Just-Dice.com : now with added CLAMs : Play or Invest

[cdnbcguy]

I've done the math.

What we have here is a Bernoulli distribution - only ones and zeros but it still has a mean and a variance.

The variance in such a distribution is the probability of an event happening times one minus the probability of that event happening divided by the number of times it has an opportunity to happen.

The probability of us, the investors, winning any one bet is 51 % so the variance is 0.51 * 0.49 or 0.2499 divided by the number of bets.

A Bernoulli distribution always describes a bell curve. The greater the variance the fatter the bell curve, but this one always peaks at 0.51.

Our profit is all the curve that is on the right side of 0.5 (the mean of a fair coin toss) and our loss is all the curve on the left side of 0.5.

What we WANT is a curve with no variance at all. A straight line. We take the bet, shave off 1 percent and give the 99 % back. They give it back to us and we shave 1 percent again and give it back etc etc. Every 72 times this happens, we are keeping half the original stake.

But in real life there is variance. We don't get a straight line, we get a bell curve.

You will notice that with 51 % probability of winning we are intrinsically slightly advantaged. That's the whole point.

When the whale makes one huge bet of amount N the variance on the one bet is 0.2499 and the standard deviation of that is the square root of the variance which is 0.4999. That is a big fat curve of mean 0.51 and standard deviation of 0.4999. The amount of the curve to the left of 0.5 (the one where we the investors lose the bet) is 49.2 % - the part were we win is 50.8 %.

That is NUTS. We're betting a huge amount on a coin toss. The chance we make a profit (the portion of the curve to the right of 0.5) is only about 51%.

Oh, but that's an advantage you say! Look - if we take that bet we are gamblers and the whole point of investing is to not be a gambler. I'm not betting a wad of Bitcoins on a coin toss.

Besides - watch this! I'll show you what a REAL advantage looks like!

Let's get the same N bet in 1,000 small bets of N / 1,000.

Suddenly the variance is 0.2499 / 1,000 -> 0.0002499 - and the standard deviation is 0.0158

The curve this time is still peaking at 0.51 but it is much narrower. It is much closer to that ideal line we want. The area to the left of 0.5 - the losing bets - is about 24 % of the curve. To the right - 76 %.

We profit 76 % of the time over 1,000 bets - not 50.8 % of the time like with 1 bet.

THAT'S being an investor, not a gambler.

Also - has anyone noticed that despite the 1 percent edge JD has never made a 1 % profit? It was about half that - before the current fiasco - now we know why.

Variance. Lets lower it by refusing big bets.

[mechs]

I've done the math.

What we have here is a Bernoulli distribution - only ones and zeros but it still has a mean and a variance.

The variance in such a distribution is the probability of an event happening times one minus the probability of that event happening divided by the number of times it has an opportunity to happen.

The probability of us, the investors, winning any one bet is 51 % so the variance is 0.51 * 0.49 or 0.2499 divided by the number of bets.

A Bernoulli distribution always describes a bell curve. The greater the variance the fatter the bell curve, but this one always peaks at 0.51.

Our profit is all the curve that is on the right side of 0.5 (the mean of a fair coin toss) and our loss is all the curve on the left side of 0.5.

What we WANT is a curve with no variance at all. A straight line. We take the bet, shave off 1 percent and give the 99 % back. They give it back to us and we shave 1 percent again and give it back etc etc. Every 72 times this happens, we are keeping half the original stake.

But in real life there is variance. We don't get a straight line, we get a bell curve.

You will notice that with 51 % probability of winning we are intrinsically slightly advantaged. That's the whole point.

When the whale makes one huge bet of amount N the variance on the one bet is 0.2499 and the standard deviation of that is the square root of the variance which is 0.4999. That is a big fat curve of mean 0.51 and standard deviation of 0.4999. The amount of the curve to the left of 0.5 (the one where we the investors lose the bet) is 49.2 % - the part were we win is 50.8 %.

That is NUTS. We're betting a huge amount on a coin toss. The chance we make a profit (the portion of the curve to the right of 0.5) is only about 51%.

Oh, but that's an advantage you say! Look - if we take that bet we are gamblers and the whole point of investing is to not be a gambler. I'm not betting a wad of Bitcoins on a coin toss.

Besides - watch this! I'll show you what a REAL advantage looks like!

Let's get the same N bet in 1,000 small bets of N / 1,000.

Suddenly the variance is 0.2499 / 1,000 -> 0.0002499 - and the standard deviation is 0.0158

The curve this time is still peaking at 0.51 but it is much narrower. It is much closer to that ideal line we want. The area to the left of 0.5 - the losing bets - is about 24 % of the curve. To the right - 76 %.

We profit 76 % of the time over 1,000 bets - not 50.8 % of the time like with 1 bet.

THAT'S being an investor, not a gambler.

Also - has anyone noticed that despite the 1 percent edge JD has never made a 1 % profit? It was about half that - before the current fiasco - now we know why.

Variance. Lets lower it by refusing big bets.

This has been mentioned to Dooglus many times, his answer he always gives if you want less exposure then decrease your investment.  There will be no change.  Either accept the conditions or divest.

[cdnbcguy]

This has been mentioned to Dooglus many times, his answer he always gives if you want less exposure then decrease your investment.  There will be no change.  Either accept the conditions or divest.

He'll change or go broke. I'm outta here.

