I hope you also realize that the level of investment during Nakowa's "raid" was still 30k, which means that max. 1/3 of the investor divested, which is quite a big sum (and I guess that made doog very nervous), but the majority of investors (2/3) kept the money on the line, meaning they were OK with the risk.
Totally BS. How can you argue by imagining what other people thinks? You have no idea why they did not divest, and I can see plenty of reasons. It does not mean at all that they were OK with the risk. 3 months: (expected profit) = 20 k btc. Profit = - 780 btc. WTF? Only doog got some cash from JD  Well, Oda is the one saying "investors wanted to go to fractional kelly", and I'm just piling up facts that seem to indicate the opposite. I'm also asking where are those investors, and who they are. I see forums and J-D chat full of people wanting to keep optimal kelly, polls with 2/3 of people wanting optimal kelly, and I didn't see such an amount of divestments. That's all. Plus, everybody who invested sent their money to a site that had 1% max profit. I want to assume the majority of people think before investing, and calculate what kind of returns they will probably get. I for one did it, and the hard cold fact is that the expected yearly return is now MUCH lower than when I invested.
I will keep supporting dooglus, and in fact I increased my investment x4 just after the max profit was reduced to 0,25%.
Ha! I did the same thing!! I figured now that there is 4X less worst-case variance, I am willing to risk 4X as much (well, actually 3X as much, b/c I also accounted for the additional counter-party risk). So, I am now earning a larger % of the pie than the investors avoiding the variance  So, if everyone does this, I guess we'll all end up in a similar position as before, but with WAY more exposure to counter-party and legal risk.  Well, that was the obvious way to try to recoup the losses *if* Nakowa showed up again (which he did), as the max profit was taken dpwm to 0.25%. What really sucks is that you are suddenly forced to either commit 4x the amount of coin, or to get stuck with a big loss. That's basically why all this turmoil started (plus the fact that you just don't treat like sh*t your best customers). |
|
|
|
100% agree with watchwoord and RationalSpeculator. (3) You're still free to *prefer* that maxbet = Kelly value. But it's a preference, nothing more, nothing less. Right now, investors are obviously not of the same opinion about this. But you need to stop calling those who have a different preference from your own "irrational". It's disingenious, and rather insulting.
I strongly disagree on this. As soon as dooglus changed the max profit to 1%, a violent riot started on JD's chat. Only mechs supported that decision. After that somebody made a poll, and 2/3 of people said that going to 0.25% max profit was a mistake. Just read these forums, the vast majority of investors is annoyed by the sudden change - let's remember that we all signed up for a site that had 1% edge and 1% max profit. That said, we all know dooglus NEEDS support, and we all like him. You'll see how mechs took most of the heat, basically because most people feels bad attacking dooglus, I guess the reason is that he demonstrated he is extremely capable, smart and trustworthy. So, let me ask you: what investors do prefer fractional kelly instead of optimal kelly? Those who voted in the poll prefer optimal kelly. Those writing in here (except a few exceptions) prefer optimal kelly. Bullshit. It's pointless to argue further on this, I'm out of the discussion. Seriously rampion, you lost a lot of my respect today (not that it really matters). Sorry for that Oda, but I see what I see. Care to elaborate about where is the BS? Just read J-D's chat logs. Just check the forum. Just check the poll. I hope you also realize that the level of investment during Nakowa's "raid" was still 30k, which means that max. 1/3 of the investor divested, which is quite a big sum (and I guess that made doog very nervous), but the majority of investors (2/3) kept the money on the line, meaning they were OK with the risk. Finally, don't you agree that we have ALL signed up for a site that had 1% max profit? That was VERY CLEAR on the "invest" page. I personally did my calculations, projecting roughly a 100% return in one year. If some of the few investors that whined about Nakowa do not understand what 1% max profit means, or what variance is, or they just send their money blindly without thinking, we should just add a big disclaimer explaining that investing in a casino = variance. I will keep supporting dooglus, and in fact I increased my investment x4 just after the max profit was reduced to 0,25%. It was the only way to recoup my loss, and in fact I succeeded and covered it today thanks to Nakowa coming back. But I'm still an investor, I think I have the right to explain my position. You might think that I already recovered my loss, so why I'm still whining? Just because I had to risk and tie to the site 4x the coins I initially wanted to invest - that's not cool at all in my book. |
|
|
|
So... Where is 'orama? Only one post today? Smells fishy  |
|
|
|
100% agree with watchwoord and RationalSpeculator. (3) You're still free to *prefer* that maxbet = Kelly value. But it's a preference, nothing more, nothing less. Right now, investors are obviously not of the same opinion about this. But you need to stop calling those who have a different preference from your own "irrational". It's disingenious, and rather insulting.
