It would be even cooler to get it working in user browser with local CPU and no upload thanks to ffmpeg on WASM: https://github.com/ffmpegwasm/ffmpeg.wasm

Very very cool.

The only issue is then your depending on the user not doing something stupid during the 5 minutes of so it takes to process.

I personally don't have time for this experiment, but it's definitely interesting

If mega.nz can keep user attention during download and decryption - yes, that happens all client side - then I don't see user doesn't wait for local transcoding process to finish. Show them pre/post processed keyframes as progress indicator.

The last step involves video compression which could take a bit of time depending on the size of the video. If someone can put it on the cloud, I'd love to take a look :)! Cheers!