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341  Economy / Gambling / Re: Hi, guys, I (NAKOWA) was beaten. Lost 5k BTC in two days (Still UP). on: September 27, 2013, 04:50:07 PM
342  Economy / Gambling / Re: Hi, guys, I (NAKOWA) was beaten. Lost 5k BTC in two days (Still UP). on: September 27, 2013, 04:44:10 PM
Don't feed her, Dooglus, that will only strengthen the unbearable lust she feels for you.

Instead, you just need to let her down easy.

Or... Maybe you two could "partner up", "merge assets", and "start a new baby".

Call it;
And stop all the drama.
343  Economy / Gambling / Re: Hi, guys, I (NAKOWA) was beaten. Lost 5k BTC in two days (Still UP). on: September 27, 2013, 04:18:31 PM
Holy Cow!, while I was looking around allover's profile I found out something astonishing!
Stay puckered, I'm about to blow this case wide open.

Gender:   Female


This was all a ploy to get Dooglus' attention! Nakowa is attracted to Dooglus! -sexually-

That is really cute and all, but do you have any idea how many pairs of investors underwear needed to be thrown out after this little flirt festival? I don't have an exact number but my guesstimation is; Alot.

If you wanted to get his attention you could have just sent him a picture of your feet. (I bet he's a feet person.)

Oh but what am I saying, that is so romantic!

Sure I don't have any proof, but it's very UNFAIR to be a woman and play on Dooglus' site. Heck, I am straight dude, and I'VE got the hots for the Doog. A woman doesn't stand a chance.

And what are the flipping odds? A woman on just-dice that doesn't want to get into Dooglus' pants. HAH! I don't think so. You think I'm gullible or something? I'm onto you, Nakowa, there's no denying it any longer!

Follow your heart, stop all the bickering. Kiss and makeup. You know you want to.
(I want you to.)
344  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 27, 2013, 12:50:59 PM
That could work.

Thanks for the response.
345  Economy / Gambling / Re: Hi, guys, I (NAKOWA) was beaten. Lost 5k BTC in two days (Still UP). on: September 27, 2013, 12:34:34 PM
I'm not sure you understand what that word means.

Unfair means that a rule or action applies to some people and not to others. In what way was the change "unfair"? Everyone is playing by the same rules.

What is even more hilarious is that the change protected you from the larger losses you almost certainly would have had.

The pendulum swung against you, and you should have stopped while you were ahead. That's on you buddy, that has nothing to do with Doog or anyone else.
346  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 27, 2013, 12:20:30 PM
Ripple may wind up being predominantly used between payment systems rather than between users directly.
Could you expand on this? I'm not sure I follow what you mean.

You think that Ripple may only have Gateways?

As people find the Ripple network useful, we hope they'll contribute the features they most need or want.
I think most people expect OpenCoin to handle the development, as our understanding is that development was supposed to be funded by XRP.
If that is not the case, then it's more probable that voluntary efforts will be put behind something without the premine. I hope you don't take that as a personal insult, that's just where the incentives lie.
347  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Invest in 1% House Edge Dice Game on: September 26, 2013, 04:51:22 PM
why are people so obsessed with tiers? why can't it be continuous?

I think if you walked through the algorithm I proposed, you could see very clearly why having a substantial amount of tiers would add significantly to the computations.

Every step down in the tier requires a new reiteration across the users in every tier above it.
348  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Invest in 1% House Edge Dice Game on: September 26, 2013, 04:14:05 PM
This is how you do a sliding scale:

1.) Max return is whatever the highest investor(s) is willing to lose. Doesn't matter if it's percentage or a literal number.

Edit: A lower tier could possibly crowd out a higher tier, but I don't think that's a problem. They would just get lumped together in the payout.  Undecided
Edit2: Removed the stupid.
Max Return = (Tier1Limit*Tier1Bankroll)+(Tier2Limit*Tier2Bankroll)... etc
Max return = (.0025*2000)+(0.005*2000)+(0.01*2000)

2.) If a gambler loses the bet, divide the sum by the number of "tiers" that intersect it.

All investors have 400btc stake, and there are 5 investors in each tier.

35 btc max return, and 35 btc lost by the gambler.
1% tier = 17.5btc

.5% tier = 8.75btc

.25% tier = 8.75btc

Note: Tiers do not necessarily need to be percentages.

Edit: Also, the distribution could be very different due to different bankrolls in the tiers.

3.) The top tier is divided among the top investor(s) in proportion to their bankroll.

4.) Each following tier is divided equally among every investor in the tier and all tiers above, in proportion to their portion of these tier(s) bankroll.

