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141  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : Invest in 1% House Edge Dice Game on: June 27, 2013, 10:43:39 PM

The issue here is that you will rarely get close to even 10% action on your invested coins, even at 100% risk level.  If selectable risk % is implemented, max bet will go to 1,000BTC.  Mean bet size is currently .0035 BTC. So even at 100% risk, only a miniscule amount of your investment will be at risk.

The goal is to maximize TOTAL exposure relative to TOTAL house BR on each bet with minimal risk of ruin. For the first bet, 100% of BR at 5% risk gets you the exact same amount of action as 5% of BR at 100% risk using model 2.  There are some interesting differences in variance after bet #1 though.  One problem I see is that 5% BR at 100% risk will likely blow that investment portion in a large fraction of max bet events, forcing a manual reinvestment at stochastically determined timepoints. Which would be a PITA.

I'd be happy to continue this discussion in a more private venue.  Tipping off people to superior risk and coin-management approaches seems self-defeating.

Looks like I need to read up on max bet - I'd assumed max bet varied based on the bet so as to be whatever the maximum was that would incur loss to the house of 1% of capital.  From what you're saying it's a fixed amount regardless of which bet is chosen (so X BTC whether they go for a 1 in a million shot or a a 98% shot).  I'd assumed the main exposure would be on people gambling the max they could on the most extreme odds bets.    So if there was 100k of capital (and 1% risk exposure) then 1 BTC would be the max bet with a 1/1000 chance of winning and .001 BTC the max bet on the 1 million to 1 shot.  Mean bet size doesn't mean much (in terms of exposure) without accounting for the odds at which the bets occurred.

And yeah - little point discussing details.  Personally I'd like a very complicated system as the more options there are the more advantage there is to be gained.

Sorry, I was unclear again. I meant to say 'Max Profit'. The max house capital at risk on any given bet is fixed to 1% of house capital (for now), so Max Bet does change based on the odds.
142  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : Invest in 1% House Edge Dice Game on: June 27, 2013, 10:13:22 PM
I considered the other implementation but rejected it as you'd end up with the perverse situation of players running martingales on the investment side where they actually work.  That's the problem with allowing minnows to act like big fish - you can't allow them to risk ANY portion of their balance without also allowing them to change it frequently to make it +EV.

I can't see a 'fair' way to allow different degrees of risk whilst preventing people using it to gamble (and in the process removing benefit from all other investors as well as allowing them to sit at the wrong side of the table for what they're doing).

Do go into detail as to this actually working Martingale, as I suspect it's based on a broken model.

The idea probably goes like this :

Hold the majority of coins in balance.  Invest epsilon at 100% risk, then 2 epsilon, 4 e, etc if you lose.

HOWEVER, >99.999% of bets on the site are not Max Profit bets.  Thus, your investment would not be getting fully at risk each time.  Rather, some very small fraction of your epsilon would, except in very rare max bet events.  Thus, it would not function as a 'house-advantaged martingale'.  Rather it would function as you investing epsilon, and getting 100x * 1% edge * epsilon / house capital = epsilon / house capital returns, rather than 1% * your capitial / house capital = 1% your capital returns.

I am 90% confident that just investing your whole stack at some capital at risk multiplier of say 5x will outperform any house-edge martingale strat.

-Bug

There's two basic models to use for allowing increased risk:

1.  The one you describe - where those willing to risk over 1% only get 'extra' action on bets exceeding 1% of all capital.
2.  Allocating ALL bets based on ALL risked capital - so those who risk more get a bigger slice all the time.



Perhaps I was not clear. I am assuming model 2. 

Quote
You MAY be correct about risking all at 5x outperforming a martingale but it IS the case that there's differences between risking 100% of BR at 5x and risking 5% of BR at 100x.  The detail of the difference varies depending on which model you use - certainly in case 1. my instinct is that risking 100% at 5x is far superior due to picking up 20x as much of smaller bets - though you do then stand the risk of losing the lot over a fairly short series of max bets (though for that to be a real risk it involves an idiot gambling on the horribly priced bets where they're odds-on to win but pay through the nose for the privilege - at the 98% level the house edge is effectively 50% : you only make half the profit on winning bets that you would on a fair bet).


