Decentralized Peer-to-Peer Wagering Architecture
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Solution Overview
Problem
Current large-scale betting markets rely on centralized platforms as both market makers and clearing houses, which can be inefficient and limit peer-to-peer wagering opportunities.
Innovation Solution
A decentralized distributed peer-to-peer wagering architecture using smart contracts on a blockchain, allowing individuals to directly bet against each other without the need for intermediaries, with smart contracts managing wagers, determining outcomes, and facilitating payments based on predefined conditions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a centralized platform acts as both market maker and clearing house, then betting transactions can be facilitated, but the system complexity and reliance on intermediaries increases
Solution Approach 1:
The patent extracts the intermediary function from the system by implementing direct peer-to-peer betting where participants transact without a centralized platform. The smart contract on blockchain captures the betting agreement, and participants directly exchange funds based on outcome verification, eliminating the need for a centralized market maker and clearing house.
Solution Approach 2:
The system enables participants to self-manage their betting transactions through automated smart contracts. Each participant independently verifies event outcomes and receives payouts directly to their wallet based on contract terms, without requiring centralized platform intervention for transaction facilitation or fund distribution.
2Reliability
If a centralized platform acts as clearing house, then bet settlement can be managed, but peer-to-peer direct wagering is limited
Solution Approach 1:
The smart contract automatically executes settlement based on verified event outcomes, enabling participants to directly wager against each other without centralized clearing house intervention. The contract self-manages fund distribution based on outcome verification, combining reliability of automated settlement with versatility of direct peer-to-peer wagering.
3Productivity
If centralized platforms administer money taking and settlement, then betting markets can operate, but efficiency and transparency are reduced
Solution Approach 1:
The patent introduces blockchain smart contract as an impartial intermediary that automatically executes settlement based on predefined outcome verification. This intermediary operates transparently through immutable blockchain records, eliminating information loss associated with centralized platform operations while maintaining efficient market functionality.
Data Source
AI summary
Systems and methods are provided. A system includes a communication interface, a processor circuit and a memory coupled to the processor circuit. The memory includes machine readable instructions that, when executed by the processor circuit, cause the processor circuit to generate, within a decentralized distributed peer-to-peer wagering architecture, a data block that includes a smart betting contract that manages a wager that is between a plurality of betting parties. The processor circuit further determines a wager outcome based on an event outcome based on a condition that is defined in the smart betting contract and, based on the wager outcome, executes the smart betting contract to cause a value that corresponds to the wager to be transmitted to one of the betting parties.