Thursday 22 May 2014 10:17 am

Darkcoin surges ahead of Dogecoin to become fourth biggest cryptocurrency

The good news just keeps on coming for privacy-centered cryptocurrency Darkcoin. In just 24 hours the digital currency has jumped 30 per cent to $10 per Darkcoin.

Darkcoin's market cap has raced ahead of peers such as Dogecoin, reaching $43.2m. Darkcoin is now within striking distance of fellow virtual currency Peercoin, ranking as the world's fourth largest cryptocurrency.

The 32-year old founder of Darkcoin Evan Duffield, said the massive rise could be due to the way some Darkcoiners are rewarded for using their computers to act as coordinators for the currency's payment system, Darksend.

Anyone can turn their computer into a coordinator, so long as they can prove they've paid 1,000 Darkcoins. Known as "master nodes", they receive 10 per cent of the new coins they add to the network. 170 master nodes have been created in the last month, according to Duffield.

However, the major appeal of Darkcoin, as opposed to the more widely known cryptocurrency Bitcoin, is its focus on anonymity. Bitcoin was popularly believed to be anonymous but every transaction is recorded on a public ledger.

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.

Darkcoin conceals its users identity by mixing up users individual transactions with those of two additional users. The cryptocurrency has been booming in the wake of an update to the Darksend system.

Named release candidate two (RC2) users of Darksend have their payments split into smaller denominations and pooled with other users. Those receiving payment draw Darkcoin from the pools until they have received the correct amount. Those viewing the blockchain will be able to see payments being made but will be none the wiser as to who paid who.

Responding to arguments that the price spike is a speculative bubble, Bitcoin consultant and Darkcoin enthusiast Kristov Atlas, told Wired  "There’s some solid indications the market price is currently based on the fundamental value of the coin.”

He points to April's price spike, which occurred after Darksend was switched on for real transactions. However, only a handful of retailers accept in the insurgent digital currency.