Provably Fair for investors

[hatshepsut93]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

[stomachgrowls]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

Theres a possibility that casino owners would do such act because investors doesnt really have access on those seeds on each roll and possibilities of making fake accounts and winnings would really be there but i think they wont do such act because if they do that thing investors would lost its trust to the house and with that it makes a bad reputation and other potential investors wont invest on your site because some investors do lose their investment.

[BossMacko]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

It is indeed possible but as an investor myself i don't think about this because before i invest i already know every risk that my investment can go. Besides you will not invest in a site that you don't trust.

[joshy23]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

Possible, but what do casino operators gain for these acts? This will just lost a lot of investors if they pull this kind of scheme. I don't know how to protect one's investor, but it is the risk that they take when they put money on gambling sites.

[doomistake]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

On the first place, Gambling never get fair to us, because it is gambling, gambling only needs money and doesn't care whether we have lost so much bitcoin on them, they don't care as long as they earn money from every player that gambles to them. But behind in all of this, we still risk our bitcoin hoping that it would grow and we could make profit when we are going to invest to a gambling site, maybe what you have said is true that Gambling sites are just faking the players win so that they could steal the investors funds, but we don't have any proofs about it.

So, if we are suspecting that the gambling sites are doing this to us every time that we invest to them, then the only option that we have to avoid such thing is not to invest to them anymore, because there is no more reason for us to invest since they are just cheating on us, and just using our money for their own good, and it is not fair.

[hatshepsut93]

You guys are really missing the point, there's no way to detect such scam, some operators might have been doing it for some time and no one even suspected a thing. For example. casino is doing really well, lets say 10% per month, and then owner decides to rob his investors, so he creates some fake wins, but he takes only half of the monthly profit, so investors still have 5% and are quite happy with it. Also casino owners could lure investors with a big promised profit share percentage, like 80-90%, but then constantly create fake wins to effectively lower it to something like 60-70%.

[BrewMaster]

i saw another topic by "Baryom" the owner of Bitsler casino who was talking about the same thing. there were some pretty good arguments and also some solutions there. you may want to take a look at that topic.

edit: here is the link to that topic i was talking about if anyone was interested: https://bitcointalk.org/index.php?topic=1787647.0

[game-protect]

This is indeed a very good suggestion and fully justified:

Satoshidice scam, 500+ Bitcoins defrauded and disappeared!

SatoshiDice Investor Scam

[bajing]

I am a little confused with probably fair for investors and I think that when we invest in gambling sites there is no guarantee that there will be a fair share of the profits, of course, the site owner will earn a bigger profit.

[justdimin]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

Possible, but what do casino operators gain for these acts? This will just lost a lot of investors if they pull this kind of scheme. I don't know how to protect one's investor, but it is the risk that they take when they put money on gambling sites.

While you are right and no one will invest in a casino that gives loss to their investors rather than profit but in case a casino gets thick with investments and they plan to run away with people's money then they will have a golden chance to stay in the market with their tail up and yet scamming everyone.

I think apart from investing in a casino whom we trust totally there is no other way to deny this really because always the owner will determine the seeds and this cannot be changed.

[beerlover]

You have made an excellent point and doing this way they will deny running completely rather scamming smartly. The problem is that if investors somehow know the seeds to make sure they are taking participation then it would get very bogus and anyone can cheat.

The only way to avoid this is if the casino owners have a source of seeds which is independent and cannot be altered anyhow like for example using random numbers sort of service.

[maydna]

I am a little confused with probably fair for investors and I think that when we invest in gambling sites there is no guarantee that there will be a fair share of the profits, of course, the site owner will earn a bigger profit.

of course the site owner will earn the most profit but at least if we invest in their site, we can make profit to although the profit is not big like them. maybe probably fair is mean that investors can take profit if they stay with the owner site and invest some amount of money to them, waiting for sharing the profits but i think the site owner don't want to tell how much amount that we can get if we make invest with some amount, but as long as we can take the profit then we can stay with them.