Continued Example:
1% tier would yield 3.5 bitcoins for all 1% investors. 17.5*(400/2000)
.5% tier would yield .875 bitcoins for every tier .5% investors and tier 1% investors. 8.75*(400/4000)
.25% tier would yield .58 btc to each .25% investor and all tiers above.  8.75*(400/6000)

.25% investor --> .58btc
.5% investor --> 1.45btc
1% investor --> 4.95btc

The losses propagate samesies. Each person gets a return/loss in proportion to the amount they "contribute" to the bet.

My example doesn't quite come out to 35, because I did some rounding for brevity, but that's the idea. While theoretically you could have an arbitrary amount of tiers, you likely would want to limit them.

Edit: Updated numbers to something more realistic.
349  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 26, 2013, 02:31:43 PM
So if I get you correctly, your reasoning is that 1:1 "rippling" of IOUs (e.g. I trust A.BTC and B.BTC and can end up with either of them) is bad, since one would better need to make an explicit market order to trade IOUs than to implicitly exchange them.

I fully agree on this, this is also the most discussed bug report in the ripple client about this issue ( Ripple in its classic idea (everybody is a gateway) would probably die out if this was not enforced or change (evolve?) to its current state where IOU issuers are relatively rare and realtively well known and established entities.
Woot. Mission accomplished.

There are remedies against that though:
Partially: setting OutputQuality to something else than 1:1 and keeping a low balance to limit potential losses and earn a small fee in the mean time - doesn't protect against catastrophic failures.
Fully: setting the tfSetNoRipple flag on your trust lines ( so your IOUs will never be implicitly exchanged. You can still act as liquidity provider, but only via explicit market orders, not implicit trust line rippling.
OutputQuality is a dead end, but if "tfSetNoRipple" makes it so "your IOU's will never be implicitly exchanged", then that could definitely be a fix, but as vinniefalco (aka MrBiggs) says, this aligns with the "new Ripple" and doesn't mesh with the idealist fantasy that was the original Ripple, which is what my OP was all about.

I had virtually no respect for Vinnie until I read that conversation, thanks for pointing that out.

As this is already possible for quite some time, and only VERY few people use this possibility, there is either the option that it is too complex to do this (one could fork a "no-rippling" client though) or that the majority of Ripplers actually disagree with you on this threat.
Well then the majority of Ripplers are wrong. Smiley

Anyways, as I said, it is possible to use Ripple without this for yourself - and if others take that risk knowingly, it is their problem frankly.
I agree, but the problem with the way Ripple exists now is that they take the risk unknowingly.

Edit: And I also don't like calling it a risk. Accumulating less valuable IOU's in Ripple in which Liquidity Providers exist is about as risky as getting wet by being thrown into the Atlantic.
350  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 26, 2013, 01:52:55 PM
Then why does the price of BTC change that much if not that much happens in the BTC-ecosystem? Why do bubbles happen if everything is valued upon usefulness alone?
The reason there could be fluctuations in value absent any external pressures is because value is subjective, and people have preferences that change from day to day.

Again, please provide a small sample network that clearly demonstrates your point of failure, as I fail to see it honestly.

I do enjoy your criticisms Sukrim, you are a very reasonable person. You may have thought I slunked off because my argument was defeated and I was trying to save face. Alas, I do not have such self respect, and also I'm not wrong. I was just distracted by the craziness over at Just-Dice, and learned several terms I'd never even heard before; Variance and Kelly criterion. Good times.

So your counter argument, you'll correct me if I'm wrong, is that users in ripple all have contracts with the Gateways that distribute the IOU's that users trade among themselves. Therefore, there is no contractual, or calculation problem because the users already made agreements with the Gateways that they like, and can even charge interest depending on the riskiness that they perceive in a particular Gateway.

Alright, that's cool. Again, the problem is not the relationship between a particular user and a Gateway, the problem is in between users as Liquidity Providers. I can give you two problems that can't be solved as long as Liquidity Providers exist.

The problem of changing markets.
Gateway A --> Group AB <-- Gateway B

Group AB is a group of people who all agree to transact with IOU's from A and B. They have all extended trust lines to A and B.

So far so good.

The problem arises among the relationships in Group AB. There are indeterminate trust lines extended every which way determined by the trust each person has with their immediate neighbor.

The abuse arises when something happens to Gateway B, and the network begins dumping those IOU's in exchange for Gateway A's more valuable IOU's.

Unless a user is paying extremely close attention, his account is going to accumulate less valuable IOU's without any notification to him.

In that way, the most trusting people in the system get stuck with IOU's that are less valuable.

Why does this happen?
Because the value of IOU's cannot be accurately automated along liquidity providers. As value changes, IOU's are dumped on the gullible/most trusting, who can't react fast enough.

