I want to have a no-limit casino to invest , like you can bet all the investment , which was like 30k or something , be able to bet 30k than. Thats more fun , casinos should take some courage to run , even if its not your money to run , even better if its like that.
Could not agree more. The fearful investors are messing this up for everyone. If there's no/little chance for the house to lose, then there's little/no chance for the players to win, and the whole thing loses its luster. For more on Mechs and his discussions (pleading with Doog) on im yesterday. Doog should release this chat as he has done with Naks in the past. Doog proposed a solution: make max bet a market. You choose what your tolerance is and the site will adjust. Mech could have set his to 0.25%, I would have kept it at 1%, every investor votes with their wallet. From there you get the max bet and the proportion to be paid out to each investor. No controversy, no arbitrarily choosing numbers. House edge can remain fixed so that from the player's point of view, nothing changes or is unfair. Either way, I think doog made a brilliant site and I'm happy to participate in the experiment. is brilliant. I can absolutely get behind that. (also, people should give mechs a rest... you guys are just pissed off because your word didn't have as much weight in doog's ears.) |
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In a totally perfect world I agree that the Kelly criterion should be followed. However, there are two things that need to be taken into consideration in this situation.
-The possibility of some flaw in the RNG.
-The possibility of Nakowa cheating.
[snip]
Those are not the only reasons. Kelly criterion is about maximizing growth. Individuals (investors) however might also have a (differing) view on risk management, i.e. they are willing to accept less-than-optimal growth in trade for a lower chance to lose everything/a lot. And another point: simply calculating the optimal value according to Kelly assumes a static system which j-d is certainly not: assume bankroll size of a whale stays the same, but as a result of normal variance, the bank is down substantially and investors get scared and start divesting. While the whale wouldn't have been able to break the bank before, he might be able to do so now. Both are valid reasons to stay below the Kelly value. The max profit is a rolling calculation against the size of the bankroll. People divesting means lower limit. But that limit only applies to a single bet, not the cumulative earnings of a whale. EDIT: to clarify, as the whale keeps playing, then bankroll goes down, and so does maxbet. the limit of that sequence is still a broken bank :P |
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In a totally perfect world I agree that the Kelly criterion should be followed. However, there are two things that need to be taken into consideration in this situation.
-The possibility of some flaw in the RNG.
-The possibility of Nakowa cheating.
[snip]
Those are not the only reasons. Kelly criterion is about maximizing growth. Individuals (investors) however might also have a (differing) view on risk management, i.e. they are willing to accept less-than-optimal growth in trade for a lower chance to lose everything/a lot. And another point: simply calculating the optimal value according to Kelly assumes a static system which j-d is certainly not: assume bankroll size of a whale stays the same, but as a result of normal variance, the bank is down substantially and investors get scared and start divesting. While the whale wouldn't have been able to break the bank before, he might be able to do so now. Both are valid reasons to stay below the Kelly value. |
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hmm, too much info to be useful? or the begging was obnoxious maybe?
The range has been good so far for the last week.
Right, forgot I wanted to say thanks. Don't have much time playing around with it, but I will eventually. Also, keep on posting here... good to have you around (no homo) (k, maybe sort of homo) (but balls didn't touch!) (I'm ruined :/) |
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If someone comes in and sees they are essentially being punished for betting bigger, by having worse odds, you will never get anyone sane to play big. That's what I'm saying.
Valid point. As someone pointed out in j-d chat (I didn't check if he's right), all other betting sites either have much lower max bids, or if they have higher max bids, they have higher house edges. My point would be: make sure j-d is still the best place for whales (i.e. best combination of highest potential profits and lowest house edge), but make it *slightly* more expensive to come in with a huge payrollbankroll and fleeze the bank. edit: d'oh |
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I guess a casino should pay half what a blackjack is worth if you bet over a certain amount also huh. Or if you bet 5.00 on red you win 10.... But if you bet 100.00 u only won 195.00
Your comparison fails. A random casino also will send someone to break your kneecaps refuse a customer who they fear to possess a bankroll as large or larger than their own. Plus, what's with the "principles"? Are we following the holy bible of casino morals? Hint: we're not. We should do what both interesting for players and profitable for investors. That's all. Actually...your comparison fails. You said it, they can refuse service. But they DO NOT change the odds. And jd can refuse service also. Lower max bet. As they did. To change the odds is dumb and totally unfair. That's the same as me betting on a nfl game, at even money, but after my team takes a 21 point lead, the sportsbook decides that the odds are going to be -30 instead, in the middle of the game. As for your principals comment. Really? So you advocate the site to be careless with morals? Because I'm sure THAT will make people gamble there. You shouldn't post, honestly, unless you think before talking. You're taking it personal. Don't. First, you're changing topics. I didn't say I'm in favor the sudden lowering of max bet, that was probably a mistake. I do however think max bet 1%, house edge 1% <50btc, 2%>=50btc is the way to go. And you don't understand what I meant by morals. Acting immoral as in: cheating customers is simply bad business, so no sane investor wants that. But there are no "morals" that define you can't have different values for the house edge depending on bet size IMO. That's what I meant by "there are no morals". |
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I guess a casino should pay half what a blackjack is worth if you bet over a certain amount also huh. Or if you bet 5.00 on red you win 10.... But if you bet 100.00 u only won 195.00
Your comparison fails. A random casino also will send someone to break your kneecaps refuse a customer who they fear to possess a bankroll as large or larger than their own. Plus, what's with the "principles"? Are we following the holy bible of casino morals? Hint: we're not. We should do what both interesting for players and profitable for investors. That's all. |
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The whale showed us that large bets are risky for the house. Why not to change house edge with a bet size? So that someone could bet even 1000 bitcoins at once, but with a house edge like 20-30%.
