The statistics would bear that out and it would be caught, then the algorithms altered. It could be a short term loss, but not a long term loss.
Yeah, but why tempting the fate by precomputing the winning numbers for 10 years ahead? Nevada Gaming Control Board wouldn't be impressed. The blockchain makes the Nevada Gaming Control Board irrelevant. I doubt they'll be impressed much at all with Bitcoin  And anyway we can change the precomputed numbers to a new set, basically re-issue new numbers. As long as it's done publicly there is no problem (old bets are valid based on those old numbers, and new bets would be valid based on the new ones). |
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Oh! Heh...well, I figured "Owner is seized" (under External) covered that.
No those are two completely different risks. Seizure of the owner would be effected by some government to stop the operation of SatoshiDICE. Secret leakage would be effected by some non-governmental entity to continue operating SatoshiDICE in a completely predictable manner. Libertarians (like Erik) are particularly easy target for the later kind of the risk. The statistics would bear that out and it would be caught, then the algorithms altered. It could be a short term loss, but not a long term loss. |
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Good luck on your shitty IPO on that shitty exchange, though.
You can't call someone else out for being unprofessional then use insulting language yourself, and be taken seriously. When I'm the one asking for money on forums maybe you'd have a point. I'm not asking for money. I'm offering a trade at terms I've set and those who agree are welcome to trade with me. |
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All Casinos purchase specialty Casino Insurance, which is usually underwritten with cooperation from a bank using a letter of credit / credit line for the casino.
Who backstops SatoshiDICE's cash reserve? What happens if a series of lucky (or unlucky if you're a shareholder) rolls wipes out the cash reserve? With no backstop the betting limit would have to be lowered, and SatoshiDICE would enter a period of very slow growth. And it would be quite vulnerable to a well financed competitor with a larger cash reserve. Customers would leave SatoshiDICE if the limits stayed low for too long. Nowhere is this mentioned in the prospectus...
As mentioned, cash reserve can fall to zero, but can't go negative. In the extremely unlikely even that the statistical variance resulted in this (it's something less than 0.01% chance) ... Your 0.0122% bet address has been won before. Who's to say it couldn't happen again Again, the max is based on the wallet size, so if players win that bet, the max adjusts, and the site continues. It hurts, of course, but the system is resilient and will recover... a player will not be able to make the same size bet until the wallet fills back with funds. |
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Second of all, it seems that many Bitcoiners complain when aspects of Bitcoinland become "centralized"... and yet here we have MPEx as a competing platform to GLBSE and people come out and complain that I haven't listed on the "main" platform. Bitcoin benefits when all of the buyers and sellers can participate in the SAME MARKET. Unfortunately current technology means that we need a centralized place to buy and sell securities. The real solution to decentralizing the equities market is not to have several isolated and competing exchanges but developing technical solutions to federate equities and create a single market with competing service providers. Hey, I hear ya and largely agree on these points. Let's hope we can get there and work toward it. |
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What I don't understand is why S.DICE is going to IPO on this penny-ante exchange instead of GLBSE. I think that Mr. E.V.'s ideological fetishes might be putting the business sensibilities in the back seat. Which is dangerous for investors.
I do have many ideological fetishes, that is true  Business is one of them. I would like to comment on the GLBSE vs. MPEx issue, however. First of all, I love GLBSE, and have good relationships with the people involved there. SD listing on MPEx is in no way a condemnation of the other platform. Second of all, it seems that many Bitcoiners complain when aspects of Bitcoinland become "centralized"... and yet here we have MPEx as a competing platform to GLBSE and people come out and complain that I haven't listed on the "main" platform. I have many goals in Bitcoinland, and one of them is to enrich and nurture the various services. I do not want GLBSE to be the only equity platform. Launching SD elsewhere furthers this goal, but of course I cannot please all parties. In any case, let it be on the record that I'm a big advocate and supporter of GLBSE, as well. A richer, more diversified equity market is good for all of us, I think. |
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The exchange PR insulting potential investors and site operator using "LOL" and similar insults greatly discredit this. Learn some professionalism. Are you 19 or what? Good luck with your IPO. Your behavior has ensured I'll never use your site again. What trash.
LOL.... well... one of us is using our real world identity to conduct business, at least Who are you, again? And LOL is a highly professional term, expressing humor across the web of space that divides us. |
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All Casinos purchase specialty Casino Insurance, which is usually underwritten with cooperation from a bank using a letter of credit / credit line for the casino.
Who backstops SatoshiDICE's cash reserve? What happens if a series of lucky (or unlucky if you're a shareholder) rolls wipes out the cash reserve? With no backstop the betting limit would have to be lowered, and SatoshiDICE would enter a period of very slow growth. And it would be quite vulnerable to a well financed competitor with a larger cash reserve. Customers would leave SatoshiDICE if the limits stayed low for too long. Nowhere is this mentioned in the prospectus...