Propagation of Inappropriate Trust
Trust in the real world is often extended irrationally. Often friends, family, and boobs garner more trust than intelligence, experience, and discipline.

For example, a businessman might trust his drinking buddy with $3, and the businessman's boss in ripple trusts the businessman for $10. The drinking buddy could borrow, through the businessman, $3 from the boss.

Notice that it doesn't matter at all that all three of them trust the Gateway (bank), that's not relevant.

These are small amounts, but when these bad debts are rampant through the system, the only solution is to either not trust anyone, or else make the trusted amounts so small that it's not too painful when the inevitable defaults occur.

If the argument to fix this is to reduce the trust lines to tiny amounts and let people borrow from huge amounts of people in order to do exchanges, then as soon as the amount that can be transferred in this way reaches any substantial amount, someone is going to game the system and run with the booty.

As a result, the trust lines have to be useless in order to not be dangerous.

Note that it's true that trust lines will shrink in response to this. The businessman will probably cut trust from his drinking buddy if it becomes a problem, but that doesn't counter my point, it reinforces it. The trust lines have to be short in very small amounts, or not exist at all in order to avoid ending up trusting someone that isn't really trustworthy, because it's very hard for a casual user to extend trust lines appropriately.

Edit: Technically speaking, as Sukrim points out, you can't do this because a user can't be a Gateway. (Trying to follow all these caveats is enough to give a person a migraine.)
Suffice it to say, the problem still exists, but instead of borrowing, the drinking buddy might transfer something that is less valuable through some kind of knowledge advantage (insider or otherwise). It gets complicated...

Why does this happen?
For the same reason I lined out in the opening post. The value of IOU's is different depending on who is getting the IOU.
There is not enough information in consecutive parties to issue IOU's appropriately.
351  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Play or Invest : 1% House Edge : Banter++ on: September 25, 2013, 08:40:24 PM
352  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Play or Invest : 1% House Edge : Banter++ on: September 25, 2013, 06:42:23 PM
Hope the site owners comes back to their senses after having read this:

I assume you stopped reading at the heading, "Reasons to bet less than Kelly".
353  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Invest in 1% House Edge Dice Game on: September 25, 2013, 02:32:27 PM
Agreed. Max bet at 1% was the only real chance of Nakowa going busto when he starts with his 300BTC bets.

Why not raise to 2% and get this over with. Sure would be entertaining!
354  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Invest in 1% House Edge Dice Game on: September 25, 2013, 02:00:53 PM
I'm not having any fun watching Nakowa anymore!  Tongue

I think lowering the max bet was the right move. If that didn't change, there would only be a modest reduction in these wild swings as the bankroll increased (If it even would increase!)

Improvements to the site:
1.) Be able to block certain people in the chat.
2.) Chat Rooms.
3.) Preferences to change the size of bets you want to see announced.
4.) Don't display investor information to bettors. (House budget/profits.)
5.) Make clicking a user name display a donation address, so if a big winner wants to "rain" he can, but users wont have to spam addresses.
6.) Maybe reset the profit ticker? Somewhat controversial, but if the max bet is kept low, the site is probably going to be in the red for quite a while, and this pushes away potential investors.
7.) Introduce an api for bot makers and such.

That's my two cents anyway, as someone that has no stake in any of this.

Also! I didn't see any investor rage (At the 5k loss), I am disappoint. Though I guess selection bias was kicking in. (Those that were put off by the variance were gone already anyway.)

Edit: Though you can also see selection bias kicking in with the cap reduction.
355  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 24, 2013, 04:46:54 PM
What are you talking about?  "Photocopy the contract?"   Grin  Why would an IOU issuer create 8 different $1 IOU's to represent an actual $1 asset?

You're missing the point, but to answer your irrelevant question for giggles;
356  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 24, 2013, 04:36:36 PM
I don't know why you're talking about loans.  Nobody is talking about loans.  Legitimate IOU's are backed by actual assets.

If I trust Bitstamp, you trust bitstamp and 8 other people trust bitstamp we can pass a $1 USD IOU from me, to you and all other 8 people with no issue because the actual asset that backs that $1 actually exists at Bitstamp.

Yep. If someone photocopies a contract 8 times, distributes it among 8 people, and they all sign it, those 8 people could trade those contracts around and just replace the signature with their own.

Each person creating a new IOU before they pass it?  I don't even know where you got that from.

Says who?  Some gateways will only be gateways and some will actually be market makers as well.  This is where you can determine who is best for you to do business with.  
If "Market Maker" = "Liquidity Provider", then no. It's not going to happen.

