Moneypot just took a huge loss?

[dooglus]

the problem I see with this bet is that even the chance is 1 in ~30k the user can win it in his first bet before the 29,999 losing bets. or what do I miss here?

What you're missing is that on the other hand the same guy could make 99,999 losing bets in a row and never hit the 121x payout.

It's a gamble, and nobody is saying the investors always win.

By using the Kelly criterion the house is optimising the expected returns for the investors. That doesn't mean the investors won't be making a loss at times.

[elm]

the problem I see with this bet is that even the chance is 1 in ~30k the user can win it in his first bet before the 29,999 losing bets. or what do I miss here?

What you're missing is that on the other hand the same guy could make 99,999 losing bets in a row and never hit the 121x payout.

It's a gamble, and nobody is saying the investors always win.

By using the Kelly criterion the house is optimising the expected returns for the investors. That doesn't mean the investors won't be making a loss at times.

yes the player could make 99,999 losing bets in a row but as it is a bet of 1 in ~30k he could still win the outer with his first few bets or even more than once in his first few bets. why should a casino take such a high and risky gamble? IMO a casino should never take such a high risk gamble with a possibility to get wiped out in one bet. as I posted before I don't know any land based or online casino beside MP that is taking such a dangerous risk.
to me it looks like that this high risk KC handling is only for plinko or does MP have other games with such high risk payouts? maybe the previous MP owner could answer this question.

[dooglus]

yes the player could make 99,999 losing bets in a row but as it is a bet of 1 in ~30k he could still win the outer with his first few bets or even more than once in his first few bets. why should a casino take such a high and risky gamble?

Because it maximises the expected growth of the logarithm of their bankroll.

IMO a casino should never take such a high risk gamble with a possibility to get wiped out in one bet.

And they never do. The only time you risk 100% of your bankroll on a single event is if the house edge is 100% - and in that case the player is guaranteed to lose.

as I posted before I don't know any land based or online casino beside MP that is taking such a dangerous risk.

Then there are lots of places leaving money on the table.

to me it looks like that this high risk KC handling is only for plinko or does MP have other games with such high risk payouts? maybe the previous MP owner could answer this question.

If somebody wants to bet with a 99% house edge against them on a dice game, MP will happily risk 99% of its bankroll on that bet.

An example of such a bet: you roll a number in the range 0.00 to 99.99. If it's less than 5.00 you double your money. Otherwise you lose.

You have a 1 in 20 chance of doubling your money, and a 19 in 20 chance of losing it.

Those are horrible odds for the player, and great odds for the house. The house has a 90% house edge.

What percentage of your bankroll would you risk taking such a bet, if you were the house?

The correct "Kelly" amount is to risk 90% of your bankroll, since the house edge is 90%. (RTP = 5 * 2 = 10%)

I ran a simulation, having the house risk different percentages of its bankroll from 0% to 99% while the player max-bets against them 1000 times in a row. Here's a chart of the average of the log of the house bankroll for each percentage risked:



Notice how the house does best when it risks 90% of its bankroll per bet? That's the point.

Edit: I re-ran the simulation, but for a 1% house edge bet. The variance is a lot higher, due to the smaller house edge, but the basic features of the curve are clear enough: risking 1% is optimal. risking 2% gives you a zero expected growth of log(bankroll), and higher than 2% risk is actually bad for business:

[sana54210]

Oh man , that is quite a news actually, I was almost certain to invest some amount there in moneypot, after watching for so many days. But meh, if someone can win so big on plinkopot, I will think thrice before investing anything now.

[elm]

Oh man , that is quite a news actually, I was almost certain to invest some amount there in moneypot, after watching for so many days. But meh, if someone can win so big on plinkopot, I will think thrice before investing anything now.

your view as an investor is very interesting and understandable. we need a poll where investors are asked if they would take this kind of risk to get wiped out in one bet. I for myself know what option I would choose

lets take Ryan's comment

(Most of the big investors I talked to were comfortable with the idea of risking 99% of the money they put in)

IMO those big investors who are comfortable with this kind of risk are gamblers and not investors

I need to read back because I think I remember that a poster wrote that no one knew about this high plinko risk and even not the MP coder. and if this is correct how could Ryan ask any investor if he will accept a 99% BR wipe out risk if he was not aware of this plinko risk?

[dooglus]

I ran a simulation

I modified the simulation to it's running the 121x "red" plinkopot line:

            r = random.random() * 65536
            if   r >= 26333 and r < 39203: p = 0.3
            elif r >= 14893 and r < 50643: p = 0.5
            elif r >=  6885 and r < 58651: p = 1
            elif r >=  2517 and r < 63019: p = 1.4
            elif r >=   697 and r < 64839: p = 3
            elif r >=   137 and r < 65399: p = 5
            elif r >=    17 and r < 65519: p = 13
            elif r >=     1 and r < 65535: p = 47
            else:                          p = 121

and generated some plots of the average log bankroll growth against percentage of bankroll risked.

