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Author Topic: Exchange Audit/Transparency  (Read 611 times)
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June 15, 2011, 03:09:57 PM

In the light of MtGox being, um, not so stable these days, I'm thinking of making a new exchange.

However, here comes the issue of trust. There are already a number of topics about the credibility of new exchanges which sprung up lately.

My proposed solution to this problem is transparency - an exchange where the ongoing transactions are anonymized and then published in an externally audited database.

The question is, what is better? completely opaque and anonymous (may feel more 'secure' to someone), transparent to some degree (e.g. with names and credentials replaced by salted SHA256), or totally transparent (even with public deposit/withdraw details) exchange?
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June 16, 2011, 05:20:05 AM

I've just created a new exchange and I think the trust issue is very big. I'm interested to hear more about how you think the transparency and auditing process itself can be trusted. What specifically would you like anonymized and released?

I'm sure something like FDIC/SIPC insurance has been discussed on the forum and that's pretty much what we'll need in the long run. Think about bricks-and-mortar banks...if they didn't have insurance against internal malfeasance at least with deposit accounts(being careful to leave out horrible loan practices of recent past), would you trust them?

When it comes down to it, people trust MtGox to the extent that they can verify others have had good experiences with it. I'm hoping that organic growth from a small number of transactions will allow volume to grow on our site to meet demand.

My philosophy is to be as transparent as possible about any issues so people always know where they and their accounts stand. We just have to do what we say we're going to do and then keep doing it.


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June 16, 2011, 07:08:17 AM

A trustworthy exchange should have all transactions made public in a way that allows for completeness and privacy:
1. completeness: all buy/sell orders (not just executed trades!) should be available to the public for examination;
2. privacy: examination should not reveal particulars/identities etc.

Hard to accomplish without a third-party trusted auditor...
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