I'm going to contact the author of this and see if I can explain the strategy of Darksend. Maybe I can get him to understand the insane amount of security that provides.
In any case the way, the CoinShuffle methodology of blinding masternodes IS compatible with DarkSend. This would effectively remove the need for "rounds", even though users could still use them if they wanted. This also doesn't generate any issues from the security advisory, but for them to effectively fix their security they must adopt denominations, which isn't going to happen. As for DarkWallet, Amir is convinced using powers of 2 denominations is safe, which are as insecure as using the unique amounts (I'll write the deanonymizer as soon as they implement it). The future for Bitcoin mixing doesn't look bright, I don't believe there is a comprehensive solution.
In coinshuffle, each output is sent to the next peer in a circle, one at a time. The new peer adds an output, shuffles and then sends the list again. We can do this and actually improve upon it.
To implement blinding, each user would connect to one completely random masternode and say "Send masternode X this output/value for mix N" and pass a single output. That output would be passed to the leading masternode. It would take access to all masternodes used to know who did what, which is as solid as M rounds mathematically (M = number of outputs). This is great because all users can submit all inputs at once. So it's super fast compared to Coinshuffle and even more secure.
Wow Evan! Reading this post has really really gotten me excited!
Even though it was already extremely unlikely you could be de-anonymized with the current method, FUDDers could always point to that small chance and make a big deal out of it. With the masternodes blinded, however... dare I say NSA proof level anonymity. OK, maybe that is going a bit too far, but nevertheless I can't wait for this development!
Maybe it is time to go on another DRK shopping spree.
