I'm putting together an idea for a decentralized lottery right here at Steem. This one would be a lot different than the one you can find at @fairlotto because it would be owned by the community. I'm looking to run a free lottery where no centralized agent profits off the service. Anyone will be allowed to host their own lotto.

The legality of such a project is quite questionable. I'm certainly free to program it, but who is legally permitted to use such a service? I used to think that gambling required a centralized agent to skim off the top to meet the legal definition. After further review, it looks these three aspects are what define a lottery:

• Consideration
• Chance
• Prize

Consideration is the buy-in. In this case let's say 1 SBD.

Chance is pretty self explanatory. My lottery would only have a single winner per round, so the chance of winning would be 1 / total_contestants. e.g. in a game of 100 people you'd have a 1% chance to win 100 SBD.

Prize is the 100 SBD. No friction; no rake. Everyone gets even odds so everyone should break even on average. A system like this would not exploit compulsive gamblers.

How to avoid regulation and legal ramification?

Obviously, the best way to avoid the man is to create the most decentralized system possible. Also, I'm working on a system that might circumvent 'consideration' by tying the lotto into my honor system. There is no guaranteed prize: We trust that the people who were allowed to enter that particular lotto will pay up. Anyone who doesn't pay up gets blacklisted.

Bitcoin

POW coins provide unhackable random number generators. I can use the security of Bitcoin and friends to create the 'chance' part of the equation. Whoever gets closest to guessing the next hash wins.

I have a lot more ideas for all this but I've got to go to work. I'll think about it more tonight and get back to you guys later on this project.

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