Just-Dice.com : Invest in 1% House Edge Dice Game

[maqifrnswa]

So, I have this awesome idea.

Someone should turn just-dice into a stock.  So people can trade it on bitfunder or something.  Now you ask why wouldn't you just do a regular stock?  That's because now people can buy options on the stock.  That would be cool.

A stock would be based off revenue from commissions and ads - that is a much better deal than being an investor.

No it would be a third party who invested in just-dice.

Doog doesn't need capital, so he doesn't need to sell stocks. You're proposing a pass through. Go ahead and set one up, offer an IPO, invest it all in JD, and distribute dividends above some bankroll if it is available a given week. Seems kind of silly to me since you could just directly invest in JD - but you're right, you want to setup a JD derivative and that needs some underlying security.

[1715131390]

1715131390

[1715131390]

1715131390

[1715131390]

1715131390

[mechs]

So, I have this awesome idea.

Someone should turn just-dice into a stock.  So people can trade it on bitfunder or something.  Now you ask why wouldn't you just do a regular stock?  That's because now people can buy options on the stock.  That would be cool.

A stock would be based off revenue from commissions and ads - that is a much better deal than being an investor.

No it would be a third party who invested in just-dice.

Doog doesn't need capital, so he doesn't need to sell stocks. You're proposing a pass through. Go ahead and set one up, offer an IPO, invest it all in JD, and distribute dividends above some bankroll if it is available a given week. Seems kind of silly to me since you could just directly invest in JD - but you're right, you want to setup a JD derivative and that needs some underlying security.

With almost 3.5M wagered and the site at a loss, I think he looking for a way to short J-D

[maqifrnswa]

So, I have this awesome idea.

Someone should turn just-dice into a stock.  So people can trade it on bitfunder or something.  Now you ask why wouldn't you just do a regular stock?  That's because now people can buy options on the stock.  That would be cool.

A stock would be based off revenue from commissions and ads - that is a much better deal than being an investor.

No it would be a third party who invested in just-dice.

Doog doesn't need capital, so he doesn't need to sell stocks. You're proposing a pass through. Go ahead and set one up, offer an IPO, invest it all in JD, and distribute dividends above some bankroll if it is available a given week. Seems kind of silly to me since you could just directly invest in JD - but you're right, you want to setup a JD derivative and that needs some underlying security.

With almost 3.5M wagered and the site at a loss, I think he looking for a way to short J-D

there's an easy way to do that, gamble instead of invest 

[oda.krell]

Question regarding just-dice house edge

I'm trying to get a better understanding of the results of different investment strategies in j-d. Being the lazy person that I am, I chose to simulate first, before I try to solve anything analytically. But first, let me know if I understood the house edge on j-d correctly:

It is not an edge on the probabilities of the "dice throw" itself (like, say, in Roulette), but it is a reduced payout in case the player wins, right?

Example:

Say there is exactly one investor, who put in 100 btc, at 1% maxbet. A player places a maximum size bet of 1 btc.

In case the players loses, the investor's new balance is:
old_balance * (1 + 0.01) = 101 btc

In case the player wins, the investors new balance is:
old_balance * (1 - (0.01 * 0.99)) = 99.01,
where the factor 0.99 represents the house edge of 1%.

Yes? No?

[chriswen]

today, 17:58
all time: https://i.imgur.com/6OESfpm.png
2 weeks: https://i.imgur.com/iL4EA7h.png
week: https://i.imgur.com/IDcQyFE.png
day: https://i.imgur.com/yMKuPUd.png

[chriswen]

Question regarding just-dice house edge

I'm trying to get a better understanding of the results of different investment strategies in j-d. Being the lazy person that I am, I chose to simulate first, before I try to solve anything analytically. But first, let me know if I understood the house edge on j-d correctly:

It is not an edge on the probabilities of the "dice throw" itself (like, say, in Roulette), but it is a reduced payout in case the player wins, right?

Example:

Say there is exactly one investor, who put in 100 btc, at 1% maxbet. A player places a maximum size bet of 1 btc.

In case the players loses, the investor's new balance is:
old_balance * (1 + 0.01) = 101 btc

In case the player wins, the investors new balance is:
old_balance * (1 - (0.01 * 0.99)) = 99.01,
where the factor 0.99 represents the house edge of 1%.

Yes? No?

There's no max bet.  It's max profit.

[mechs]

Is it true FF Ownz went from 4 BTC all the way to 2000 BTC??

[maqifrnswa]

Question regarding just-dice house edge

I'm trying to get a better understanding of the results of different investment strategies in j-d. Being the lazy person that I am, I chose to simulate first, before I try to solve anything analytically. But first, let me know if I understood the house edge on j-d correctly:

It is not an edge on the probabilities of the "dice throw" itself (like, say, in Roulette), but it is a reduced payout in case the player wins, right?

Example:

Say there is exactly one investor, who put in 100 btc, at 1% maxbet. A player places a maximum size bet of 1 btc.

In case the players loses, the investor's new balance is:
old_balance * (1 + 0.01) = 101 btc

In case the player wins, the investors new balance is:
old_balance * (1 - (0.01 * 0.99)) = 99.01,
where the factor 0.99 represents the house edge of 1%.