The issue here is that you will rarely get close to even 10% action on your invested coins, even at 100% risk level.  If selectable risk % is implemented, max bet will go to 1,000BTC.  Mean bet size is currently .0035 BTC. So even at 100% risk, only a miniscule amount of your investment will be at risk.

The goal is to maximize TOTAL exposure relative to TOTAL house BR on each bet with minimal risk of ruin. For the first bet, 100% of BR at 5% risk gets you the exact same amount of action as 5% of BR at 100% risk using model 2.  There are some interesting differences in variance after bet #1 though.  One problem I see is that 5% BR at 100% risk will likely blow that investment portion in a large fraction of max bet events, forcing a manual reinvestment at stochastically determined timepoints. Which would be a PITA.

I'd be happy to continue this discussion in a more private venue.  Tipping off people to superior risk and coin-management approaches seems self-defeating.


143  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : Invest in 1% House Edge Dice Game on: June 27, 2013, 08:32:25 PM
I considered the other implementation but rejected it as you'd end up with the perverse situation of players running martingales on the investment side where they actually work.  That's the problem with allowing minnows to act like big fish - you can't allow them to risk ANY portion of their balance without also allowing them to change it frequently to make it +EV.

I can't see a 'fair' way to allow different degrees of risk whilst preventing people using it to gamble (and in the process removing benefit from all other investors as well as allowing them to sit at the wrong side of the table for what they're doing).

Do go into detail as to this actually working Martingale, as I suspect it's based on a broken model.

The idea probably goes like this :

Hold the majority of coins in balance.  Invest epsilon at 100% risk, then 2 epsilon, 4 e, etc if you lose.

HOWEVER, >99.999% of bets on the site are not Max Profit bets.  Thus, your investment would not be getting fully at risk each time.  Rather, some very small fraction of your epsilon would, except in very rare max bet events.  Thus, it would not function as a 'house-advantaged martingale'.  Rather it would function as you investing epsilon, and getting 100x * 1% edge * epsilon / house capital = epsilon / house capital returns, rather than 1% * your capitial / house capital = 1% your capital returns.

I am 90% confident that just investing your whole stack at some capital at risk multiplier of say 5x will outperform any house-edge martingale strat.

-Bug
144  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : FREE BTC : Play or Invest : 1% House Edge : Banter++ on: June 27, 2013, 03:03:44 AM
so is satoshi dice now almost considered the myspace of bitcoin gambling sites yet?

Worse. Friendster.
145  Economy / Securities / Re: S.DICE - SatoshiDICE 100% Dividend-Paying Asset on MPEx on: June 27, 2013, 12:34:54 AM
Dividend day will be coming up soon-ish... anybody have predictions?

4000 Satoshi / share.

Followed by an epic collapse of the share price to .0012
146  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: investor's concerne on: June 25, 2013, 06:22:20 PM
So I figured out that an investor can actually be losing money, even in the long-run, because of the increasing pool of investment.

Say, you invest a certain amount, and the site's profit goes down, so you loose some money.  If the total investment pool stays constant, then all you have to do is to wait: at some point, with certainty, you will regain your investment and make a profit. However, if the pool is increasing, and keeps increasing, then your share decreases and so does your profit. It is easy to see that at some rate of pool growth you will never be able to make up even a small loss.  With the current investment growth, I think the threat is quite real.

So it seems to me some sort of early-investor prioritizing is needed.

just to make sure: I'm not complaining about my investment - I'm up, thanks, dooglus!- just bringing up a concern that one can easily overlook reading the JD faq.
(In fact, I think prioritizing early investors at this point will lower my profits.)

You analysis assumes :

1) You start with a loss. (nearly all current investors are up well over EV)

2) Investment continues to increase infinitely. (this is impossible)

3) Bet volume forever lags investment growth. (extremely unlikely)

All 3 assumptions are wrong.
147  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : FREE BTC : Play or Invest : 1% House Edge : Banter++ on: June 25, 2013, 12:29:16 AM
how much did the player lose?