As mentioned, cash reserve can fall to zero, but can't go negative. In the extremely unlikely even that the statistical variance resulted in this (it's something less than 0.01% chance), it would mean I'd simply put more cash into it and then get it moving again. It's too profitable to just let it sit there. Not mentioned in the prospectus because it seems obvious to me, but I probably should have discussed this. |
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But where's the running balance? Nothing in the prospectus talks about the size of the cash reserve, or discusses the probability that SatoshiDICE will "go bust" (which is unlikely but still a nonzero chance). If the dividends are paid out every month what happens to the cash reserves? How often are the betting limits reduced on account of liquidity? What's the long term plan for raising the betting limits? A lot of unanswered questions here! I think people are getting caught up in the glamour and hype and are forgetting basic due dilligence!!!! 1) Running balance of the wallet is not public (though I could make it such). It's held in a handful of online (hot) wallets and offline cold storage. The balance is thus the sum of these accounts... as of this second, it stands at 7,302 BTC 2) SatoshiDICE cannot go bust. It's algorithms change the max bet sizes in real time so that in a world where the site lost every bet forever, the cash reserves just fall toward zero asymptotically. It can lose all the money in cash reserves, but never go into debt. 3) Dividends paid out come from new profits, and don't reduce cash reserve below the level it was at in the prior month. Betting limits rise and fall constantly based on statistical variance. Betting limits are very high right now, and I do not intend to raise them further - though if I wished to, I can at any time put in more capital for this purpose. 4) Are there a lot of unanswered questions? I think I've been quite good about answering them all, no? And yes, due diligence is extremely important. I'm hoping people at least read the full prospectus before posting here, because lots of questions are likely answered in that document. |
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Do not get my wrong, I hope you guys sell out, it would be nice to know people are willing to wait 15 years to break even. I just sadly do not think that is realistic right now. We will see.
Wait 15 years to break even... what are you talking about? If SatoshiDICE didn't grow at all (which it will) and you were never able to sell the share (which you can), then it would take about 10 years to break even. Maybe he talks about actual profits (65 BTC daily), not some mysterious "expected" profits/earnings (4,798.63 BTC x 0.019). You know, E in that P/E ratio is called Earnings, not r Evenue (for a reason). You're happily calling your revenue as your ("expected") profits/earnings. Profits/earnings is normally something you get after deducting expenses which, btw., include advertising costs which "will be increased to between $500-$1,000 per month" (from "$100-$300 range") therefore weakening your E and making P/E ratio even higher. So people, please stop using P/E 10 when speaking about this IPO, since the correct P/E ratio is 15 (345,000 / 65 x 365). Since the site will grow, and since you can sell your share whenever, the equation changes substantially. A conservative estimate with a doubling of site revenue within 2-3 years means you'd have made 100% within 1-2 years because the stock price would double to maintain the same 10x p/e valuation. The attractiveness of such an investment to professional investors should be apparent.
No, it doesn't mean that. Again, you're speaking about revenues and totally forgetting (rising) expenses. Secondly, P/E ratio can and most likely will change over time, reflecting eg. changes in business environment and profitability of your venture or simply due to changes in stock/market price. P/E isn't some static figure you can shove down your "professional investors'" throats and make them follow it blindly, but a dynamic ratio which measures a variety of factors reflected either in stock/market price or earnings of your venture. Inability to both understand this business dynamic/logic behind P/E ratio and distinguish revenue from profits/earnings is alone sufficient reason for me not invest in this venture. Cedus, you're confusing yourself. See figures here: https://docs.google.com/spreadsheet/ccc?key=0Aiec3-Eo_yO5dG5SQklHZG4wRm1GMW9DRWpMMW5UQkE#gid=0Avg. daily revenues: 4,798.63 House edge: 0.019 Avg. profit per day: 91.17 btc (this is profit, not revenue) Projected profit per year: 33,278 (again, this is profit, not revenue, and assumes ZERO growth) IPO will raise capital at roughly 10x P/E ratio based on that above figure. |
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SatoshiDICE pays for every transaction it makes. To date, it is the largest supporter of miners in the bitcoin economy. The majority of all mining fees ever have been paid by SatoshiDICE.