I strongly disagree on this. As soon as dooglus changed the max profit to 1%, a violent riot started on JD's chat. Only mechs supported that decision. After that somebody made a poll, and 2/3 of people said that going to 0.25% max profit was a mistake. Just read these forums, the vast majority of investors is annoyed by the sudden change - let's remember that we all signed up for a site that had 1% edge and 1% max profit. That said, we all know dooglus NEEDS support, and we all like him. You'll see how mechs took most of the heat, basically because most people feels bad attacking dooglus, I guess the reason is that he demonstrated he is extremely capable, smart and trustworthy. So, let me ask you: what investors do prefer fractional kelly instead of optimal kelly? Those who voted in the poll prefer optimal kelly. Those writing in here (except a few exceptions) prefer optimal kelly. |
|
|
|
Ugh. Let me try once again.
If you remove the liquidity aspect of JD, many other gambling investments become very attractive again.
The liquidity aspect was just removed by lowering max bet and pissing off the whale. Investors who did not divest are stuck with a loss that it will take long to cover unless nakowa comes back and gambles hard. |
|
|
|
Math never lies. Irrational fear is NOT your friend.
(take back the max profit 1% so he can TRY HARD to cover his losses, came on doog...)
Yes and no; you have to understand that to bet the same amount he has to make a lot more bets, and thus the variance will more easily play in our favor. I'm not saying that as an argument for staying at 0.25% max bet though. If we had much more high bets (in number of bets) it would be safe to increase the max bet; the issue is not enough bets. I'm hoping for Nakowa copycats, especially with the news coverage. Nakowa copycats will want 1% max profit. |
|
|
|
|
Nakowa just lost his 2,000BTC.
3k yesterday + 2k today: Nakowa is only UP 11k from 16k.
|
|
|
|
|
Good old Nakowa losing 1,750BTC today. 250BTC more to go before he wipes out the 2,000BTC deposit he did today.
Math never lies. Irrational fear is NOT your friend.
(take back the max profit 1% so he can TRY HARD to cover his losses, came on doog...)
|
|
|
|
Another Option
On another option that hasn't been explored much, perhaps we should have an option where investors can choose to be based on amount wagered instead of amount won - at say a substantial reduced amount - example would be at 40% house 'risk cut'.
The problem with this is that those investors aren't risking anything at all. When the house needs coins to pay out a winner, these investors aren't going to give up their coins. They may as well not even bother depositing their coins, because we're just going to put them into cold storage and then give them back, with interest. My point is, what do such investors bring to the table? What use are they? We pay them (60% of 1% of some percentage of all bets) but in return they give us nothing. A similar idea was suggested in the JD chat some months ago, I think by uvw, but maybe by somebody else. He proposed having 3 tiers of investors, the regular ones we have now, the "coward" tier (like the ones you propose) and the "hero" tier, who take the 40% 'risk cut' that the cowards don't get, but also pay the cowards when the house loses. This idea fails for the same reason - the 'cowards' are effectively parasitical at the expense of the 'heroes'. They get a guaranteed return on their investment, but we're not free to use their investment for anything because we've promised never to lose it. First off, all this attention brought this investment opportunity to my attention. I invested last night. Everyone: You weigh the risk your willing to take by changing the amount of money you have invested. Want half the risk for half the gain? Easy, cut your investment in half. I have invested a number of Bitcoins I can stand losing in a positive EV investment with a large volatility. If I weren't willing to lose this amount I would invest less. Thanks Dooglus and don't let these people influence your decision making in the amount of the bankroll that can be at risk in a single bet. Kelly's criterion is the only rational approach, don't let people convince you to take an irrational approach because they are emotional. "They" have convinced him already. Optimal Kelly criterion is gone, we are now at 1/4 Kelly (0,25% max bet instead of 1%). |
|
|
|
At least now there is a lower limit to what he can lose. We should have left the limit alone. Let him bleed. If he loses today, he will justify it by saying we "screwed" his system by changing max-bet. Plus, as we said over and over, changing it when he is way UP is retarded. Not because maths (the probability of him winning or losing is still the same regardless of previous sessions), but because of psychology: if he start losing he will lose his temper and will start to make bad choices. His personality indicates that, and we are "protecting" him from himself by lowering the max profit - that's how I see it. |
|
|
|
anyway, looks like our best customer is back Yep, gambling addicts always come back - and they come back more often when they lose. Basic gambler's psychology, we should know it well as casino investors. That said: as you can see in blockchain.info Nakowa just sent 2,000BTC to J-D. This will be a fun evening. His losing big time ATM. |
