maybe. but you asked "are they completely arbitrary", and they're not.

doesn't mean TA based on trendlines is really accurate. personally, i think trends play an important role, but "support" and "resistance" is overrated (in the sense that they don't specify an exact value at which price will bounce off, but instead specify a price region that is of interest perhaps)

Thanks for the more detailed explanation. I should also say, I trust dooglus. It's more out of curiosity that I'm wondering if a trustless system not involving the blockchain could be set up...

Can you explain what is wrong with the following set-up:

1) the rng server/seed server

2) the usual just-dice server

3) the player.

the rng server allows exactly the following 3 calls made from outside:

- give me a random number (including a timestamp and a hash of the server seed that was used)

- reveal a server seed (this call be made exactly once per seed, the 2nd time it returns "already revealed")

- shutdown (needs a password, only dooglus has it)

Gambling works as follows: Player sends player seed and some 'bet identifier' to the seed server. Seed server generates a random number and sends it to player and just-dice server. Just-dice server does the rest (size of bet, storing the result, adding/deducting amount from players account etc).

Say an attacker wants to know the server seed you are using. He can ask the server to reveal it, but you will be able to tell afterwards (since the server doesn't allow revealing more than once). It doesn't prevent cheating in this way, but it makes it visible.

Say an attacker somehow intercepts the random number generated by the seed server. That's where the time stamp could help I think: tampering will take time, which will show itself in a delay between time stamp and bet executed on the just-dice server.

How to prevent reading out information if you have physical access to the server? Don't know if that's possible. Is there a way to encrypt more or less the entire execution of a program?

Can you explain why that is the case? Isn't there a way to set up as a system that, once it is running, doesn't allow changes to it anymore, i.e. it does what it needs to do (sending server seeds, reveal one if asked by player), but doesn't allow additional changes or attempts to read out data?

If that is a problem that is provably impossible to solve (say, a know problem in CS), then I'm not going to continue arguing of course

Isn't there a way to set up a server that generates the server seeds and sends them to just-dice, but that doesn't allow those seeds to be read out ahead of time, i.e. before they are sent?

Sure. But that wasn't my question. I wanted to know how to formally include the possibility that the (simulated) whale stops playing at a certain point (defined by how much he brought the house down), and how to calculate the results of "another" whale who continues playing at maxprofit.

Thanks a lot for posting those results, tucenaber. I started doing some simple simulations myself yesterday, but I keep running into one conceptual problem, and was wondering if you maybe have an idea how to solve it:

You start from the premise of a single player playing until he goes bust.

First question: for a sufficiently large player bankroll (say, 10 times the casino bankroll) there should be the possibility as well that the casino does in fact go broke. Can you quantify that risk?

Second question: As your simulation shows, there's a 10% risk that we reach 57% of initial bankroll, assuming 1/2 kelly (it's a bit of a simplification I guess, since casino bankroll is dynamic, but it doesn't matter for our purposes). Say the whale/player stops at this point. That's a possibility, right? We could specify, ahead of time, "player keeps gambling until he brought the house down 40%". It was your choice to let the simulation run until the player is broke, but in reality, a player could pull out, leaving the site at 40% loss.

Now comes the tricky part, at least for me: (a) What if another whale comes along? (b) What if "the other whale" is the old whale, continuing to play. Is the correct way to think about this situation as independent probabilities, so in this case: there's a 10% chance the house lost 43% (assuming the whale "left"), and there's a 10% chance that this will happen again (from the current, reduced bankroll), either by the same whale, or another whale who plays maximum profit bets?

Good point. But it's a bit of a trade-off: under my rules, you were *always* able to divest and withdraw, so noone could have ever complained "But I need my money for something else RIGHT NOW!".

In principle, I like your solution slightly better though, because it allows new investors to jump in right away.

True See my edit, please. Deposit age, instead of account age, should solve this (or at least greatly reduce the ability to daygamble)

Care to elaborate on that?

My proposal was as follows:

rule 1: for each account, if 'divest' action within last hour, block 'invest' action.

rule 2: for each account deposit, if account deposit age < 1 hour, block 'invest' action.


Say you want to invest amount X from an existing account deposit: you can do so immediately (assuming you didn't divest less than an hour ago).

Say you make a new account deposit: you'll have to wait one hour. If you plan to leave your money invested for a while (even if it's only a few days), then one hour won't matter much.

Turn it anyway you want: the only people hit by a 1 hour delay are the daygamblers. Even short-term investors (who want to stay invested for less than a day) can still do so! It only prevents "riding the waves" of a whale like nakowa, and adds a minimum of investment stability, which I would think is beneficial.


