Hyper-Anonymising Bitcoin Service 'Dark Wallet' Launches Today

The alpha version of Dark Wallet – the hyper-anonymising bitcoin wallet – goes live today.

Created by Amir Taaki and Cody Wilson, Dark Wallet provides new tools for financial privacy, including in-built coin mixing and 'stealth' wallet addresses.

As well as making it easier for people to disguise their transactions from the government, Dark Wallet is also a torpedo aimed at those in the bitcoin community who have embraced co-operation with regulators.

Conceived last year and partly funded by $50,000 raised on Indiegogo, the wallet was developed by unSystem, a collective of anarchist bitcoin developers. It represents an ethos that has been largely excluded from the mainstream discourse around bitcoin.

In January of this year, Circle CEO Jeremy Allaire told CoinDesk that bitcoin was “absolutely” moving away from its libertarian roots, and described attempts to avoid the regulation of bitcoin as playing into the hands of “anarchists and criminals”, adding:

“If your goals are to create a sort of shadow financial system that runs in offshore jurisdictions and is attractive for anarchists and criminals, then maybe [regulation] is not important.”

Alternative view

Cody Wilson represents the polar opposite of that argument. Integration into the mainstream runs counter to the core values of bitcoin, he says. Indeed, in his view mass adoption isn’t all that desirable.

“If you have a large division of the world's population using bitcoin it certainly bodes well for the price [...] but I think it bodes better for the technology as a marginal currency, a currency of ‘the other’.”

He points to the recent debate surrounding the use of the word 'dark' in relation to bitcoin tools, specifically the decentralised marketplace DarkMarket, which has been relaunched by others under the name ‘OpenBazaar’:

"The bitcoin community, with its insistence with neutral euphemistic language, [has] an ideology of integration, which is kind of scary. We think bitcoin is valuable because it's not capable of being or shouldn't be integrated into the current dynamic of capital."

Stealthy transactions

Dark Wallet certainly isn’t the product of “an ideology of integration”. The online wallet has two features that will make it nearly impossible for the government, or anyone else, to track payments on the block chain.

A feature called CoinJoin, first conceived by bitcoin developer Gregory Maxwell last year, automatically combines your payment with another random Dark Wallet payment under one transaction, meaning it is hard to tell whose money has gone where.

The further along a transaction chain you go, the less and less confidence you can have that the coins belong to the person you are trying to track. After just eight transactions, for example, the coins could have ended up in 256 different locations.

In future, CoinJoin may even combine your payment with more than one other payment – if you can even find an address in the first place, that is. Dark Wallet implements 'stealth addresses', where coins sent to a stealth address by Dark Wallet users are automatically redirected to another bitcoin address, which remains hidden from view.

This allows people to advertise a public Dark Wallet address without the risk of providing a window into their finances.

'Back into the dark'

The development of these tools comes as others are creating new methods for tracking and analysing bitcoin transactions.

Wilson, who first came to prominence with a 3D-printed gun, hopes that these features, which are open-source, will become standard for bitcoin wallets:

“Stealth addresses and CoinJoin will become default privacy features for the privacy conscious in bitcoin [...] this is an open-source project, there's the total invitation for people to take this code and make their own of it.”

As bitcoin has grown in popularity and received venture capital backing, its backers have sought to move the discussion away from an anti-government narrative towards a pro-business narrative. Wilson is unfazed by this shift, he talks about “going all the way with bitcoin”:

"Going all the way means being upfront about our intentions about a dark bitcoin, a bitcoin that evades regulatory oversight [...] Going all the way for us is pursuing still further bitcoin as a means for financial anonymity and privacy."

And in doing this, Wilson believes he, Amir Taaki and the rest of the unSystem group are returning bitcoin back to its true, cryptoanarchist roots.

“Everyone is trying to take bitcoin and make it something less than bitcoin. In our mind bitcoin has to move back into the dark.”

Dark Wallet's developers have urged users to test the software with playmoney via their testnet, as the wallet isn't currently stable and using it with real funds "will be a risk".