains a huge step up from what bitcoin provides in terms of anonymity and darksend for me at least does bring a lot of value, ignoring for a minute that the code is closed source!
I’m not sure I have formed my own conclusion entirely yet, for a start I don’t know enough about wether these allegations are true or not? If darksend is closed source then you have to trust those developers a lot, in my experience trust doesn’t go very far, for me that could be a deal breaker, they need to release the source code. The hint of bad smell over the way the block reward is so reduced also erodes some trust. Its a shame because the market is crying out for a decent crtypo coin with improved anonymity, if Darkcoin is going to be it then steps will need to be taken to regain trust.
Going back to technical analysis just now, Darkcoin found support on a key trendline overnight, now looks like its contained in a wedge which will resovle within a couple of weeks. Heres the chart from bitcoin wisdom with 4 hour candles.
If you are wondering about those curved trendlines, they would look straight on a log price scale. Bitcoin Wisdom remembers the lines and re-renders them when you switch between log and linear which is a feature I really enjoy !
My own plan of action is not to dump yet, I’ll wait and see how this wedge resolves before making rash desicions.