We need the outcome of the decision to be decided using a decentralized method called the oracle protocol.
The way truthcoin is currently designed, rewarding the oracle participants is a decentralized process.
Does rewarding the oracle participants need to be decentralized?
What if I have centralized control of a switch. After the decision is already made, after the gamblers collect their winnings, I have control over which way to flip the switch. If I flip it one way, then the honest half of the oracle participants get more rep, and dishonest ones lose rep. If I flip it the other way, then the liars get more rep, and the honest participants lose rep.
Would this be as secure as a fully-decentralized version of truthcoin?
Assuming betting is happening in channels, the gamblers should be able to instantly switch from one central leader to a different one, if one should make a mistake.
If I make a mistake as central leader, it would be easy for anyone else to take my list of reps, and start a competing oracle that rewards rep correctly.
The central leader don't have direct control over the outcomes of decisions, so he can't steal anyone's coins.