|
|
|
If we were in the world of mathematics I would have no doubt that keeping the max bet to 0.01% is the only choice. But in the real world people have, blame them, feelings. Now I run some simulations with a player who is playing at max bet, lets say that three over four of them are satisfactory, in those cases we are making money with no problems, but one over four is more or less like that (initial capital is one bitcoin):  Now think we find ourselves in the middle, the heavy gambler has taken half of our pot. I want to know how many people will believe in mathematics (waiting for the inevitable return to gaining) and how many people (normal people having emotions and knowing that the world is not mathematics) will think that actually the website is scam. Our best customer has 1/4 probability (lets say, I would like to have a more precise computation) to make us think the website is scam. So mathematically, taking into account that humans are complex, that is actually not our best customer. For fuck's sake, finally. Thanks for putting this sentiment into precise words. Fuck Kelly criterion. Fuck "trust the math". Investors are humans. Pretending they are not, pretending there's a zero chance that the site will receive irreparable damage in trust if the bankroll starts approaching new lows is delusional. Maybe the sudden change from 1% to 0.25% was not the most wise action. But people need to pull their head out of their ass and stop pretending leaving it at 1% was THE ONLY MATHEMATICALLY CORRECT ACTION DO YOU EVEN LIFT BRO. If you open a casino in your platonic realm of mathematical objects maybe that's justified. In the real world, you better take into account your fellow human's irrationality, because otherwise you're being irrational yourself. Oda, you are investing in a Bitcoin casino, you are not depositing your money in a bank with a fixed yearly interest. 1% max profit can obviously lead to high volatility, but its the best way to get mid and long term profits. If you fear your investors do not understand they are investing in a casino, or what 1% max profit means, you just add a big disclaimer explaining them what variance is, and where they are investing. You just cannot expect 100% yearly returns with no variance and no risk. Do we agree on that? As nicolaennio said, we are roughly in the middle of that graph, and instead of letting math do its thing so it can go up again, we scared away our best customer, who is the only one that has the volume that allows to climb up again quickly, effectively condemning investors to stick with a huge loss for months. Will investors be OK with MUCH lower yearly returns but less variance? Don't think so, because the counter-party risk (eg: trusting your BTC to a third party which happens to be an unregulated gambling site) is too high for such a low return. As soon as a trustworthy competitor copies J-D's "original" model, investors will flee (mark my words). Finally, the very bad thing that happened here is that the change was made unilaterally while our best customer was playing, pissing him off and condemning investors to stick with a loss in the mid term. Changing the default 1% max profit might be a good thing, having a "market for risk" so everybody can decide their risk exposure is certainly an excellent idea, but the way in which yesterday this decision was taken is very counter-productive. |
|
|
|
Let's hope that a simple image make this very simple finance concept to stick in the heads of illiterate bitcoin miners. |
|
|
|
Exacto, fungible es la tinta de las impresoras. Y si no recargas los cartuchos con tinta barata (error), los cartuchos enteros serían fungibles.
Correcto, pero en inglés "fungibility" significa exactamente lo que pone en wikipedia, es decir: que cada unidad está valorada exactamente de la misma forma (mis monedas de 1€ valen LO MISMO que tus monedas de 1€). Obviamente el término está mal usado en castellano, pero ya sabemos la calidad de los artículos de wikipedia... Y por cierto, precisamente debido a la necesidad de "fungibilidad" del Bitcoin sería totalmente contraproducente "banear" las direcciones que contienen fondos robados, aunque el robo esté requetecomprobado.... Este es un tema que sale con fuerza cada vez que a alguien le roban sus bitcoins, y que la gente parece no entender. |
|
|
|
No matter what, if you play long enough you will end up losing simply because this game is -EV for you and +EV for the house.
Don't you guys grasp these simple concepts?
I am aware of this obvious maths/fact. and many more are aware of this fact. but there is still an option that a casino with house edge can lose. it is called "Cheat" and it looks like that You guys just push this option to far away aside. it doesnt hurt to take this also in consideration. Cheating has been taken into consideration, and Nakowa's betting "system" has been thoroughly analyzed. There's absolute NO evidence on him cheating, and on the contrary so far EVERYTHING indicates that he just got lucky. |
|
|
|
|
I've just checked JD chat logs, and I see that Dooglus acknowledged math was on our side, but "we couldn't count on Nakowa coming back after winning".
When somebody pointed out that gamblers always come back, Dooglus said that "Nakowa already walked away with 4k in August".
Wow. Just wow.