< 0.1BTC
148  Economy / Securities / Re: [BitFunder] G.MPOE Pass Through on: June 24, 2013, 10:44:00 PM

I would recommend you to do some research. It is not by coincidence that people related to MPOE/BitBet.us etc have an yellow IGNORE button on them. They treat their customers and shareholders like shit. You could also read the owners blog if you want more convincing.

Anyway, I will stop posting on this thread. Please feel free to join the other thread if you want.

I have read many pages on his blog, and he seems to know what he is talking about most of the time.

Please guys
Take this elsewhere!!!!
This thread has nothing to do with this conversation.
Please respect that.

I think it is a valid topic for this thread. This thread is for discussing your pass-through for MPOE, and whether MPOE is a scam or not seems to be a very valid question for any potential investors, since that is where the money they hope to be earning is coming from.

In that case, I will also leave this here: http://i.imgur.com/U50p1sW.png

And the owner even publicly blogged about it, bragging to be the "best customer rep in the world": http://polimedia.us/trilema/2013/i-am-the-best-customer-rep-in-the-world/

So yeah, if you want to a) support a business like that or b) get responses like that when you reach out for them, go ahead and buy some MPOE.

S.MPOE is not an appropriate investment vehicle for the plankton of bitcoin finance (you).
149  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : FREE BTC : Play or Invest : 1% House Edge : Banter++ on: June 24, 2013, 07:39:57 PM
I get that.

I cannot calculate the likelihood of this because I don't know the bet size distribution.  It would take a large number of high bets (0.5-1% of the betting pool) for this to be at all probable.

It seems weird given the fact that there have been so many bets that you would not be closer to a normal distribution.  However, maybe there is a large number of big bets and the rest of the bets are very tiny.



There have been a small number of very large bets and millions of dust bets.
150  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : FREE BTC : Play or Invest : 1% House Edge : Banter++ on: June 24, 2013, 06:38:35 PM
Was this :

originally present in the description ?

I would like to restrict the usage of my money to funding the pool.

Oh, no!  And it's not meant to be there now either!!!  Your investment is absolutely just for funding the bankroll.  I put it there in my local copy of the file while discussing ideas with investors in the on-site chat and accidentally left it there after we had decided that it wasn't reasonable.  Then uploaded the file when I fixed a typo elsewhere in the file.

What I ended up doing to cover the case where I need more to pay for the site is mention that the commission rate can be changed with 7 days' clear notice.

Thanks for spotting this!

I did think that was a bit weird, because following the chat discussion I thought you decided to not do that.  I'm cool either way.  Whatever approach maximizes betting volume while minimizing investors is a win Wink
151  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice.com : FREE BTC : Play or Invest : 1% House Edge : Banter++ on: June 24, 2013, 05:24:09 PM
Was this :

Quote
Your investment may also be used to fund promotions, or anything else the site owner considers to be beneficial to the overall growth of the site's bankroll. Given the anonymous nature of investing, it is impossible to gain consent of all investors before making decisions about how to use invested funds, so I am claiming the right to do whatever I consider best for the site with them.

originally present in the description ?

I would like to restrict the usage of my money to funding the pool.

it was not.

Ok, so then I'll add another suggestion : "when people lend you their money you don't get to change the rules underway", which intersects quite nicely with "make a GPG contract that I can review and hold you accountable against".

but somehow it was considered "too complicated."
I call it simple, issue shares, IPO them, problem solved. Shares are an investment in the management, lending money to the pool is a rational gamble.

And that obviously doesn't prevent from using some raised capital to fund the pool (depending on how the IPO is made and the shares issued), at the management's discretion.

Divest, pool has plenty of capital, it doesn't need yours.  Issuing shares is illegal.  GPG contracts are unenforceable.
152  Economy / Gambling / Re: Just-Dice : Bet Number 2,000,000 Competition : Double Your Stake, Win or Lose on: June 24, 2013, 03:48:38 AM

Congrats Bugpowder!  Smiley

He lost the bet, but won the prize:



Thanks all for playing.  That was fun!

2013-06-24 03:16:57 (1) manually crediting user 14 with amount 2


Maxed out the bonus!

