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Below are 3 images describing not one, but two major security holes I found in bitcoind. If the images do not explain the issue well, then I am sorry, let me know and I will try to explain them further to you, or enhance the images. But don't think they do not exist. I confirmed this with MANY pros in the bitcoin IRC channel on freenode.

After you see the 3 images that explain the problem (1st 2 show the 2 security holes, the 3rd shows my proposed solution), you can see a 4th image that explains how the solution program will run.

![Overview to proposed solution for bitcoind daemon, a mediator] (https://raw2.github.com/PyTis/btcdm/master/BitcoinD_Issue-c.png)