Darkcoin Price in Turmoil Following Emergency Fork, Network Issues

NEWS
Stan Higgins
May 28, 2014 at 22:35 UTC  |  Updated  Jun 2, 2014 at 17:49 UTC

Serious problems with a central structural component of the darkcoin network resulted in an emergency fork earlier this week, a development that triggered a broad selloff in the community.

Darkcoin employs masternodes to bundle anonymized transactions and boost efficiency and security within the network. However, a bug in the code resulted in a series of forks that disrupted payments and forced exchanges to freeze trading while a hard fork was put in place by the darkcoin team.

The price of DRK reached an all-time average high of $15 on 25th May. At press time, however, the price of 1 DRK hovered around $9.50, although price swings have seen it fall as low as $8.

Darkcoin developer Evan Duffield said in a statement published on the Darkcoin Talk forum that while the cause is not fully understood, a fix is in the works:

"This was either due to an intentional attack on the network or an issue with the masternode payments system, in either case we have a solution for masternode payments that will be safe for the network in the future."

Darkcoin has fallen to sixth place in terms of overall market cap, according to Coinmarketcap.com, dropping from third place late last week.

Changes to masternode payments

Masternodes in the darkcoin network previously received 10% of block payments as an incentive for operators to run them. According to Duffield, these payments will now increase to 20% of each block reward:

"We've wanted to increase masternode payments to 20% for a few weeks now, but have not been able to since the code was already going through the testing and launch stages. This will give us an opportunity to add greater incentive to secure the network and run masternodes."

Duffield added that community concerns over how masternode payment changes were being conducted had been heeded, saying that "we've decided the community is correct and will be using the same model as before to implement the hard forks."

Development team expands

Notably, Duffield announced that a new development team will be formed to tackle later implementations of darkcoin, as well as work on the DarkSend transaction anonymizer, explaining:

"This should allow us to move at a similar pace of development with much greater quality. The next version of DarkSend is scheduled to be released at the end of June."

Duffield also said that any interested developers should contact the darkcoin team to get involved.

Interest remains

These potentially troubling developments come during a period of rising interest in darkcoin, as evidenced by the coin's massive upswing in price and market attention. Darkcoin was recently profiled by Wired and International Business Times, among other publications. 

Earlier this week, noted bitcoin investor and finance personality Max Keiser even remarked that darkcoin is "clearly going to be a huge winner" during a show that addressed the rising popularity of the altcoin.

For more on how an increasing interest in anonymity has helped popularize the coin, read our most recent report.

Image via Darkcoin

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