Should not have bothered...

One major drawback of Ripple is that it relies on clients to maintain lists of nodes that are trusted not to collude.
There is a kind of grandeur that creeps into their naiveté. It's like the Voynich Manuscript; everything is so nonsensical that one starts to imagine that it must contain some novel insight that the reader is just missing.

Also like with the Voynich Manuscript, if such an insight does exists, no one can find or understand it.
357  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 24, 2013, 03:58:33 PM
Seeing that you continue to fail to recognize that you can't be forced to accept someone else's IOU's that you don't trust...
You and graceza have made this objection after I've rebutted it as a Red Herring, and I'm not sure how I can be any more clear about it.

Imagine that the IOU was a written contract that is literally passed down line of people.

The contract says, "I [name] owe [name] [principle amount]".

I'm saying, "That's not enough information to make any kind of rational loan."

You say, "But wait a minute, each person in the line creates a new IOU and passes that onto the next one, the first person in the line doesn't make a contract with the last person in the line."

I say,"That's a red herring, that doesn't have anything to do with my objection. The asset holder here at the end of the line can't make a rational decision about the loan based on, 'I [name] owe [name] [principle amount]'. It doesn't help that he knows and trust the person next to him, because even he doesn't know the objective, length of the loan, collateral, or credit rating of the actual borrower."

You say, "No it isn't."

I say, "Yes it is."

What else can I say?

Then you really go into the woods. You bring in an outside party from the line (A Gateway), and say, "Look, the last person in this line can lend to this guy (the Gateway), and there isn't any trust problem."

Of course there isn't. I didn't say there was.

The contract between a Ripple Gateway and the user can be as nuanced as the Gateway and lender like because the Gateway is not a Liquidity Provider.
358  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 24, 2013, 02:03:36 PM
Well, an IOU of for example 1 BTC will likely be worth a value between 0 BTC (issuer = defaulted/fraudster...) and 1 BTC (100% trustworthy issuer). Values above that are of course possible but unlikely.
A common example of an IOU worth something higher than the principle is a CD or Bond.

Your argument is now that it is hard to determine a proper amount to value this 1 BTC IOU. This is true however for any IOU and has been this way for millennia.
The difference is that for millennia the lender and borrower had a direct relationship and the lender could make an accurate determination of the risks he takes on when he lends by getting as much information as he can from the borrower. He can also determine the interest that would make it worth the trouble.
In ripple, this relationship is severed, making accurate determination impossible, rather than difficult.

Two consequences of this jump out at me;
1.) Trust lines will be determined by how much the lender is willing to lose, no questions asked, without notification, and without remuneration.
2.) People can and will abuse this system, and all of the most trusting/gullible will suffer the most from it.

As a direct result of this, trust lines -if they exist at all- will a combination of extraordinarily short and in tiny amounts.

It is my belief that 1 BTC (on the blockchain, as an asset) has exactly 0 value ... BTC is not based on their inherent value but rather upon their usefulness as money and store of value.
Everything is valued based upon it's usefulness, not its "inherent value". When Austrian Economists talk about intrinsic value, they are only referring to the intrinsic properties of the item in question that has value, subjectively, to certain people.

Your argument turned around would be the following: The inherent flaw of digital assets like XRP or BTC is that they cannot be priced by the owner, as they are worthless by themselves...
No, but a different phrasing of my argument would be;
IOU's cannot retain value as they are passed along a Ripple Web of Trust because the terms of the loan, which determines the value of the loan, is vaporized by the first Liquidity Provider.

The solution to both your arguments about rating trust in IOUs and the opposite argument about uncertain pricing of assets is also known for millennia: an open market where people come up with prices and hopefully also match these from time to time based on both their needs/beliefs and other market participants.
That doesn't work because the mechanism by which lenders can make these determinations in the market do not exist in Ripple over Liquidity Providers.
359  Alternate cryptocurrencies / Altcoin Discussion / Re: Why Ripple has failed. on: September 23, 2013, 08:38:52 PM
Hi Graceza.
I already addressed your argument from my other post. Could you address why that response didn't satisfy?

Basically, the fact that the IOU is not literally transferred down the Web of Trust doesn't address the flaw in ripple in which the risk of IOU cannot be adequately judged by the lender.

By "lender" I mean the asset holder, the last person in the chain of trust.

This is the relevant post;

Every single one of your sentences contains either inaccuracies or hypocrisy.
360  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: : Play or Invest : 1% House Edge : Banter++ on: September 23, 2013, 08:19:55 PM
Some guy just won at least 5000 bitcoins on JustDice.
In B4 investor rage.

edit- damn it Professor!
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