First, is obvious that Nakowa didn't "walk": he just stopped for a few weeks and CAME BACK. For Christ sake, he was playing yesterday, and you say" he walked in August"? Doog, as a casino operator you should know how gamblers minds work. They might stop for some weeks after a big win, but the more they win the more they will think their strategy is unbeatable. Nakowa will come back to "prove his points", until variance hits him hard, and at that point he will lose everything very fast because he thinks he can "spot patterns", and he won't be able to accept he might lose.
As a poker player I've seen that story over and over and over.
IMO a very poor management decision was made based on irrational fears and highly unlikely scenarios, I'd dare to say totally negligible scenarios from a statistical point of view. And we all know our business is based on probability, right?
The hard cold facts:
We have pissed off and treated badly our best customer ever
Investors who did not divest are left holding huge losses that won't be covered for months
If dumb investors do not understand that a casino is NOT a "stable" investment, you just add a big disclaimer explaining what the word "variance" means. You do not screw up with your best customer who, additionally, is giving a HUGE promo to your site, condemning most of your investor to remain holding a bag indefinitely.
|
|
|
|
Doog could show my chart, it has a nice graph to it until I busted.
Same for everyone else with a system - their graphs look good until they bust. There's a reason for that. Just the rest of them don't then try to beg other people to fund the next bet in return for SOME of the profit (when of course any investor could make the bet themself and get ALL the profit and none of the CP risk). But ... any other player or investor playing the game would be at a different point in the sequence than I would. I'm essentially selling my seeds: the combination of the current server seed, the client seed, and the next nonce is going to win. I just lost 6 times in a row, and statistically, and probably, the next roll will not be a loss but a win. Wow. You simply do not understand gamblers fallacy and you created a "gambling security"? Please tell me that nobody ever invested in it. Secondly, you cannot explain the patterns you spot because there are no patterns. No matter what, if you play long enough you will end up losing simply because this game is -EV for you and +EV for the house. Don't you guys grasp these simple concepts? |
|
|
|
Doog could show my chart, it has a nice graph to it until I busted.
Same for everyone else with a system - their graphs look good until they bust. There's a reason for that. And that's how Nakowa/allover/celeste graph would have looked like. But, you know, we decided to send him off for good when he was 13k BTC ahead because some investors do not understand what math and variance are, and what does it means to invest in a Casino. Hunting whales by changing rules (without warning all players and during they are playing) rather than by the result of mathematics is absurd. This is not a protection for investors, rather, it's protection for winning whales from losing back. Thank you Doog.
And exactly this this is what I've been screaming in the J-D chat since the moment Doog changed the max profit - and now we hear it from the whale's own mouth. I guess the fact that Dooglus was fully divested means that for some reason I personally cannot understand he "lost faith" in math, and he gave up on the idea of recouping losses from Nakowa. Maybe that was one of the reasons he decided to mess up with our best customer ever, while crippling the expected profits by taking max profit to 1/4 while investors that didn't divest were on HEAVY losses. |
|
|
|
If any investors wanted a max bet .25% of their roll they could have divested 3/4ths of their investment.
If all investors wanted this than the investors bankroll would be about 8,000 with 1% max bet , which is the same thing as 32,000 invested at .25%. Both give a max bet of 80 BTC.
Why couldn't Doog just divest all accounts by 75% if he was scared of whales placing too big of bets.
It would be less risky for investors to keep 8,000 with the site at 1% max bet than 32,000 at .25% max. Now we have to trust Doog with 4x the amount in cold storage.
Now with a .25% max bet as soon as the steady profits start new investors will come which will further dilute all the current investors making it harder to recoop loses.
Whales should be treated like VIP, regardless of how they act, as long as they continue betting. Each 300 btc bet was an expected gain of $360 to investors.
Lowering the max bet to 0.25% is not the same as divesting 75%, except in the face of bets >0.25% of the roll, which are only one user. This max bet system is a cool idea, I think that doog will definitely implement it as quickly as he can. I think there may be some deeper insight in what VTC is saying above. He says investors invested at 32,000 BTC and 0.25% max bet is the same as investors at 8,000 BTC and 1.0% max bet: in both cases the max bet is 80 BTC. In both cases the investors, in aggregate, earn the same profits, no? But in the 0.25% case the investors risk a larger amount due to counter-party risk. Did I understand you correctly, VTC? In my opinion VTC nailed it in all the points. JD is not a bank, it's an unregulated BTC CASINO, so you obviously want a high return on what you invest, expecting high variance especially in the very short term. And you definitely need whales for that. |
|
|
|
JD : a place where you can loose fast, but win slow !!
We just lost very fast due to variance, and if we do not see again Nakowa's volume it will take a while to cover those losses. |
|
|
|
|
Show Posts
