FROM THE DARKCOIN FAQ:
What is the difference between Zerocoin and Darkcoin?
The first obvious difference is that Zerocoin doesn't exist yet.
In theory Zerocoin offers superior anonymity compared to Darkcoin's DarkSend using advanced, yet untested, mathematics.
The main problem of Zerocoin's implementation is that the whole network is encrypted with a single key that is generated during the birth of the network. The party responsible for creating the network key must also be trusted that he has destroyed the key without knowing it himself. This creates a trust dependency in Zerocoin's implementation that is too large. Has the initial key been destroyed? Does someone have it so that they can see every transaction transparently? Will the key break some day and allow every transaction to be seen in plain-text?
Darkcoin uses simpler solutions that do not require trust. Coin mixing is a simple and tested solution and that will be enhanced in the next iteration (Version 2) with ring signatures and IP obfuscation for maximum, yet trust-less, anonymity.
Please read it: http://wiki.darkcoin.eu/wiki/FAQThis action should be expected, IMO, doesn't Zerocash (FINALLY) launch tomorrow? Or at least they are finally revealing how they are proceeding if I remember correctly.
I haven't looked too closely at what they are doing, but (maybe someone who has can post a reply) it seems a bit clunkier of a process than (what I think) is a bit more fluid and elegant solution in DRK.
But there does seem to be a true "competitor" looming and i'm really curious as to what they release. I don't think they've said anything about algo, distribution or even mining at this point.
The guy running zerocash seems to suggest that the paper will be launched next week, but their alt is not yet ready. It is still a risk in putting transaction through an untried crypto, plus they still have a few issues that some will find hard to ignore - trust required at the launch, the project having been funded by the US military, long-term bloat.
1.) How do you know the key was destroyed? What if they faked it?
Are you thinking of anoncoin? AFAIK cryptonote doesn't have that problem, but I could be wrong.
"Other issues include the RSA private key used to initiate the accumulator, which must be trusted to be destroyed by the generating party"
https://bitcointalk.org/index.php?topic=583449.0