Where can we audit the BTC cash reserves? This thread is a good place to start - people have been auditing SatoshiDICE since it started https://bitcointalk.org/index.php?topic=80312.0 |
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Gah.... again, the site valuation is based on NOT assuming growth, but on current revenues/profits. If "parabolic growth" occurs, then great, but it's certainly not an assumption. The offering makes financial sense for an investor even with near zero growth. With no growth, the "investment" takes 10 years to pay off. Again, please check your math. In 10 years, you would have doubled your money just from the dividends assuming zero growth. That's very different then "paying off" in 10 years. |
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As far as I know Erik operates out of UAE, or some such. I saw a U.S.A. phone number so assumed he was in the states. Wouldn't being located in an Islamic country be yet another investor risk? He works for BitInstant in NYC and is a member of the Free State Project (New Hampshire). I'm in Manhattan these days, though I was previously in New Hampshire, and before that was living in Dubai and may move there again in the future (since the US sucks). For anyone in NYC by the way, we're having a big Meetup at our new office on Wednesday evening, lots of cool dudes will be here: http://www.meetup.com/Jekyll_Island_Bitcoin_Society/events/77229272/ |
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Maybe I would invest into this but being on MPEX is risky as hell and I don't want to support spamming of the blockchain with huge amounts transactions either (my SSD drive has only 128 GB).  SatoshiDICE pays for every transaction it makes. To date, it is the largest supporter of miners in the bitcoin economy. The majority of all mining fees ever have been paid by SatoshiDICE. |
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The site itself is simply a fancy front entrance. True. However, the expectation of parabolic growth comes not from an increasing stream of gambling "tech nerds", but from the mainstream exposure generated through advertising. Gah.... again, the site valuation is based on NOT assuming growth, but on current revenues/profits. If "parabolic growth" occurs, then great, but it's certainly not an assumption. The offering makes financial sense for an investor even with near zero growth. |
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However, A company dealing purely in BTC is ultra-risky compared to traditional investments. Therefor, a P/E of 10 seems unwarranted.
Well, normally, companies that have large growth potential have high P/E's (15-50x range) and companies that have little growth potential have low P/E's (5-12x range). Based on its growth potential, SatoshiDICE should have a higher P/E than what I've priced it at. With that said, I understand all Bitcoin companies are high risk and thus perhaps a lower P/E is warranted, so that's what I did. I think in any case, the argument that at 10x P/E ratio is "way out of line" is silly. It's a conservative valuation for one of the most successful bitcoin businesses that has ever existed. Bids have started to stack up on MPEx for these shares already. Of course, if the marketplace doesn't have the appetite for all the shares, then that's okay, for I'll just keep the shares and the revenue (it'll make the negotiations with the Macau gaming companies easier ). Though, the Bitcoin investment world could do well with some "reasonable investments based on proven, transparent business models" as opposed to fleeting 7% per week shenanigans. |
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I would love to have a pice of s.dice, but the deal sucks for everyone else except for you. And I can't see how the company would keep it's value when bitcoin rallies against the other currencies..  thumbs down. LOL how does the deal suck? Cause it doesn't make 7000% per year? Man people have been spoiled And, as mentioned, SatoshiDice volumes have GROWN while BTC appreciated against the dollar, meaning when the BTC was 2x as valuable as prior, the site had grown nominally in BTC, thus the actual growth of the site has been tremendous. Dividends are paid in BTC, so the extent to which BTC rallies against dollars is not as important as you're making it out to be. |
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Thread crapping? Transparent indeed. LOL... Looks like you guys have realized it's time to cash in and exit. I guess you are looking for fools, who do not understand how absurdly bad this offer actually is. A) It is transparent. Every piece of accounting happens on the blockchain (all bets, profits, loses, etc). It's as transparent as a company could possibly be. B) Exit? You don't know me very well. C) The offer won't pay you thousands of percent interest per year. It will pay 10% per year assuming zero growth in userbase. If you want unrealistic long term profits, talk to Pirate, because I don't know how to do it. |
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In major markets I think a low risk growth stock with a P/E of 10 is what most would consider a 'bargain.'
A low risk growth stock with a P/E of 10 would indeed be a bargain. But the catch here is that SatoshiDice is so easy to copy that it may not be a growth stock. An astute observer may realize that by offering shares, it becomes an interesting bet to simply buy shares of SatoshiDICE instead of build it all over again and hope to outdo its marketing and brand exposure and business relationships. Not many understand that SatoshiDICE has achieved certain things which are very hard for new entrants to overcome, I won't go into all the details but examples like the 6 of the top 7 Bitcoin addresses, the massive word of mouth advertising, and integration with Blockchain.info's wallet (and soon, mobile app) are relevant. You can spend a few thousand BTC to build a competitor and try to take a few percent market share, or you can spend a few thousand BTC and own a few percent of SatoshiDICE itself. If you throw in costs of time, dev resources/opportunity cost, statistical modelling and security risks which SatoshiDICE has already accomplished, and the decision shouldn't be too difficult. Edit: Also, an astute observer will realize that after the IPO, SatoshiDICE will have a war chest with which to battle any competitors into submission. |
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This reminds me of the FeedZeBirds asset, which was also a profitable website and after the IPO they seemed to have stopped working on it without paying a single dividend, because other projects became more important  TL;DR S.DICE is overvalued - company should improve its management A) FZB is nowhere near as profitable as SatoshiDICE currently is, and FZB did not promise dividends. Investing in FZB is a different strategy for very long term speculation on the price, because a service which enables anyone in the world to advertise via Twitter has serious potential. The future of FZB is likely to achieve a certain development and feature set, and then be sold for far higher to a purchasing company (how and when we seek this is a strategic decision), so owning shares in it long term is a bet on that possibility. B) It probably looks like FZB dev has slowed because we're building some other infrastructure which FZB will be using. |
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