EDIT: account --> deposit, otherwise it won't work.

this won't completely eliminate daygambling, but it will greatly reduce it:

Say you have amount X available. Currently, you can use that full amount for daygambling. Under the rules I propose, you can only use a fraction of desired daygambling frequency per hour - 1 of that amount for daygambling, because you'll have to split up the amount over that many different accounts ahead of time.

A lot of the discussion about investment daytrading daygambling misses the point:

It doesn't matter if investment daytrading is long-term -EV or not (as I said before, if the site is compromised it could be +EV, because then the bets aren't random either anymor), but the real point is this:

What's the point of allowing investments in the site to be another form of gambling, when there already *is* a way to gamble if you want to do so?

Right now, a number of investors lost more than their share of the house loss because of this trading. It makes them unhappy.

So the only relevant question, in my opinion is:

Is a majority of investors in favor of daytrading (because they like to do so themselves)

or

Is a majority of investors against daytrading (because they suffered additional losses because of it)

(yes, there could be a third, indifferent group, but I'm simplifying here)

I propose we find out what the majority of investors think about this, and then bring the issue to dooglus for consideration.

As I've said before, I'm in favor of limiting investment daytrading: introduce a one hour (or so) delay to re-investing after divesting (and add additional measure to reduce the risk of circumvention via multiple accounts). The goal is not to reduce daygambling to 0%, but to limit it.

one can be sceptical about TA in general, or just the quality of TA on this forum, but one should at least know the basics before condeming someone's aproach (not so much aimed at you, but notme's flippant remark below)

anyway, spekulatius can correct me here, but it looks like he drew the support/resistance lines through the extrema of the candles. in this type of TA the belief is that, the more "points of contact" you have, the higher is the validity of that trend line.

zooming in, with a bit of good will (he used a pretty thick line ) the purple line has 5 points of contact, which would be rather good.

disclaimer: I'm not the biggest fan of TA based on candle extrma, but I'm not completely dismissing it either.

EDIT: re: your question why there isn't another line above or below. Some people using a similar TA do exactly that: drawing parallel lines below and above the main trendline, assuming that if the trend line is broken, the next parallel will be the "next level of support/resistance"

If this market would be mainly driven by professional traders, institutional investors, etc., then, yes, maybe. (cue: "lol banks are fail. expect hyperinflation tomorrow!") In reality, I'm not sure at all if it is priced in, especially because it touches on the central question of pretty much all of our current trading: how to accurately price something that has huge potential, but also a rather large chance of failing. If our little experiment turns out to be successful, the gradual realization of the reality of coin supply will drive price up at a breakneck speed. If it fails, for whatever reason, the coin supply won't matter anyway.

re: "only people who lost want to tinker with the system". Nope. I'm still ahead in invest profit. And I'm in favor of a delay.

re: gamble&re-invest. You're right, I've done so as well. And you still can do that, only with one hour delay.

Also, you're not really addressing my point: invest-trading/gambling serves absolutely no purpose (the example you gave, of gambling, then re-investing is something else), and there is arguably negative consequences. If something has no positive side, and quite possibly a negative side, then it is only rational to get rid of it.

I'm addressing that point in my post: I said, at around bet 6000, some people decided it's a "pattern" and traded accordingly.

You also noted that I said, several times in fact, that I'm aware that in the long run, investment "trading" should be -EV, right?

But that wasn't my argument anyway: in the short run, it can be +EV. So a loss like the one we suffer now isn't distributed evenly over investors. So the losing investors will be unhappy. So the site will lose investors, which is bad for everyone.

That, in a nutshell, is my argument why invest-trading hurts j-d. And the complementary argument is: there's no good reason to *want* invest-trading: j-d already has a gambling mechanism. Investments should be just that: investments.

Like I said: let's wait one week. If site profit goes up, we didn't cause any damage. But if we hit new lows/nothing changes, then I support 1% --> 1.5% house edge

@pascal257

re: withdrawal delay. Maybe not a withdrawal delay per se, because it could make the *gamblers* nervous, but an 'investment from new deposit' delay should have the same effect, and only affect investors

@rampion

re: house edge 1% vs 1.5%. Thanks for your support. I said I'd rather wait a bit with raising house edge. Let's be honest: if nakowa moves away completely now, we're in a deep minus that'll take a long time to reverse (though I hope nakowa's as compulsive as we think he is). So the edge might not affect him anyway.

On the other hand, if we wait another week, let's see what happens. If site profit keeps going down (to new lows), I agree, raise the house edge. But if it stabilizes or goes up, we won't have chased customers away to the competition.

But, yes, I ultimately agree with you: a site that is not profitbale for investors in a very very long time (say, many months), will ultimately become uninteresting.

Okay, this is going to be a longer post, responding to a number of people that wrote interesting comments. But first, can I please make one request:

Can we please try to retain a minimum of respect for each other in this discussion?

