I don't think so.  Everyone still contributes 1% (or 0.1%, according to the recently proposed modification) of their total investment (invested + local) to the max bet.  The guy operating with 90% of his coins in local still gets 1% of (invested+local) matched from every max bet.  The large investor can say "I have a million coins locally", and add 10k to the max profit.  In that case he probably gets 99% of the action.  But he's 99% of the bankroll, so that's fair, right?


Transparency is already an issue.  When a whale wins 1k then loses it back and you end up a little down on the deal, can you see why?  Am I just taking a few coins off and thinking you'll never notice?

I could add an entry to your investment history every time someone invests or divests, showing your new percentage share of the bankroll, but that seems a little much.

I think you're missing the point.  I don't care if they really have the coins they claim to have or not.  I let them risk 1% of their total claimed amount, until the coins I have control of from them are less than 1% of the total they claim.  Then I force-divest them.

It could be that they have in fact invested all their coins, and the other 99% in the "local" storage are a lie.  That just means that they're risking 100% of their coins per roll, and will go bust when the first max bet wins.

I don't think this passes any extra risk onto other investors.  It is somewhat like trading on margin, but with the important difference that there's no risk of slippage when I have to "liquidate" their position.  I just remove them from the bankroll.

The effect I'm looking for is a way that people can risk more than 1% of what they've sent me without making the calculations too complex.  I think this "fractional reserve" idea does it.  Please don't just react to the fractional reserve concept at a gut level.  I don't need to be holding all the coins you claim to be risking 1% of (and I don't even care whether you have them either), so long as I always make sure I have access to all the coins you're actually risking per roll.

2. the investors can't enjoy a multiplied profit from the rise of share price as do satoshidice.com share holders (some of them enjoyed a 32-fold profit!).
 

I've only just woken up and not had coffee yet, but could this be the answer for people wanting to invest more but put off by the CP risk?

Every user has not just "balance" (for playing with) and "invested" (coins actively in the bankroll) but also a "local" balance, which is coins the user holds themselves, but consider part of the bankroll.  On every roll, the site risks 1% of ("invested" plus "local") for the user.  The user's percentage of the bankroll stays constant, since everyone is risking 1%, and it works fine until "invested" shrinks to less than 1% of "invested" + "local" (since the site then doesn't have access to the 1% they're risking).

This allows players to risk 1% of their whole holdings without having to send their entire holdings to me.  They only need to send 1% plus however much extra they want as a buffer.

It's a shame this doesn't appear to address the issue of people who want to risk less than 1% of their investment, because otherwise it looks like a good solution to me.

Example:

Say there's 9k invested.  New investor has 1k BTC but doesn't want to have to trust me with it all.  He deposits 100 BTC and says "there's 900 BTC more where that came from that I'd like you to consider the whole 1k invested, but I'll hold it for now".

I update the investors list to say that there's now 10k invested, that the new user has 10% of the bankroll, and that 900 BTC of his is "local" (to him - need a better term for this).  Then a whale loses 2000 BTC.  Total bankroll is 12k.  New user's 10% share is 1200 BTC.  "local" is still 900 BTC, and so the user is free to withdraw up to 300 BTC if he likes.

He's risked 10% of his 100 deposit on every roll without the site having to do lots of math on each roll, just by storing one extra value per user: "local", representing the amount they claim to have invested but stored locally.

You could replace all references to "invest" with "house". Invest implies some entitlements and can also be misunderstood as shares. Bottom-line the "investors" are just playing the house.

Entitlements: I’ve seen quite a few users trying to enforce their entitlements. "I’m a shareholder and demand the edge&risk be so and so" sound familiar?

Shares: Some might also think that invest=shares like sdice were you never actually lose money. You only get dividends. The share price might fall but you never get fewer shares.

At least change "Be the Bank!" under the invest tab with “Be the House!”. Bank is the old fiat we’re trying to replace

Well thats the big question.  You can register as an MSB with FinCEN but that still doesn't give you a money transmitter license for states.  You have to apply for a money transmitter license in each state.  The process almost never takes less than a year... unless they somehow became an agent of an already registered MSB/money transmitter.  

Just sent .25 BTC to 1Dp2MLMRKJKQAQuFeWYWKYUN3JJSJ6FGeT  Please confirm.

I enjoyed watching you.  You made 5182 bets, wagered 21,506 BTC, and ended up with a profit of 0.00000000 BTC.

Here's a chart of just your play from today:

I'm considering two different things there:

1) Make two sites.  But what's the point.  Rejected.

2) Allow variable levels of risk.  You only risk 0.1% of your investment per roll, only contribute 0.1% to the max bet, but only get 10% as much exposure to all bets as if you risked 1%.

2) is quite different than saying "I want my fair share of bets up to 10 BTC but nothing any higher".  It is saying "I don't want to risk 1% of my investment on the big rolls and am prepared to get less of the small rolls also".

I imagine Deprived would be in favour of having 2) implemented, but will let him speak for himself.

That would be 3,000 btc ($270k) while returning 60,000 btc - 3000 btc = 57,000 btc ($5.1 million) to investors.

I must admit, that looks good too.

He could easily add 2% management fee though, if invested capital stays steady at 25,000 btc that would be an extra 400 btc that he earns for sure while returning the same profits of 57,000 btc to investors but not returning 25,000 btc of original capital but 24,600 btc.  

Heck it's too low to even bother, he could ask 4% management fee per year (0.01% per day), giving him 3 btc per day, or 1000 btc per year, and returning 24,000 btc to investors instead of 25,000 btc.

If the site is in the red for half a year he makes at least a living.

7/3/13 @ 16:16 PDT = 7/4/13 08:16 JST.

Bounty up.

-EP

Reread the bounty conditions. It was for withdrawals initiated after the 4th of July. Yours appears to be initiated on the 3rd of July.

I agree that percentage on the funds under management sucks for the investor but as dooglus said in some other thread 20% of nothing is nothing.

I think there is a good reason why there are no money management companies that charge only a percentage of the profits. If it would work we would long have seen it.

You can't run a business with months or years of no income and stay motivated. It might also push you to take unnecessary risk with the capital.


Let's not forget that dooglus his most important job is as a custodian. He needs to safeguard the money on a daily basis. Not losing that comes before making a profit.  

A custodian is payed with a percentage of what he safeguards.


I think therefore that a percentage on funds under management should come first and foremost. And indeed he should get a bigger stake of the profit so that he becomes also rich if he makes the investors rich.


I'm thinking out loud here but if he were to charge say 2% per year on the funds under management, charged daily, and raise commission to 10% of profits.

That would give him an income immediately of 25k x 2% / 365 days (= 0.005% per day) = 1.4 bitcoin per day. It's not a lot but it pays some bills at least.

And if he succeeds to double the money that would be 25k btc profit ($2 million) x 10% = 2500 btc ($200k) making him rich - if - he does that many times over and continues to make profits in BTC. (In contrast to Mr Voorhees!)


I also don't like to see fixed management costs being added but right now I get the impression this is not working for him nor will it make him rich, even if he succeeds.

I hear you man.

Trades on mpex the past month look like some heavy insider trading for millions of shares, making the people that sold for a much lower price almost half of the mpex shares.

Erik, was this you buying up or one of your friends with inside knowledge?

Losing a week wage in 5 minutes, arrghh Celeste is a maniac... Anyway, the feature allowing investors to choose what part of their investment will people bet against would be very appreciated. I have done some simulations and the current setup means that if the site has bad luck and there are whales this crazy, we can all be down for months with a pretty decent probability. I mean, I don't mind, but I am sure there are more risk averse investors out there...