Just reviewing the cloak coin anonymity claims. This is an interesting quote from the Whitepaper.
"Again in the Phase 2 pass the originator and recipient are not recorded, instead the transaction occurs between the Phase 1 and Phase 2 nodes."
My problem with this is:
1) the transaction are broadcast and, thus, propagated to all nodes. A malicious node could simply record all these transactions and easily publish the records linking the transactions.
2) the elected node could itself be a spy and publish records of these transactions for all transactions it pretends to anonymise.
Further, there are a few other serious problems:
3) there are only two levels of mixing, which is hardly enough to provide any real guarantees
4) no mechanism is described that would prevent an anonymising node from stealing outputs
5) it is still easy to see between which nodes funds have transferred based on the amounts transferred. No mechanism is incorporated to split up the transfers into smaller units.
Hopefully my concerns and questions can help put the discussion back on to a productive track.
Thanks.