I'm looking for some BitCoin-related project to develop (web site/service), and one of things which comes to mind is currency futures trading.
As far as I can tell there are no things like this right now, neither there are prediction market/betting services. (It looks like BitBet have died.)
There is a lot of currency exchange sites for Bitcoins, but currency futures allow easier hedging against exchange rate swings and easier speculation on exchange prices.
Besides that, these currency exchange sites are huge PITA to deal with when you need to work with USD or other currency, as they require verified accounts linked to identity, bank wires and so on.
While futures trading could be 100% pure BitCoin, and thus fully anonymous and hassle-free. The trick is to do settlements in bitcoin rather than through shipment of actual currency. So it is more like prediction market than futures exchange.
So we can take, for example, MtGox spot prices as a base (as it has largest volume, as far as I can tell). At delivery date seller must pay the difference between futures price and current spot price on MtGox if MtGox price is higher; otherwise, buyer pays the difference to seller.
There is, of course, counterpart risk, which is especially acute with anonymous payments. That's why we will have margin calls -- sellers/buyers are required to post collateral when price goes up/down, so there are interim partial settlements each day (for example) instead of a huge pay day. If counterparty does not answer margin call his position is eliminated.
Thus while there are still counterparty/credit risks they are limited to daily fluctuations via margin calls.
So, the question -- would anybody use this service? (I need to know before I start developing it.)
The benefit is that you can easily hedge or speculate on currency price changes.
The downside is that service itself acts as counterparty for contracts, so you need to trust service. I guess it is better than trusting each individual market player. Although it is possible to handle some parts in P2P manner, and service can settle balance as soon as it receives margins, so risk can be minimised
I thought about doing options too, but options are way more tricky w.r.t. anonymous payments as counterparties can just walk away if it is not to their favour. Service can hold option fee in escrow until it is settled, but still I think there is a huge risk of abuse. With futures it is much more honest.
If you do not get futures terminology please check wikipedia: http://en.wikipedia.org/wiki/Futures_contract