Yes? No?

it is an edge on the probabilities of the dice throw.

Eg: gambler wins 2x if RNG picks a number > 50.5 or < 49.5 (roll hi or roll low). So if gamblers hits roll high, house wins from 0-50.5, player wins from 50.5-100

[oda.krell]

Question regarding just-dice house edge

I'm trying to get a better understanding of the results of different investment strategies in j-d. Being the lazy person that I am, I chose to simulate first, before I try to solve anything analytically. But first, let me know if I understood the house edge on j-d correctly:

It is not an edge on the probabilities of the "dice throw" itself (like, say, in Roulette), but it is a reduced payout in case the player wins, right?

Example:

Say there is exactly one investor, who put in 100 btc, at 1% maxbet. A player places a maximum size bet of 1 btc.

In case the players loses, the investor's new balance is:
old_balance * (1 + 0.01) = 101 btc

In case the player wins, the investors new balance is:
old_balance * (1 - (0.01 * 0.99)) = 99.01,
where the factor 0.99 represents the house edge of 1%.

Yes? No?

There's no max bet.  It's max profit.

Right. But let's say we take the usual 50% bet, then max bet = max profit (ignoring for a moment house edge)

In that case, did I get calculation of house edge right?

[oda.krell]

it is an edge on the probabilities of the dice throw.

Eg: gambler wins 2x if RNG picks a number > 50.5 or < 49.5 (roll hi or roll low). So if gamblers hits roll high, house wins from 0-50.5, player wins from 50.5-100

Where do you get this from?

The j-d FAQ seems to imply otherwise.

[maqifrnswa]

it is an edge on the probabilities of the dice throw.

Eg: gambler wins 2x if RNG picks a number > 50.5 or < 49.5 (roll hi or roll low). So if gamblers hits roll high, house wins from 0-50.5, player wins from 50.5-100

Where do you get this from?

The j-d FAQ seems to imply otherwise.

 user:
berathea (161188)
 date:
2013-09-29 18:39:30
 betid:
144345199
 lucky:
91.4117
 target:
>50.4999
 bet:
170.79869440
 payout:
2x
 profit:
+170.79869439


Two ways of looking at it:
1) 2x payout means you roll > 50.5
2) rolling > 50 means 1.98x payout

both are true, FAQ points out (2), but the bet log has lots of (1), as shown above.

[maqifrnswa]

Question regarding just-dice house edge

I'm trying to get a better understanding of the results of different investment strategies in j-d. Being the lazy person that I am, I chose to simulate first, before I try to solve anything analytically. But first, let me know if I understood the house edge on j-d correctly:

It is not an edge on the probabilities of the "dice throw" itself (like, say, in Roulette), but it is a reduced payout in case the player wins, right?

Example:

Say there is exactly one investor, who put in 100 btc, at 1% maxbet. A player places a maximum size bet of 1 btc.

In case the players loses, the investor's new balance is:
old_balance * (1 + 0.01) = 101 btc

In case the player wins, the investors new balance is:
old_balance * (1 - (0.01 * 0.99)) = 99.01,
where the factor 0.99 represents the house edge of 1%.

Yes? No?

There's no max bet.  It's max profit.

Right. But let's say we take the usual 50% bet, then max bet = max profit (ignoring for a moment house edge)

In that case, did I get calculation of house edge right?

No. If an investors has 100 BTC in an account and we're at full kelly (1%), a single 2x payout bet would yield +/- 1 BTC. The reason why is that a 2x bet is the range > 50.5 or < 49.5. The odds are different in the roll (see the log I posted above for an example).

[Peter R]

Okay, let's see what that would be like.

https://bitcointalk.org/index.php?topic=242962.msg2778468#msg2778468

Assumptions:
p = 0.495
b = 200 //I'll be assuming 5 000 bets of 200 BTC at 49.5% chance of winning
c = 5 000

Total BTC bet = 1 000 000 BTC
Expected BTC return for gamblers = 990 000 BTC
Expected Profit = 10 000 BTC
Expected Standard Deviation of amount returned to gamblers = 7000 BTC

Expected profit is (10000±7000) BTC
If actual profit was 0, than that would be 1.43 times the standard deviation away from the expected value.  If the profit followed a normal distribution, the probability of this distribution occurring through sheer chance is approximately 15.3%  

I don't think this is quite right (and was the same mistake I made at first).  I think the variance *for a single roll* is:

     V = B^2 (1-E)^2 (1-p) / p

which over 5000 rolls gives:

     House Profit = 10,000 +/- 14,000 BTC

using Chris's numbers.  Here was my proof:

Mean and Variance of a Gambler's Profits after a Sequence of Bets on Just-Dice.com

Let

    B = bet size
    P = gamber's profit
    p = probability of a win
    E = house edge

JD betting is a Bernoulli process.  There are two outcomes: win or lose.

