Idea: Decentralized Betting Exchange

[ffunenga]

Hello everyone,
I'll leave here an idea that I've been developing hoping I can get opinions on the subject.
This idea tries to solve a problem that will probably appear in my country (Portugal) in the next months with the new law for betting.
The technical solution presented is based in public-key cryptography and bitcoins.

At github [1] you can read dbex.pdf. Contributions and corrections are welcome!

[1] https://github.com/ffunenga/dbex

[ffunenga]

Hi Ukigo,
thanks for pointing me in the right direction.

About your observations:
1) hum... thats actually the main problem. If you think its possible to make a system without the involvemetn of a third-party or an approach where no trust is required to be given to that third-party (and obviously if you have a tecnichal solution to that) please tell us!
What I present in dbex.pdf is an "in-the-middle" solution between what you suggest (and I agree) as the perfect solution (no trust required in a third-party) and total trust in that third-party. What I suggest gives the bettors the ability to prove they have been scammed by the regulator, if needed. With this, the regulator has no interest (or margin for manouver) in stealing from its clients.

2) I don't understand what "selling" or "buying" a bet(lay or back?) is... Is it a different kind of trading from the one available at betfair or betdaq?
4) very good one.. Didn't though about that but it makes total sense.

[jgarzik]

This is doable in a decentralized manner.  See https://en.bitcoin.it/wiki/Contracts

In particular, this specific example applies: https://en.bitcoin.it/wiki/Contracts#Example_4:_Using_external_state

[JayBee66]

I have been thinking of decentralised betting too.

A dark pool to circumvent exorbitant Betfair fees or to provide exchange betting in jurisdictions that have outlawed it or forced exchanges to leave due to tax regimes.

Betfair is P2P but it is not decentralised. Consequently Betfair can charge commissions.

I am looking for a decentralised P2P exchange with no commissions.

How that is achieved, I don't know. It would mean that prices are located on individual machines. But if you are looking for a certain price to hedge a market then you just post the ask and and let it propagate through the network until some bids it on another machine.

The usual protocol will then write a ticket, confirming the transaction. From there you need a reconcilliation after the event has decided who won the bet and a transfer of funds is made. How this is achieved without 3rd parties, I don't know.