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Whats to stop "investing gamblers" from taking on a high risk with a 1% edge instead of gambling with -1%?
I feel like these people could invest like 50 btc, say they have 5,000 and gamble with a 1% edge. If enough people do this it will hurt the normal investors, who will either have a significantly reduced investment % while these people are gambling, or have to increase their risk themselves to keep a reasonable return... And everyone increasing their risk, increases the risk on the websites bankroll.
To take an extreme example, what happens if 10 people are invested in the website with 10 btc each (100 btc is physically on the website), and claim to have 990 in reserve bringing the websites total bankroll to 10,000. A winning max bet of 100 will wipe out all the investors reserves and the websites bankroll is now bust.
The way I see it:
1) Real investors will have their % of bankroll diluted by people gambling on investing.
2) Real investors will either accept this lower return, increase their own risk, or withdraw.
3) Overall the website's bankroll will probably be under more risk.
4) Wagered volume decreasing as people gamble on the investing side with a 1% edge instead of a -1% edge.
note: its entirely possible I'm misunderstanding part of this discussion
