For a long time now, MtGox has been collecting personal and financial information about its users (in a manner completely against the spirit of Bitcoin, IMHO.)

In the beginning it was only names and bank accounts, required to wire money in and out of MtGox.
Later, MagicalTux started to ask for scans of notarized copies of government issued ID's, passports, bank letters, utility bills etc. in order to increase withdrawal limits or simply to release funds.

I would like to know:
1. how many people had their personal information compromised during this attack.
2. what kind of information was leaked.
3. were the proper authorities informed abuot this incident (not MtGox being hacked, but people's personal info being exposed - different animal!)

MagicalTux, please think really hard before you answer this!
It is your chance to come clean about some unclean practices...

[Distributed Bitcoin Exchange]

At this point, one of the main weaknesses of the Bitcoin ecosystem is the exchange of BTC to other currencies. Since Bitcoin may need a few more years to take over the global economy, exchanges will remain necessary.

There's only one major player on the market, MtGox. Unfortunately, it is not suitable for anything but very small businesses or small volume traders because of the daily/monthly withdrawal limits – which are currently VERY low ($1000/day, $10,000/month). MtGox (and others) are likely to maintain these limits unless they want to become regulated financial/banking institutions (very expensive) and destroy all privacy for their customers (which MtGox already does by requesting government ID's for all medium / large accounts).

Some believe that the solution would be to have more MtGox/TradeHill/BitcoinExchange – like exchanges around, so if one fails, gets closed down, etc. the others will remain active etc. While that may be true, it does not solve three fundamental problems: withdrawal limits, privacy and trust.

Withdrawal limits of $1000/day and $10,000/month are laughable. No serious business or trader can live with that. IMHO, this is one of the biggest drawbacks for the Bitcoin economy at this time.

Privacy is another major issue. One of the ideas at the heart of Bitcoin was to provide a cash-like anonymous currency. How can it be cash-like when MtGox wants to check ID's and Passports before it releases funds?

Trust will become a more and more important issue as the Bitcoin economy grows. Most Bitcoin users have no problem entrusting 10 BTC to BitcoinExchange for a couple of days. Would they do the same with $1,000,000?

I think there is a simple solution which is in the spirit of Bitcoin: a Distributed Bitcoin Exchange. The software can be anonymous, peer-to-peer, use strong cryptography, and use a network of supernodes to maintain and distribute the database of buy/sell orders. The users/businesses  maintaining the supernodes would be sharing the transaction fees using a fair model, and the whole system could interface with LibertyReserve, Dwolla, banks etc.

In order to take care of the “administrative” side of things, there could be a board-of-trustees-like governing body – initially some prominent characters of the community, later elected members etc. This board could hire, manage and pay programers, developers, CPA's etc.

Financing this project could be done by selling stock in this “corporation” and / or accepting donations of BTC, USD, time, skills, talent etc.

If this project succeeds, maybe later the functionality can be incorporated in the main Bitcoin client, which would make using Bitcoin even simpler.

All comments and opinions are highly appreciated!

[Distributed Bitcoin Exchange]

At this point, one of the main weaknesses of the Bitcoin ecosystem is the exchange of BTC to other currencies. Since Bitcoin may need a few more years to take over the global economy, exchanges will remain necessary.

There's only one major player on the market, MtGox. Unfortunately, it is not suitable for anything but  very small businesses or small volume traders because of the daily/monthly withdrawal limits – which are currently VERY low ($1000/day, $10,000/month). MtGox (and others) are likely to maintain these limits unless they want to become regulated financial/banking institutions (very expensive) and destroy all privacy for their customers (which MtGox already does by requesting government ID's for all medium / large accounts).

Some believe that the solution would be to have more MtGox/TradeHill/BitcoinExchange – like exchanges around, so if one fails, gets closed down, etc. the others will remain active etc. While that may be true, it does not solve three fundamental problems: withdrawal limits, privacy and trust.

Withdrawal limits of $1000/day and $10,000/month are laughable. No serious business or trader can live with that. IMHO, this is one of the biggest drawbacks for the Bitcoin economy at this time.

Privacy is another major issue. One of the ideas at the heart of Bitcoin was to provide a cash-like anonymous currency. How can it be cash-like when MtGox wants to check ID's and Passports before it releases funds?

Trust will become a more and more important issue as the Bitcoin economy grows. Most Bitcoin users have no problem entrusting 10 BTC to BitcoinExchange for a couple of days. Would they do the same with $1,000,000?

I think there is a simple solution which is in the spirit of Bitcoin: a Distributed Bitcoin Exchange. The software can be anonymous, peer-to-peer, use strong cryptography, and use a network of supernodes to maintain and distribute the database of buy/sell orders. The users/businesses  maintaining the supernodes would be sharing the transaction fees using a fair model, and the whole system could interface with LibertyReserve, Dwolla, banks etc.

In order to take care of the “administrative” side of things, there could be a board-of-trustees-like governing body – initially some prominent characters of the community, later elected members etc. This board could hire, manage and pay programers, developers, CPA's etc.

Financing this project could be done by selling stock in this “corporation” and / or accepting donations of BTC, USD, time, skills, talent etc.

If this project succeeds, maybe later the functionality can be incorporated in the main Bitcoin client, which would make using Bitcoin even simpler.

All comments and opinions are highly appreciated!