That the plan - the max profit limit a stopgap measure only. He will be raising the house edge gradually for bets over 50 BTC. Will remain 1% for those 50 BTC and below This is ridiculous. The edge should be the same for any bets. Period. If you dont want the swings, dont open a casino. Its a gamble. Not "lets jack up the odds for a big bet because we are scared" Disagree. As I said before, I could imagine a simple 2-tier system: 1% for bets up to 50btc, 1.5% or 2% for higher bets. Advantages: easy to understand, so probably won't chase away many customers, and will reduce the wild swings we've seen. Personally, I'd say go back to 1% max bet. But I'm not absolutely commited to that one... |
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Can I add my 2 cent to this discussion? I'll break it down into separate points:
(1) Don't change too much too fast, i.e. don't overreact. There is no compelling evidence of cheating yet that I have seen, so the default assumption should be to trust your methods that have been show to be trustworthy in the past.
(2) re: how to implement higher house edge. Why not introduce a really simple 2 tier system, and let it run for a while (2 weeks maybe) to see how it works. Say, 1% for bets <50, 2% for >= 50.
Also, don't be fooled by him "showing that he can win even with smaller bets" (I mean the chat log you posted) ... that might actually be him trying to convince you to get rid of the new rule, because it hurt him.
(3) I'm sorry if the following question was answered earlier (I didn't read through the entire thread, it's huge), but did anyone already calculate the probability of nakowas (and aliases) *total* profits, assuming that the RNG works as intended? It might help to put a number out there to show people investors: "see, his wins are lucky, but not *extremely* lucky".
EDIT: aaand I'm too late, it seems :P
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There is the house edge providing positive expected value to investors, just like dividends for stocks. Investors however are less concerned of dividend risk, but on total return of capital after the investment is sold.
The line between an investor and gambler is blurred, but there are some levels of risk appetite typical for them. Investments have annualized return volatilities of roughly 1-10% for bonds 10-40% for blue chips, a return volatility above 100% is rather gambling.
Assuming gambler on JD play >50.5%, then the volatility is proportional to Sqrt[n*0.505*0.495] for n rolls.
An investor into the site has an annualized volatility of return of about betsize/bank*Sqrt[betsperyear*0.505*0.495].
Note that with varying bet size or bets other than >50.5% the volatility increases, therefore next calculations are lower limits of the actual volatility.
The expected number of bets per year extrapolated form today's stat is: 521890, the average bet size before Nakowa were: 8.1 BTC, bankroll was around 50,000.
An investor faced annualized return volatility of at least 5.8%.
After Nakowa the average bet size is: 90.1 and bankroll is 30,000 that leads to at least 108% return volatility.
Investors are gamblers now, therefore I disinvested until doog reduces the max bet size with a magnitude.
Interesting. Thanks for posting this. But I wonder, isn't reducing max betsize only a moderately effective solution? Say *max bet size* is reduced to a tenth of its previous value, but as a result *number of bets increases tenfold* (not completely unlikely). Then, according to your formula, return volatility is reduced only by a factor of about 3 (/10, *sqrt(10)). |
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German Sparkassen seem to work.
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TEH WALLLLLS!!1!
 awww, aggro kitty is totes adorbs!!! |
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Volume weighted average for one day, one week from today. (Gox, GMT)
I'll start.
Monday, September 23, 2013 $127.21
Fun! I'll have to give a bit of a range though... Monday, September 23, 2013: 134$ to 146$ Not too shabby for a week out. Thanks, but not that impressive since I gave a big range. Also, the "reversal", or at least the further drop, that your method predicted more or less happened, good job. Does that mean you will stop posting the results of it soon, hehehe |
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Monday, 2013-09-23, 1d VWAP @mtgox: 133.55 USD
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Judging from the Y axis values, that isn't a log chart. And even if it were, small movements at the bottom of the chart are perfectly visible.
Depends on how exactly the y axis is set up. But the point is moot because you're right, the scale is linear. The only possible narrative to draw from that chart is that Bitstamp volume is flat while Gox volume is decaying to match it. I interpret the approach to this limit as speaking to the meager arbitrage volume between Gox and Bitstamp. Which, given the depth of Gox's order book does not bode well for Bitstamp. It means that Bitstamp is beholden to this arbitrage volume during both high and low volume periods.
