Darkcoin crashes 23pc after blockchain forks
27 May 2014 11:57am
Privacy centred cryptocurrency Darkcoin has suffered a massive 23 per cent fall after its blockchain split into several forks.
Cryptocurrencies can only have a single path stemming from the original block. However, one-block forks can be created when two blocks come into being only moments apart.
Yesterday, Darkcoin implemented the much anticipated masternodes, which conceal users transactions by mixing their Darkcoins with two additional users. These coordinators also receive 10 per cent of the block reward each time they are selected.
Anyone can turn their computer into a coordinator, so long as they can prove they've paid 1,000 Darkcoins. 170 master nodes have been created in the last month, according to Darkcoin's developer Evan Duffield.
Cryptocurrency Times reports that Darkcoin had to alter its code in order to use the masternodes, with a controlled fork being used for this purpose. After a few hours of smooth sailing, the Darkcoin blockchain split up into several forks.
The problem was attributed to a handful of "bad" masternodes. The world's largest cryptocurrency Bitcoin experienced similar problem in March 2013, when the blockchain split into two, with one half adding blocks to one version of the chain, and the other half adding blocks to a different version.
Reports of Darkcoin going missing from mining pools over the past 24 hours are widespread, thanks to pools having been mining the wrong fork, according to Cryptocurrency Times.
The Darkcoin team are temporarily removing masternode payments from the network to restore stability. Cryptocurrency exchanges Mintpal and Cryptsy have halted Darkcoin deposits and withdrawals until the fork is resolved.
The price per Darkcoin stands at $10, with a market cap of $43.6m. Darkcoin has experienced an astonishing rise becoming the world's fourth largest cryptocurrency just five months after being brought into existence.
The central impetus of the Darkcoin project has been privacy and improving on what Duffield sees as the errors of Bitcoin. Since the Bitcoin blockchain makes transactions publicly visible, Duffield argues that making payments with Bitcoin is equivalent to leaving your checking account open in your browser and everyone on the internet can see what you bought.