[mechs]

This has been mentioned to Dooglus many times, his answer he always gives if you want less exposure then decrease your investment.  There will be no change.  Either accept the conditions or divest.

He'll change or go broke. I'm outta here.

Doog never goes broke.  He is completely divested and plans to stay so.  He makes all his profit off commission and that gets locked in weekly. 

[byronbb]

If people can't handle losing investments then they should not invest. If the whale had lost your attitude would be irrevocably otherwise.The site makes no surprises here. They offer high limits with 1% edge, this isn't like booking a Keno game. The issue is the whale has played a low number of high limit bets and run hot. Does anyone know his ROI? Or # of bets that he placed?

[🏰 TradeFortress 🏰]

This has been mentioned to Dooglus many times, his answer he always gives if you want less exposure then decrease your investment.  There will be no change.  Either accept the conditions or divest.

He'll change or go broke. I'm outta here.

Doog never goes broke.  He is completely divested and plans to stay so.  He makes all his profit off commission and that gets locked in weekly. 

He earns more commission when investors make more profit.

[chriswen]

He only makes commision on investors that profit.  So if you're deep in a whole then he won't be earning commissions from you.

Here's an analysis on the standard deviation.

https://bitcointalk.org/index.php?topic=242962.msg3214226#msg3214226

Where did doog mention divesting?

[mechs]

He only makes commision on investors that profit.  So if you're deep in a whole then he won't be earning commissions from you.

Here's an analysis on the standard deviation.

https://bitcointalk.org/index.php?topic=242962.msg3214226#msg3214226

Where did doog mention divesting?

In chat - we spoke about it a couple times.  Says he cannot handle the variance and that nakowa always seems to win.  He says he will stay divested.

[mberg2007]

We are not being killed by huge martingale bettors, we are being killed by someone who bets 100 BTC on 49.5% 12 times and wins 11.

Quite the contrary. You *want* these people in your casino. Because in a second, he's going to bet 12 times and lose 12 times. That's what the house edge is all about - Martingale is a losing strategy and the more martingale betters you have, the better.

Why do you think almost all the online dice houses have "auto" modes that specifically cater to Martingale betters? Because these stupid people think they can work around their statistical disadvantage using a top secret system they bought from some internet marketeer.

Look at how the balance is decreasing. It's slow and steady, like satoshis are seeping though the creeks somehow.

-Michael

[mberg2007]

Actually I remember reading an article a long time ago that said the way to make $ at any table is to bet the max and quit, win or lose.
I actually wrote a simulation in QBASIC for that and it worked.
This is what's happening here.

No.

Playing once is not a winning strategy. If it is, you'll have to show the math that proves it.

-Michael

[icey]

The whale just took another 1kBTC from JD

[towtoad]

The whale just took another 1kBTC from JD

Tired to explain why and how.

Might be better to take it as supernatural? It seems I can feel next wins...

[naphto]

Seems like the inputs.io problem has been fixed

[drawingthesun]

You are up 11,000 now Nakowa?

[mberg2007]

We profit 76 % of the time over 1,000 bets - not 50.8 % of the time like with 1 bet.

THAT'S being an investor, not a gambler.

Also - has anyone noticed that despite the 1 percent edge JD has never made a 1 % profit? It was about half that - before the current fiasco - now we know why.

Variance. Lets lower it by refusing big bets.

I'm sorry, but this is the biggest load of BS I have ever read. Clearly you have not done the math.

If you make 1000 bets with a 1% house edge, you will win 490 times and the house will win 510 times. The house will not win 76% of the time.

Variance means nothing as far as house edge. Playing many tiny bets and playing one huge bet provides precisely the same house income over time. As a gambler, you will have no advantage by placing smaller bets and winning and losing small amounts than by placing a single large bet. Over time it's just a matter of scale.

A casino runs the risk of losing the bankroll only if they don't cap the size of their maximum bets. Because obviously there's only a 51% chance of winning that bet, and thus a 49% chance of going bust from the casino's point of view. But JD does have these limits. Noone is placing bets of 1000 BTC or more. The max win is 1% of the invested capital, which makes good sense. There is no reason to limit that further.

What we have here is a situation where someone appears to be actually beating the house edge over many thousands of bets. And this is intriguing, because from a statistical point of view this should not be possible. You can't win a coin toss came if the coin is balanced towards the house, no matter what system you use.

-Michael

[icey]

The whale just took another 1kBTC from JD

Tired to explain why and how.

Might be better to take it as supernatural? It seems I can feel next wins...

Whatever your doing its working, congrats on the winnings you must be buzzing now

[b!z]

What we have here is a situation where someone appears to be actually beating the house edge over many thousands of bets. And this is intriguing, because from a statistical point of view this should not be possible. You can't win a coin toss came if the coin is balanced towards the house, no matter what system you use.

-Michael

It's called variance.

[towtoad]

Whatever your doing its working, congrats on the winnings you must be buzzing now

I'm answering questions here: http://www.reddit.com/r/AMA/comments/1my8fc/im_the_whale_on_justdice_id_love_to_answer/

[01BTC10]

If you don't like variance then invest in bond or something. Investing in a casino is basically gambling with the edge on your side. The long term is an order of magnitude longer than what most people can imagine. Obviously, I'm implying that there is no flaw in the RNG.

[MRKLYE]

Nakowa has said he is taking the site to -2000.. divest bitches!