Or is it?Arbitrage volume is low because there's not enough profit/too much risk due to the fiat cashout delay on mtgox, plus the actual risk (real or not) of insolvency. I see (mtgox) order book size as mostly unrelated to that, it's a combination of fiat being stuck on the exchange, mtgox historically being the preferred exchange for large traders, and money sitting on the sidelines by those who are out of the loop/simply not interested in the mtgox metagame. Bitstamp order book on the other hand always had a decent sized ask side, but bid size was and is meager. There will be a tipping point where the advantage of the higher depth on mtgox will no longer outweigh the benefits of higher (and more consistent) volume on bitstamp -- only then will market depth on bitstamp match its volume. If mtgox fixes their shit before that point is reached, bitstamp will probably remain secondary, but I don't see any improvements on mtgox so far. ("10 wires per day." Really?) Gox's order book size is unrelated to the arbitrage volume, that was the point. Nothing has changed regarding average volume on Bitstamp. The takeaway is that as volume returns to Gox all we will see is bigger arb channels that still don't get filled. Bitstamp remains no threat to Gox, and as sketchy as Gox is, this does not bode well for Bitstamp. The point. And that was my point: if volume *doesn't* return to mtgox, the status quo is not sustainable. |
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Judging from the Y axis values, that isn't a log chart. And even if it were, small movements at the bottom of the chart are perfectly visible.
Depends on how exactly the y axis is set up. But the point is moot because you're right, the scale is linear. The only possible narrative to draw from that chart is that Bitstamp volume is flat while Gox volume is decaying to match it. I interpret the approach to this limit as speaking to the meager arbitrage volume between Gox and Bitstamp. Which, given the depth of Gox's order book does not bode well for Bitstamp. It means that Bitstamp is beholden to this arbitrage volume during both high and low volume periods.
Or is it?Arbitrage volume is low because there's not enough profit/too much risk due to the fiat cashout delay on mtgox, plus the actual risk (real or not) of insolvency. I see (mtgox) order book size as mostly unrelated to that, it's a combination of fiat being stuck on the exchange, mtgox historically being the preferred exchange for large traders, and money sitting on the sidelines by those who are out of the loop/simply not interested in the mtgox metagame. Bitstamp order book on the other hand always had a decent sized ask side, but bid size was and is meager. There will be a tipping point where the advantage of the higher depth on mtgox will no longer outweigh the benefits of higher (and more consistent) volume on bitstamp -- only then will market depth on bitstamp match its volume. If mtgox fixes their shit before that point is reached, bitstamp will probably remain secondary, but I don't see any improvements on mtgox so far. ("10 wires per day." Really?) |
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If volume was moving to bitstamp, shouldn't it be increasing in that chart? I see it is quite flat…
Volume didn't pick up on bitstamp to completely make up for the loss of volume on mtgox. So overall volume went down. But what appears to be a flat line is actually slightly going up (remember, log chart), *and* it is a near constant volume in overall falling volume, in other words, the relative importance of bitstamp went up. |
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I don't care what anyone else says. I like it.
But if you really want to give them something to complain about, use your systems to produce some short term price calls.
do I hear some bitterness there? anyway, that's what I had in mind earlier, when I suggested the sliding backtest with a 1 day prediction window, , and concentrating on the shorter prediction periods in general (what's the point of a 3 year prediction with a huge range?). It's not about trading advice per se, but about being able to judge where exactly the method went wrong. Also, I am pretty impressed by bb113's method(s) so far, but I have a hard time seeing how we can make our input in here useful for improving it further. So, yes, price calls within a realistic time and confindence interval are probably what would allow us to give more constructive criticism. |
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... They are agents in the market and rather than complain about them it would be more productive to understand their influence by the evidence. So far I do not see a lot of that happening.
I see cause and effect and what I think is evidence, however I may be limited by my own judgment, (the mass less trolling aside) what evidence based influence, are you not seeing happening? To be clear, I am saying that the evidence is not being understood. What I see is that the intermediate price movement has occurred on the basis of an entrenched dynamic, more akin to a damped oscillation than any rational response to news, or any other driver. The only evidence of forcing I have been able to see was on the runup to $166. The rest has simply been a roller coaster ride to an equilibrium, with each swing having a lower volume than the last. Speculation I have seen here seems to anticipate forcing either to the up side or to the down side, but right now I do not see any evidence of that. What happened to your hypothesis of a "sustained buying program by uber-whale, carefully controlling price without pushing it too far in either direction"? Doesn't that count? |
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If you are fine to withdraw via other measures (SEPA, JPY domestic, BTC), MtGox should be alright given you don't mind the premium. Only risk I would see is whether or not they are even liquid in light of the 10 million USD lacking.
Completely separate from customer funds, if Gox collected .5% in BTC fees and .5% in USD fees, and held them as such they would have 257143 BTC and $7,627,194 The question of the actual balances is how much trading they have done, and when? What would we find in Schrödinger's Gox? If Gox sold just 20% of their coin from fees as it came in then those balances look more like: 205,714 BTC and $9,152,626 If it was 50% then... 128,571 BTC and $11,440,775 80%... 51429 BTC and $13,728,924 I'll be that guy and say it: That's still surprisingly little money. If seen in context, I mean. So they earned something north of 10M, and we know about a 10M gap. Doesn't mean there aren't other debts ramped up (lawyers for the coinlab lawsuit, for example). |
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