It takes a lot of rolls to get a good smooth curve, presumably because of the high variance of the 121x payout.

First attempt:



Second attempt:



Both show that risking somewhere around 40% of the bankroll per game is optimal, but that risking half that isn't anywhere near half as bad.

[ndnh]

I think you may have missed the part of the thread, where it was demonstrated how and why it should have gone through. There was no mistake

I tried to read and understand things again, but still can't seem to.

Can someone summarize why the bet went through? Was the bet supposed to go through?


https://www.moneypot.com/bets/18530298 shows <1% house edge. But risking tens of bitcoins at 1% edge is crazy, so I assumed it shouldn't have gone through
Edit: unless the max bet plinkopot shows is wrong, and the amount taken as trying to win is much lower than the max payout on the line.

[elm]

I ran a simulation

I modified the simulation to it's running the 121x "red" plinkopot line:

            r = random.random() * 65536
            if   r >= 26333 and r < 39203: p = 0.3
            elif r >= 14893 and r < 50643: p = 0.5
            elif r >=  6885 and r < 58651: p = 1
            elif r >=  2517 and r < 63019: p = 1.4
            elif r >=   697 and r < 64839: p = 3
            elif r >=   137 and r < 65399: p = 5
            elif r >=    17 and r < 65519: p = 13
            elif r >=     1 and r < 65535: p = 47
            else:                          p = 121

and generated some plots of the average log bankroll growth against percentage of bankroll risked.

It takes a lot of rolls to get a good smooth curve, presumably because of the high variance of the 121x payout.

First attempt:



Second attempt:



Both show that risking somewhere around 40% of the bankroll per game is optimal, but that risking half that isn't anywhere near half as bad.

very admirable your efforts to explain, to prove or to find the best KC %age for the plinko game. I would expect this effort from the ex owner or new owner of MP

you are saying that risking 40% of the BR would be optimal but half = 20% would also be acceptable? did I get this right?

what about those 83% or 99% KC risk for the plinko game?

[ndnh]

In a case where a player's bankroll is higher than the site bankroll, wouldn't such a system maximize the risk (along with expected profit)? Is that desirable, say, against a 1% fixed max profit?

Am I correct to say that in such a case, an investment in bustabit would be safer than one in moneypot?


Edit: What would be the max bet (on a 1% HE) on a 999x line on a 100BTC bankroll? I think it would be higher than LB's..

[dooglus]

Can someone summarize why the bet went through? Was the bet supposed to go through?

The bet went through because the site was using the Kelly criterion to decide how much of its bankroll to risk. The Kelly criterion tells it to risk 35.3% of its bankroll when playing the 'red' line (with 121x max payout).

https://www.moneypot.com/bets/18530298 shows <1% house edge. But risking tens of bitcoins at 1% edge is crazy, so I assumed it shouldn't have gone through

People are familiar with dice site style betting, where there are only two outcomes (win/lose). In that case Kelly tells us that the percentage of the bankroll to risk is the same as the percentage house edge.

It's quite different for plinko games where there are a range of outcomes. In that case Kelly tells us to risk more than (house edge)% of the bankroll. See my most recent two charts. Risking 35% hits the peak of those charts. Risking only 1% gets you far lower expected log growth.

you are saying that risking 40% of the BR would be optimal but half = 20% would also be acceptable? did I get this right?

It appears that 35.3% is optimal (for the 121x red line - it differs vastly depending on the line we're talking about). And looking at the chart, it looks like risking half that doesn't reduce the expected log growth by a whole lot.

what about those 83% or 99% KC risk for the plinko game?

Those were for different payout lines. The 83% was for the 'orange' line, and the 99% was a silly extreme example where all the payouts were very close to 1x and the true house edge was much higher than 1% (since the player isn't really risking most of his stake at all when there's no chance of losing most of it).

The orange line pays out like this:

            if   r >= 26333 and r < 39203: p = 0.4
            elif r >= 14893 and r < 50643: p = 1
            elif r >=  6885 and r < 58651: p = 1.1
            elif r >=  2517 and r < 63019: p = 1.2
            elif r >=   697 and r < 64839: p = 1.5
            elif r >=   137 and r < 65399: p = 2
            elif r >=    17 and r < 65519: p = 3
            elif r >=     1 and r < 65535: p = 9
            else:                          p = 23

and when I ran a simulation I got a plot of return against risk like this:



It peaks around 83% as expected. Risking half that looks like it gets you around 60-70% of the expected growth.

[ndnh]

Can someone summarize why the bet went through? Was the bet supposed to go through?

The bet went through because the site was using the Kelly criterion to decide how much of its bankroll to risk. The Kelly criterion tells it to risk 35.3% of its bankroll when playing the 'red' line (with 121x max payout).

https://www.moneypot.com/bets/18530298 shows <1% house edge. But risking tens of bitcoins at 1% edge is crazy, so I assumed it shouldn't have gone through

People are familiar with dice site style betting, where there are only two outcomes (win/lose). In that case Kelly tells us that the percentage of the bankroll to risk is the same as the percentage house edge.

