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The core developers of Darkcoin solicited Kristov Atlas, a major figure in the anonymous currency space, to review Darkcoin’s code and to point out any bugs or possible attack vectors that he found, so that they could be fixed. Darkcoin's development team has always intended to open-source Darkcoin, but wanted to make absolutely certain they wouldn't be exposing any attack vectors in the process. Review by an independent third-party was vital, and Kristov agreed to fill this role.

Blockchain technology, first pioneered by Bitcoin, has always faced a critical weakness: careful analysis can trace transactions back to their source. Darkcoin uses an innovative technology, called DarkSend, to obscure the source of all transactions. For the first time, users have all the advantages of blockchain-based cryptocurrency while still retaining their financial privacy.

Kristov decided to conduct his review of Darkcoin in two parts: first, he would analyse the DarkSend process and ensure that it really did provide a high level of anonymity, as the Darkcoin team had promised. Secondly, he would the actual code and verify that there were no exploitable weaknesses before the development team opened the source code to the world.

Kristov released the first part of his report on DATE, with the conclusion that DarkSend does work and provides an extremely high level of anonymity and privacy. He did, however, conclude that there were several potential minor attack vectors, and one fairly major one. The most serious way to attack DarkSend’s anonymity, Kristov said, would be to launch a Sybil attack against the network. Evan immediately responded to this with a new version of Darkcoin, called Release Candidate (RC) 5, which will be released on September 22 and end the possibility of a Sybil attack. RC5, as it is called, will also introduce a number of user interface improvements, bug fixes, and a form of "enforcement" which will kick any misbehaving mining pools off the network. Finally, anonymity will be further enhanced by increasing the number of peers required to mix coins.

DarkSend uses a unique technique to anonymize transactions. Instead of mixing coins upon their sending (the so-called CoinJoin process), DarkSend actually pre-mixes coins while they are still in the wallet, allowing "anonymous" coins to be always available. The total balance in a user’s wallet is broken down into common “denominations” (such as 1, 2, 4, 16, 32, etc.) and each denomination is mixed with other users’ coins through Darkcoin’s masternode system. Every 10 blocks (approx. 25 minutes), a random masternode is selected by the network to be used for the mixing process. If at least three users have similar denominations that need to be mixed (for instance, Sue, Bob, and Sam all have a 32 coin block that needs to undergo mixing), then they will be mixed and sent on to the next masternode in the chain, up to eight different times (depending on one’s preferences—more “rounds” of mixing are more expensive and time consuming, but offer greater privacy). Each round of Darksend, as it’s called, costs 0.0125 DRK, or about four cents at today’s prices.

Following the release of RC5, with the enhancements outlined above, including fixes to Kristov's suggested weaknesses, Darkcoin’s development team intends open-source Darkcoin. The development team intends to wait one week to fix any bugs which might be found on mainnet, and then will open the source. Open-sourcing Darkcoin's code will allow the world to examine it for themselves and to further improve it, as has been the case with Bitcoin.

Following the release of Darkcoin’s source code, the development team intends to continue innovating by adding things like IP obfuscation, creating a light-weight Electrum wallet, and possibly most exciting of all, integrating a soon-to-be announced idea which will result in nearly instantaneous confirmation of transactions. Evan Duffield, lead developer of Darkcoin, intends to release a white paper describing his idea for instant transactions, which can be used both on Darkcoin and even on Bitcoin itself (Evan explains that his idea is completely compatible with Bitcoin, does not bloat the blockchain, and does not require a hard fork to implement). If successful, such an idea could revolutionize cryptocurrency, by shortening the delay in confirmation of transactions from as long as an hour (with Bitcoin) to as little as twenty seconds.

This could be huge if it works for darkcoin and later for bitcoin(needs hardfork for that so than most likely not).

source of the article?

Here is the release of the new whitepaper. Not much of a suprise using the masternodes(thats the only direction to go). Same handicap as for proof of stake, you hope that no one is willing to spend a huge amount of money to control the mojarity of stakes/masternodes. Looks promising... Really trustless is nothing in crypto... starts with code release and ends with the miners.

Drk masternodes are like a proof of stake system build on top, that is getting clearer to me every day. Proof of work is a dead end.

https://www.darkcoin.io/downloads/InstantTX.pdf