	GAMBLER'S PROFIT TABLE
____WIN____		____LOSE____
probability = p		probability = 1-p
P = B(1-E-p)/p		P = -B

Gambler's expected profit per roll:

     <P> = (profit if he wins)x(probability of winning) + (profit if he loses)x(probability of losing)

            = B(1-E-p)/p  x  p     +     -B  x  (1-p)
 
            = -E B             (of course!)

Gambler's variance per roll:

      V = <(P - <P>)^2> = (B(1-E-p)/p    -    -E B)^2   x p        +        (-B    -    -E B)^2    x    (1-p)

                                  = B^2 (1-E)^2 (1-p) / p

Over multiple rolls his expected profit and variances add:

      <P_total> = <P>(1) + ... + <P>(n)

       V_total = V(1) + ... + V(n)

QED

[bingjiw]

The profit is negative again!!

Please change the max bet to 0.1% and change house edge to 1.5%.

Why SatoshiDice can always profit and Just-dice always loss all the profits and go to negative?

We need to change something.

[wolverine.ks]

what about partnering with Coinflow.co to offer graphs to investors and gamblers. it would relieve doog of work, add value to the site, probably some other good stuff too.

thoughts.

[Peter R]

How many repeat bets does it it take to push a gambler's +1 sigma line negative?

Equations:

     E = house edge, B = bet size, n = number of bets, p = chance of win

     total expected profit after n bets = -n E B

     accumulated variance = n B^2 (1-E)^2 (1-p) / p

So, the question is when does

     -n E B + sqrt(n B^2 (1-E)^2 (1-p) / p) = 0  ?

Solving for number of bets n gives

      n = (1-E)^2 (p-1) / (E^2 p)

So, with 1% house edge betting on p = 0.495, it takes 9999 bets.  With 2% house edge betting on p = 0.495, it only takes 2450 bets

It takes 4 X longer for a gambler's +1 sigma line to go negative at 1% than at 2% house edge.

[RationalSpeculator]

How many repeat bets does it it take to push a gambler's +1 sigma line negative?

It takes 4 X longer for a gambler's +1 sigma line to go negative at 1% than at 2% house edge.

What does that mean, a sigma line going negative?

[Peter R]

How many repeat bets does it it take to push a gambler's +1 sigma line negative?

It takes 4 X longer for a gambler's +1 sigma line to go negative at 1% than at 2% house edge.

What does that mean, a sigma line going negative?

I mean the curve 1 standard deviation above his expected profits.  Until this curve goes negative, it is really not that surprising at all for the gambler to keep popping up into profits.

[dooglus]

Why would I invest 500 BTC at 0.25% when I can just invest 125BTC at 1% then and not have the CP risk for the othet 375 BTC?

Because you would get less variance.

Suppose a whale bets max bet and wins 20 times.  If you invest 500 BTC at 0.25%, you'll still have 95% of your bankroll left:

>>> a=500
>>> for i in range(20): a *= (1-0.0025); print "%.2f" % (a*100/500,),
99.75 99.50 99.25 99.00 98.76 98.51 98.26 98.02 97.77 97.53 97.28 97.04 96.80 96.56 96.31 96.07 95.83 95.59 95.36 95.12

But if you invest 125 BTC at 1%, you'll have only 82% of it left:

>>> a=125
>>> for i in range(20): a *= (1-0.0100); print "%.2f" % (a*100/125,),
99.00 98.01 97.03 96.06 95.10 94.15 93.21 92.27 91.35 90.44 89.53 88.64 87.75 86.87 86.01 85.15 84.29 83.45 82.62 81.79

Your risk of ruin is much greater if you invest at 1% than if you invest at 0.25%.

Not sure that's true in the second case - as their BR is what they have left of the 125 plus the untouched 375 they have in cold storage.

Fair enough.  Here it is again taking that into account:

>>> a=500
>>> for i in range(20): a *= (1-0.0025); print "%.2f" % (a*100/500,),
99.75 99.50 99.25 99.00 98.76 98.51 98.26 98.02 97.77 97.53 97.28 97.04 96.80 96.56 96.31 96.07 95.83 95.59 95.36 95.12, ..., 0

>>> a=125
>>> for i in range(20): a *= (1-0.0100); print "%.2f" % ((a+375)*100/500,),
99.75 99.50 99.26 99.01 98.77 98.54 98.30 98.07 97.84 97.61 97.38 97.16 96.94 96.72 96.50 96.29 96.07 95.86 95.65 95.45, ..., 75

If the whale keeps winning when they invest 500 at 0.25%, they end up losing everything.  If they invest 125 at 1%, they end up only losing the 25% they invested...

[RationalSpeculator]

How many repeat bets does it it take to push a gambler's +1 sigma line negative?

It takes 4 X longer for a gambler's +1 sigma line to go negative at 1% than at 2% house edge.

What does that mean, a sigma line going negative?

I mean the curve 1 standard deviation above his expected profits.  Until this curve goes negative, it is really not that surprising at all for the gambler to keep popping up into profits.

If I remember correctly he took around 15,000 bets according to dooglus in the chat. In such case that is above the 9,999 bets you state, so in the negative curve line as you say. How high is the chance for that to happen according to your estimations/calculations?