If find it incredibly frustrating that it's completely normal to throw around insults to someones intelligence in here because he or she disagrees with you on one or the other matter. If somebody is simply wrong (in an obvious, mathematically provable way), explain why he is wrong. But if a number of people, many of which have an education in a relevant field (CS, math, anything else with statistics) disagree on a non-trivial matter, then please keep in mind that you're poisoning the atmosphere and effectively contribute to reducing the signal/noise ratio if you throw around those insults.





That said, first reply:


The problem, in my opinion: too many simplifying assumptions, therefore the result is somewhat off. For example, a large portion of the current  cumulative site loss was caused by early nakowa wins, when we still used full kelly, and max profit was significantly larger than 200.

So here's a similar calculation that IMO makes slightly less simplyfing assumptions, about the likelihood of nakowa winnings yesterday:

Yesterday's amount wagered: 1.5M, a huge portion of which came from nakowa, whose bets where, by a vast majority, at max profit (180-190). The same calculation as above: (1500000*1%)/(180 * sqrt(0.495*0.515*8333)) = 1.8 standard deviations below expected profit.

Quite lucky? Sure. Enough to reject the null hypothesis (fair RNG, no cheating)? Not quite.

Note that this is also in line with Peter R's results who keeps posting updates on the likelihood of nakowa's cumulative winnings.




Second reply:


and


I personally would prefer if we go on with a 1% house edge for now. It gives the site a competitive advantage which might otherwise be lost.

But about the other point (investment "daytrading") I agree. Which brings me to reply #3:





There's at least one mathematically sound reason why one might disagree with the claim that "daytrading" is entirely random. So, first, please stop throwing around insults against people's intelligence.

That reason, no matter how unlikely, is that if nakowa would actually be cheating (he hacked j-d, found a flaw in the RNG, whatever), then his winning patterns are not completely random either, so "daytrading" in consequence could become (partially) deterministic as well. Agreed?

Please note: I'm not saying that's necessarily the case (that nakowa is cheating), but it's at least conceivable.

More importantly however, whatever you think the reason for this is, please look at nakowa's yesterday winning charts and tell me that there is no "exploitable" pattern to it:



At around bet 6000 or so, some people started a strategy that reversed investing/divesting at around the -2000/2000 mark (I was on j-d chat yesterday). Which turned out to be a rather profitable strategy.

Now, please read the following: Yes, I know. In the long, no such strategy can be profitable (unless nakowa's results are not random either). But yesterday, this sure tweaked the distribution of profits and losses.

So here's my opinion on this matter:

If you want to gamble on j-d, gamble. If you want to invest, make it an investment that lasts longer than a few minutes.

Someone here said he sees very little harm done by investment daytrading: I disagree. In the short run, some successful "daytraders" will skew the distribution of profits/losses among investors, which makes the losing investors rather unhappy, which in the long run hurts the site, because they might take out their investment and not come back.

Additionally, I see absolutely no benefits from investment daytrading. Again: if you want to gamble, you can do so by the gambling mechanism. I don't know where the idea comes from that the investment mechanism has to contain a gambling element as well, especially if (for the psychological reasons described above) it arguably hurts the site overall.

A possible solution:

I think a short, but noticeably invest/divest delay would be helpful.

Here's how it could work: Divesting is always instantenous.  Your initial invest is as well. But after any divest, another invest has to wait 1 hour. That's all.

You can still take out your investment whenever you want. You can still invest/divest several times a day. But "trading" swings when a whale is on the loose should become impossible.

Let me repeat one more time: Assuming the site works as intended (no cheating going on), then I know investment "trading" is -EV,  just like gambling. But in the short term, strategies based on the winning patterns of a whale can fuck up the overall investment situation, and will make many investors understandably unhappy.

Where do you get this from?

The j-d FAQ seems to imply otherwise.

Right. But let's say we take the usual 50% bet, then max bet = max profit (ignoring for a moment house edge)

In that case, did I get calculation of house edge right?

Question regarding just-dice house edge

I'm trying to get a better understanding of the results of different investment strategies in j-d. Being the lazy person that I am, I chose to simulate first, before I try to solve anything analytically. But first, let me know if I understood the house edge on j-d correctly:

It is not an edge on the probabilities of the "dice throw" itself (like, say, in Roulette), but it is a reduced payout in case the player wins, right?

Example:

Say there is exactly one investor, who put in 100 btc, at 1% maxbet. A player places a maximum size bet of 1 btc.

In case the players loses, the investor's new balance is:
old_balance * (1 + 0.01) = 101 btc

In case the player wins, the investors new balance is:
old_balance * (1 - (0.01 * 0.99)) = 99.01,
where the factor 0.99 represents the house edge of 1%.

Yes? No?