Spent 3BTC winning the 2BTC tho.
153  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice : FREE BTC : Play or Invest on: June 20, 2013, 10:33:24 PM

Bugpowder, there are a thousand ways to structure this without it being illegal. Selling shares of a company has never been and will never be illegal.  I don't know if dooglus has yet taken the steps to incorporate, etc., but at this very moment he has 1600 btc in investments on his site, and that's about $180k. That's quite the number (and more importantly amassed in a single day) to seriously consider structuring it better.

You are not aware of the law. Read up. http://www.investopedia.com/ask/answers/08/unregistered-securities.asp.

Offering shares of any investment vehicle or company without registering those shares with the SEC and being licensed to do so is a felony under US law. Enforcement simply hasn't gotten around to going after these wannabe bitcoin financiers. There are advantages for issuers being located in Romania, less so to being located in US or Canada.

Also, surely most of that investment money prefers the current arrangement and would be withdrawn from the site if it were to switch to your model, which has proven great for siphoning off money from the community into the pockets of share issuers (S.DICE made Erik ~50,000BTC), but terrible for a long term ROI for investors (S.DICE trading at ~60% of tier-1 IPO price).  Shares of bitcoin "companies", with rare exceptions, are for pump-and-dump, get-rich-quick shenanigans.




http://www.investopedia.com/ask/answers/06/privatecompanystock.asp

Also have in mind, noone said it has to be be a US company. Gambling by itself is prohibited under US law, so dealing with any form of SEC is impossible. Plus we are not talking about a public company, this is more or less a startup with a SEED round of investment. Such investments are unregulated by SEC.

Read up: http://en.wikipedia.org/wiki/Crowdfunding

As I said, there are a thousand ways to do it legally.

Neither of those applies.

The investors are not private company employees, and the crowd funding needs to be done thru certain registered exchanges.

Anyway, I don't want to pollute this thread anymore, we can agree to disagree on all of the points.  I simply don't see either the need for nor the attraction of share issuance.  The site attracted 1600BTC of betting pool backing in under 24 hours and has minimal running costs. The current setup guarantees 99% of profits flow back to backers of the site (compare to S.DICE, where 87% goes into the site creators pocket). There is no share liquidity or capital price risk.  There is minimized legal risk and costs. As a potential pool backer, what more could you want?
154  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice : FREE BTC : Play or Invest on: June 20, 2013, 10:09:32 PM

Bugpowder, there are a thousand ways to structure this without it being illegal. Selling shares of a company has never been and will never be illegal.  I don't know if dooglus has yet taken the steps to incorporate, etc., but at this very moment he has 1600 btc in investments on his site, and that's about $180k. That's quite the number (and more importantly amassed in a single day) to seriously consider structuring it better.

You are not aware of the law. Read up. http://www.investopedia.com/ask/answers/08/unregistered-securities.asp.

Offering shares of any investment vehicle or company without registering those shares with the SEC and being licensed to do so is a felony under US law. Enforcement simply hasn't gotten around to going after these wannabe bitcoin financiers. There are advantages for issuers being located in Romania, less so to being located in US or Canada.

Also, surely most of that investment money prefers the current arrangement and would be withdrawn from the site if it were to switch to your model, which has proven great for siphoning off money from the community into the pockets of share issuers (S.DICE made Erik ~50,000BTC), but terrible for a long term ROI for investors (S.DICE trading at ~60% of tier-1 IPO price).  Shares of bitcoin "companies", with rare exceptions, are for pump-and-dump, get-rich-quick shenanigans.


155  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice : FREE BTC : Play or Invest on: June 20, 2013, 09:23:34 PM
Quick question dooglus. When new investments come in, does the equity of current holders get devalued, or there is a fixed equity threshold for investments that at some point will deplete?

Each investor is effectively running their own dice site.  They offer up 1% of their investment to anyone who wants to play against them.  The more invested, the more available for players to win per roll.  I started with near 100% of the bankroll, and now, due to people investing, I have 16% or so.  I still risk the same amount per roll, but the max profit per roll is now 15 BTC, whereas before it was much lower.

When someone bet 1 BTC initially, I got to bankroll the whole bet.  Now I only bankroll 16% of the bet.  In order to risk a whole 1% of my investment, I need people to bet the maximum.

Does that answer your question?