It's quite different for plinko games where there are a range of outcomes. In that case Kelly tells us to risk more than (house edge)% of the bankroll. See my most recent two charts. Risking 35% hits the peak of those charts. Risking only 1% gets you far lower expected log growth.

Thanks for clearing it up.

Makes perfect sense now.

[dooglus]

In a case where a player's bankroll is higher than the site bankroll, wouldn't such a system maximize the risk (along with expected profit)? Is that desirable, say, against a 1% fixed max profit?

The charts I posted assume the player has an infinite bankroll, and makes a max bet every time. ie. I'm already assuming the player(s) have more than the site.

Am I correct to say that in such a case, an investment in bustabit would be safer than one in moneypot?

That would depend on how bustabit sets its maximum bet. I think Ryan sets it way too high most of the time relative to the site's bankroll. I expect he's operating way past the peak on the chart, and maybe has a negative expectation of log bankroll growth if everyone was to max bet all the time. But it's not (last i heard) open to public investment, and he's aware of the risks, so what can you do?

Edit: What would be the max bet (on a 1% HE) on a 999x line on a 100BTC bankroll? I think it would be higher than LB's..

It would depend hugely on the other numbers in the payout table. The Kelly calculation is dominated by the more common payout multipliers.

[Blazed]

I have been waiting 48 hours now for a withdraw... anyone else having issues? Is there a main thread for MoneyPot anymore?

Edit: it is a small amount also... little under .4BTC

[Falconer]

I have been waiting 48 hours now for a withdraw... anyone else having issues? Is there a main thread for MoneyPot anymore?

Edit: it is a small amount also... little under .4BTC

I withdrawed around 0.25 like 7 hours ago and it is sent immediately . The old thread by rhavar has been locked and there is a new moneypot's thread but it seems some app owner is derailing his personal issue there which clutter up the thread with the same complaint so ranlo locked the thread

[ranlo]

which clutter up the thread with the same complaint so ranlo locked the thread

Misinformation ftw. Ranlo didn't start the thread so Ranlo had no control over the thread so Ranlo could not have possibly locked the thread. Ranlo never censors anyone.

@Blazed, there was a note among admins about the withdrawal. Not sure why it hadn't been sent yet. I'll ping it...

[elm]

which clutter up the thread with the same complaint so ranlo locked the thread

Misinformation ftw. Ranlo didn't start the thread so Ranlo had no control over the thread so Ranlo could not have possibly locked the thread. Ranlo never censors anyone.

@Blazed, there was a note among admins about the withdrawal. Not sure why it hadn't been sent yet. I'll ping it...

are you one of the new owners of MP?

as far as I understood MP paid out the OP's big win and confirmed there was nothing wrong with his bets. why are you still delaying all withdrawals?

[sana54210]

which clutter up the thread with the same complaint so ranlo locked the thread

Misinformation ftw. Ranlo didn't start the thread so Ranlo had no control over the thread so Ranlo could not have possibly locked the thread. Ranlo never censors anyone.

@Blazed, there was a note among admins about the withdrawal. Not sure why it hadn't been sent yet. I'll ping it...

are you one of the new owners of MP?

as far as I understood MP paid out the OP's big win and confirmed there was nothing wrong with his bets. why are you still delaying all withdrawals?

I think when there are several admins such problems occur.
If even one of them is no satisfied with a particular result, they will have to pause and stop withdrawals unless all are satisfied.

[Blazed]

which clutter up the thread with the same complaint so ranlo locked the thread

Misinformation ftw. Ranlo didn't start the thread so Ranlo had no control over the thread so Ranlo could not have possibly locked the thread. Ranlo never censors anyone.

@Blazed, there was a note among admins about the withdrawal. Not sure why it hadn't been sent yet. I'll ping it...

Alright...still nothing though.

[ranlo]

which clutter up the thread with the same complaint so ranlo locked the thread

Misinformation ftw. Ranlo didn't start the thread so Ranlo had no control over the thread so Ranlo could not have possibly locked the thread. Ranlo never censors anyone.

@Blazed, there was a note among admins about the withdrawal. Not sure why it hadn't been sent yet. I'll ping it...

are you one of the new owners of MP?

as far as I understood MP paid out the OP's big win and confirmed there was nothing wrong with his bets. why are you still delaying all withdrawals?

Nothing was delayed, per se. To keep a bit safer, the site runs far less BTC in the hot wallet than the cold wallet. There were a lot of withdrawals the day he tried to withdraw, which had drained the hot wallet. At this point, Blazed had made a withdrawal that exceeded its balance, which puts it in a "failed" state for admins to take care of. Shortly after, there were more deposits, but the system doesn't automatically attempt to keep pushing transactions through that are already "failed," so it still requires admin intervention.

Past that, I apologize but I have no information, .

[Blazed]

Well, my withdraw came through so all sorted out now. Thanks for getting this fixed up for me.