In general, what you said sounds like a good way to do all kinds of betting services.
Well, yeah, I was thinking about it since 2011... My plan was to start with BTC/USD futures, and then to expand into options, prediction market, betting, etc.
Never got around to it, though
I wonder why this kind of thing doesn't seem to be standard by now.
I wonder about that too... Perhaps people simply do not give a fuck.
Even without the use of a mediator this kind of system seems quite good to me. The risk the user of a site like this
In an extreme case the operator of the site could refuse to release anybodies money, but he wouldn't get it either. The whole site could also be shut down by the authorities, with the same result.
Well, it would be great to solve this problem...
For example, it is possible to give a trusted 3rd party an ability to return funds back to user, but only after a large timeout. Say, two years... It is possible that users and this 3rd party will collude, but presumable it will be detected before timeout, and so it is possible to punish this trusted 3rd party before timeout.
Would it be possible to return the money automatically after some period of inactivity, without any action by a mediator? This could also be included in the rules of the game, which the user would know precisely when he starts using the site. The site could also be run on any kind of shady web server in any part of the world, without a big risk by the user.
I personally would trust an automatic return of money more than any mediator, who could also disappear etc.
In my opinion, the worst thing in this scheme in general is that the winners have to wait for the losers to release their money. Of course this could be mitigated with the site keeping some amount of buffer funds available. And the buffer would be there just to speed up the payments, and not be an integral part of the operations.