55 2013-06-20 20:23:43 (1) manually crediting user 391 with amount 0.01 TheUntitled
56 2013-06-20 20:24:29 (1) manually crediting user 393 with amount 0.01 infested999



It might be a good idea in the long run to have a fixed amount of equity, so that equity grows in value and can become worthy. For example if I invest 100 bitcoins today which will buy me 10% profit share (valuing the site at 1000btc), and you are profiting 100 btc per month, then in 3 months from now you are profiting 1000 btc per month, and my initial 100 btc investment share would be worth 1000 btc. So not only I have gained dividends from the profit, but also multiplied my initial investment. This will allow future trading of shares of the dice site, and will also bring a higher reward to the early investors who committed their hard earned btc by believing in you and your site. Does it make sense?

"Investors" are not buying shares of the site (issuing unregistered shares of any business or site is totally illegal BTW, expect prosecution of asset issuers within the next year or two).  "Investors" are simply taking a proportion of other side of every bet.  It's a different model, and a much less risky one than sites like S.DICE, where shares have a very significant capital price risk.
156  Economy / Service Discussion / Re: MtGox wires ARE delayed on: June 20, 2013, 06:49:19 PM
Quote
One of the three so-called Japanese "megabanks" (along with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group)

To put it into perspective: the Mizuho bank that provides banking services for this unheard of nonentity you call MtGox among many (MANY) others is just about large enough that MtGox accounts for about five minutes of their volume. Every 25 to 128 years.

It is interesting that a comparatively small amount of wire transfers which came from MtGox customers have caused their entire wire systems API to fail.

Like I said earlier I don't believe it for one minute.

The bank have given out a bullshit excuse. I'd really like to know the real reason behind this.

It's possible (or even probable) that the MtGox contact at the bank also knows nothing about the real reason behind this.

It's also possible Karpelen is talking out of his ass.

On the other hand it's also totally possible that MtGox grew so big they completely overwhelmed the ninth largest financial group in the world. Absolutely possible.....



It's also possible that when the price isn't going up parabolically, they stop getting "1-20 Million $ of deposits a day"   I bet wires go out the minute a new 10,000 BTC bidwall appears...
157  Economy / Service Discussion / Re: MtGox wires ARE delayed on: June 20, 2013, 03:46:33 PM
By now I kinda wonder if the dramatically improved MtGox engine which will be released very soon since Spring will beat to the punch the dramatically improved S.DICE website which will be released very soon since about the same time.

I think that dramatically improved S.DICE site was released last night. They changed the name to Just-Dice.com too...
158  Alternate cryptocurrencies / Service Announcements (Altcoins) / Re: Just-Dice : FREE BTC : Play or Invest on: June 20, 2013, 01:26:47 PM
Over 100,000 bets made (due to Vlees botting), over 2400 BTC wagered, in less than 12 hours.
159  Bitcoin / Press / Re: 2013-06-21 salon.com - Bitcoin tax time ? on: June 20, 2013, 10:23:11 AM

Excellent.  Glad to see that we will have some clarity by the end of the year.

http://www.gao.gov/assets/660/654620.pdf

160  Economy / Service Discussion / Re: MtGox wires NOT delayed on: June 20, 2013, 09:54:02 AM
Well then...

Commence screaming!

I hope my last wire got thru...

TOKYO - JAPAN - June 20th, 2013   Over the past weeks Mt. Gox has experienced rising volumes of deposits and withdrawals from established and upcoming markets interested in Bitcoin. This increased volume has made it difficult for our bank to process the transactions smoothly and within a timely manner, which has created unnecessary delays for our global customers. This is especially so for those in the United States who are requesting wire transfer withdrawals from their accounts.  We are currently making improvements to process withdrawals of United States Dollar (USD) denominations, and as a result are temporarily suspending cash withdrawals of USD for the next two weeks.  Please be reassured that USD deposits and transfers to Mt. Gox will remain unaffected, as will deposits and withdrawals in other currencies, and we will be resuming USD withdrawals once the process is completed.  We apologize for any inconvenience this causes our U.S. customers in the meantime, and look forward to resuming withdrawal service as well as debuting a dramatically improved trading engine which will be launching very soon. 
Regards
Mt.Gox Co. Ltd Team.


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