Shining a dim light on Dark Wallet

What is behind Dark Wallet, the new plug-in browser-based bitcoin wallet designed for non-technical users, and described in the New Yorker last week? The wallet is under development by Cody Wilson, who has gained notoriety as a distributor of information that can challenge traditional notions of free speech.

Wilson did not respond to requests for an interview, and little is known about Dark Wallet at present, other than what is reported in the New Yorker. The system will be designed as a wallet for mainstream users, used as a plug-in for Chrome and Firefox browsers, on Windows, Mac, and Linux machines.

The New Yorker reports that in Dark Wallet some of the computational overhead in many bitcoin clients that avoids double spending would be moved to separate servers. It implies that the wallet could be an SPV (Simplified Payment Verification) implementation. This seems likely, given the difficulty of downloading a 10GB copy of the block chain (doubtless much bigger, by the time Dark Wallet is released) using a browser plug-in designed for mainstream users who are unlikely to stand for any delays beyond a few minutes.

Wilson has a history when it comes to bringing controversial new ideas into the mainstream. He is responsible for Defense Distributed, a non-profit organization based in Texas, which aims to defend the right to bear arms in the US by distributing information about 3-D printing and guns. The organization published the 3-D printed plans for the Liberator single-shot pistol before being forced to take them down by the US State Department Office of Defence, which argued that they may violate export control laws. They have since been hosted on file sharing sites such as The Pirate Bay.

Defense Distributed also launched DefCad Search, a search engine designed specifically for 3-D printable CAD models. Searching for Liberator on this site brings up not only ordered components for the original Liberator pistol, but also new versions of the entire weapon.

Self-described crypto-anarchist Wilson is working with Amir Taaki, a British software developer affiliated with unSystem, a group building tools to subvert incumbent power structures and systems. unSystem also lists Defense Distributed as one of its projects, and Austin (Wilson’s home city) as one of its locations, suggesting that Wilson is tightly bound with the group.

Wilson and his colleagues are clearly following a particular political ethos, attempting to wrest control of the economic system from the established powers. But putting that aside for a second, we find the concept of a browser plug-in wallet intriguing.

It isn't yet clear how Dark Wallet will differ from other browser-based wallet plug-ins such as Blockchain.info's My Wallet, but presumably, the emphasis will be on making it as easy to use as possible for non-technical users.

Some of the components for an easy-to-use bitcoin system are already here, and some are coming. For example, a “bitcoin" handler has already been introduced into HTML 5, whitelisted by standards developers who have enabled a hyperlink to be encoded to start a bitcoin payment.

We have also seen plans for a new bitcoin payment messaging system, hopefully to be introduced in version 0.9 of the bitcoin protocol. This would enable payments to be requested by merchants, and to be handled using digital certificates, rather than cumbersome QR codes and incomprehensible bitcoin addresses.

And work is also in progress to create a Web Payments standard at the World Wide Web Consortium (W3C). This work would see a currency-agnostic standard which would therefore support bitcoin, and which would hopefully support one-click payments. Manu Sporny, one of the driving forces behind this W3C Web Payments group, runs an online payment company called PaySwarm. He would like to see a browser plug-in enabled that would spawn a PaySwarm payment.

One problem that Dark Wallet would need to solve would be easily obtaining bitcoins in the first place. With most successful exchanges having to toe the line and impose strict KYC rules, getting bitcoins is still one of the biggest problems for non-technical users who simply want an easy way to use it without jumping through numerous administrative hoops.

OTC exchanges such as LocalBitcoins are one way, but it still takes effort, and there's a learning curve. Various peer-to-peer exchanges have been proposed, with a simple desktop client providing easy access, but none seem to have caught on yet. Web-based wallets like Coinbase (currently US only) are probably the closest thing we have to an easy system for both buying and spending the coins, but even these involve client verification procedures that would turn off a certain percentage of casual users.

Presumably, a truly crypto-anarchist bitcoin wallet would want to step outside the banking system altogether. It would abandon the whole KYC burden and simply focus on uniting the getting and giving of bitcoins in a way that makes sense to the 75% of people who have never heard of them (and the small fraction of the others who actually understand what it is).

If that is indeed Wilson's goal, it will be interesting to see how he and unSystem do it. We should know more when the crowdfunding campaign launches, hopefully in December.