[hatshepsut93]

You have made an excellent point and doing this way they will deny running completely rather scamming smartly. The problem is that if investors somehow know the seeds to make sure they are taking participation then it would get very bogus and anyone can cheat.

The only way to avoid this is if the casino owners have a source of seeds which is independent and cannot be altered anyhow like for example using random numbers sort of service.

It's not possible to implement "investor seeds", this system is working because players can use their custom seeds for every bet, you literally can type anything in "client seed" field and use it as your seed for next bet. But we as investors can't just manually type a seed for each that when there's hundreds of bets per second. Provably Fair means that the result of your bet would be determined based on seed that you have submitted before the bet was made, so it won't work for investors because it would require someone to generate random numbers for every bet that is made.

By the way, even if there were investor seeds they won't increase chance of cheating, because you need all seeds to solve the hash, otherwise it won't work.

[yueno]

Trading for me is provably fair for investors because you used your knowledge to predict which buy low and sell high therefore you use prediction notbunlike in gambling where gambling is for destiny and lucky only.

[shintosai]

Today almost all gambling sites feature Provably Fair system for their games. If you are not familiar with it, it is based on cryptographic hashes - the result of each bet is based on 2 seeds, one of each comes from the player side and the other from the house side. This system is used to verify that every bet was truly random without any manipulation from both sides.

The problem here is there's a third side involved in gambling - investors. They invest their money into casinos bankroll and share profit when players lose, or cover house's loses when players win. Now my concern is that investors don't have any control over seeds, so there's a potential for abuse by casino operators. They could simply create player account and make fake winnings, since they know both seeds, and by doing this they will be stealing investor funds without any way to prove it. Of course investors will start withdrawing their money if they will see losses over long term, but this scam could be even more subtle, for example living investors with profit, just smaller than they should have earned so there wouldn't be any suspicions. Considering all this, I think gambling sites should extend Provably Fair system to cover investor side.

It is indeed possible but as an investor myself i don't think about this because before i invest i already know every risk that my investment can go. Besides you will not invest in a site that you don't trust.

that's right investing with casino's always have a risk point and to lessen that better to check the reputation of that particular house and allowing yourself to know what can be the possible outcome its not about the profits but the trust with where you are investing your money.

[virasisog]

One thing is any gambling house may do that act .But i think it is on gambling house that is more likely have no bigger profits and players .So if they do faking an account for it to saw by the players is suspicious ofcourse if you play you will think for it .The order side is we don't have any idea how this computer or system is being programmed  .So bare in mind that every casino or gambking house have a risk and you should be aware of the things and the players who's on it . Only invest in the reputable casino's to be sure .

[piloder]

@OP you have revealed a very good point but sadly there is no way to stop this if the owner himself is just making small profit to not create any suspicion. I have invested in trusted casino which shows all of their stats including daily/weekly profit/loss and current bankroll. But problem is it is hard to know those numbers are real or some made up one.  

[jacktheking]

Agree. hatshepsut93 brought up a very interesting topic that I have never thought of - and I'd say most people didn't too. This will only affect the investor but not the players or the house since they will be the winner. I'd say that online gambling sites that have investment scheme will now need to come up with another provably fair algorithm that makes the investor, players and themselves happy.

[ajaxmoor]

Tbh, I don't think it is the only concern that exists. For example if such a provably fair for investors existed, then even then casinos could bet and keep betting till they made profit due to the size of the bankroll or fake credits they can add to their own accounts. And by any chance if their fake account did end up losing, they could just hit n run, or fake a bigger amount since the bankroll would have increased as well.

[Catmony]

Anybody here know about vdice.io ? They have opened up ICO to distribute their vslice token which represents the share of any investors in vdice and profit is shared according to site profit and numbers of share. They also uses ETH smart contracts to roll the results, is there anyway they can also create fake player and make fake bet?