15% profit margin not too much guys?
Actually,
Thats a very good point, and one that is bothering us, as we want to offer a possibly profitable service (as can be leveraged trading like bitfinex / bitcoinica etc.). And one that can feels profitable to the users, beyond those that are here purely for the thrill of gambling.
So first let me expand on WHY our margin seems so big :
- If the people and the price is truly random, then obviously the true odds would be 1:2. That would makes our margin insane.
What we are aiming for is not a frightening 15% fee or whatever, but rather a less than 5% house edge.
But in a practical world : So far we have a few traders that managed to win a TON, like winning 2/3rd of their bets. And they are betting BIG. We lost almost 10 bitcoins since starting this business.
Is this random luck ? Are we just randomly running very bad ? We can't really tell. Maybe a few guys are super skilled, using some walls patterns, betting at the right time, or even having a way to slightly manipulate the market. We really have no idea.
Obviously winning day traders exist in real markets, so that's definitely a possibility.
All we know is that, if we were to break even for all bets so far, we would need to offer a 1.60 price multiplier.
As our pockets aren't infinite and since our statistical data is far from being wide enough, we have no over protection mechanism than to lower the odds to these theorical odds
- Finally, comparable business often have payout very low like 60% etc. even with crazy volumes (binary options trading website "scam" which tends to market themselves as investment "win 10 000$ in a few hours from home ! easy without market knowledge" etc.)
What we are thinking to introduce now, is a hedging service : For example, You think 1.60 price multiplier is really too low ? Ok, we let you propose 1.80 to everybody using our website, and then the betters are matched against your offer using your bitcoins. If you are convinced that this is profitable long term, then you have an easy mechanism of making money by playing the "banks" instead of us.
Of course this is not something we actually propose, just something we are thinking of designing to allow the fairest deal we can offer to the users.
Would people be interested to put their money at stakes and proposing better odds than us for the same service ?
Thats an idea we wanna explore.
