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

[Rampion]

Again my losses grow and my break even point increases in relation to the house profit... Yesterday at this exact point in house profit my losses were lower, and BTW my share in the house roll has been diluted dramatically.

Same for me, at some point I saw the investment changing of 12K (from 36 to 48), so I guess there is a big investor there who joined after some losses and raised the break even point.

Looks like only the braves got a lot to lose from the situation...

The "big investor" is Nakowa, the whole 12k belong to him. I just read the chat logs, he seems to be past his delusion. He is said aprox. 1 hour ago he just realized that there is no flaw in the site, is just that the 1% house edge is so small that he can create huge variance and end up ahead in the short term by playing with his enormous bankroll... And he also said he realized that if he keeps playing forever he will lose it everything.

This said, I also checked the thread about statistical analysis of Satoshi Dice, precisely by Dooglus. Even with a 1.9% house edge, there were months that the site lost quite a lot of money... I'm now wondering how many billion bets we will need for the 1% edge to do its thing and thus investors to profit.

[elm]

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[/quote]

The "big investor" is Nakowa, the whole 12k belong to him. I just read the chat logs, he seems to be past his delusion. He is said aprox. 1 hour ago he just realized that there is no flaw in the site, is just that the 1% house edge is so small that he can create huge variance and end up ahead in the short term by playing with his enormous bankroll... And he also said he realized that if he keeps playing forever he will lose it everything.

[/quote]

come on......what do you expect him to say? hey guys I have found a nice cheat and I am taking all Your money, please stay invested.

[Akka]

Great  

So if he keeps this 12k investment I (and many others I assume) don't even need to dream about getting back their loss any time soon.

I congratulate him to being past his delusion. A gambling addiction always ends in a disaster. So I hope for him to be past it. Still this hurts  

[Rampion]

Great  

So if he keeps this 12k investment I (and many others I assume) don't even need to dream about getting back their loss any time soon.

I congratulate him to being past his delusion. A gambling addiction always ends in a disaster. So I hope for him to be past it. Still this hurts  

Yep, it hurts, but it is what it is. Being the house of an online casino with such a small edge was never meant to be a "stable, long-term investment" as many delusional investors want to believe. We are gambling too, its just that our gamble is +EV, but for that positive expected value to be realized we need to look to the very long term. Plus, the fact that the "never divest" guys as myself took the lion share of the losses and continually get diluted on the profits make the "very long term" even longer

Meanwhile, Nakowa even said on the chat:

10:02:25 (136175) <allover> don't be hostile to me. I'm just an investor (gambler) as you all here.

Well, admitting he is a gambler is indeed a good step towards redemption.

[eltopo]

Watching yesterday's ridiculous action and reading the comment above from eltopo (There is no regression to the mean. If we're at +5000, we can go to +10000 as likely as to 0.) have made me realize something: while that statement is true, there is a way you can successfully daytrade because while you do not know future rolls, there is some publicly available info about the future. Bear with me:

IF:

A) You know nokawa follows a random walk, up and down, betting close to max bet, until he loses his entire last deposit OR he makes X BTC (for example, yesterday it was 2k + making up for his previous losses, so 5k)
B) You can see what his balance is (people seem to be able to do this, not sure how)
C) You can see when he is depositing again
D) All other betting going on is relatively so small that we can safely ignore it.

THEN:

A strategy where you divest when he is near losing his last deposit and invest when he is near reaching his goal, then you can make the decision to daytrade EV+ with respect to passive investing. This is because when he is near losing his entire deposit, you only stand to gain very little from him losing it all, and a lot to gain if he doesn't; similarly, when he is near his goal, you stand to lose little if he reaches his goal as compared to how much you stand to gain if he dips back down toward losing his latest deposit. Finally, because (somehow) people know how much his balance is and they see when he has incoming deposits, even if you divest and he loses another, say, 500BTC and loses his deposit, there will be a break while he reloads, so you can invest again and start a new "session".

The point is, like dooglus said, the downside to daytrading is that you might miss a huge 30k slide by nakowa at any point. But the problem with this is that you WON'T miss it (if you're paying attention and day trading), because you'll see nakowa lose his whole balance and then see the new deposit coming.


Does this make sense?

No. If he loses his whole balance 1 or 2 or 3 times, there is no reason to believe that with the next deposit his chances are getting bigger to win his losses back. Same applies for his winning streaks: If investors lose several thousands to him, it's possible that he doesn't achieve his goal yet, continues with playing and wins another few thousands.

If investors want to daytrade, let them do it.

[wachtwoord]

who could know the server feed? no one? IMHO it should be discussed if it is provably fair only for the player? but how about the investors? is JD provably fair for the investors?

This has been discussed lots of times before.  I have access to the server, and can see the server seeds.  That would allow me to cheat.  I've seen it suggested several times that I'm nakowa, for instance.  I don't know of a way to make the game provably fair for investors, but would be interested to find one.

For one thing it would put an end to emails threatening to expose me, like this one that came today:

Date: 2013-09-30 6:36pm
Subject: Hey dooglus   

Dear dooglus,

I noticed that you are a genius. Since you have database access to secret keys, you can predict the future outcome of dice rolls. For example, you dooglus (site owner), can create a "whale" account. Then login to your site's database, and find the secret key for "whale" account, AND then use this secret key to predict future dice rolls!

So... you are basically stealing money from investors by playing with your own money, and winning as the "big whale".

Of course, regular players cannot predict dice rolls, because they don't know the secret key. You however, know the secret key of any account in real-time!

I know, you are making a lot of money doing this, and I don't mind that... However I also want a littlebit money for discovering this loophole that you are using. Keep in mind, that I have NOT told this to anyone!

I offer you this:

Send me 400 bit coins to this address: 12xV47fNBVdjPtRSghgCAU7tFzQ6cYCuvp

AND I will keep my mouth shut, you have my promise. I admire you, and I will never break my word. How can you trust me? Well, you can't... But you have more promise, and I will respect you. This is a one time payment. I will never keep asking you for more money!

If I don't receive this payment ASAP (I will give you a 24 hour deadline). Then I will release this information to the general public, and all of the investors will pull out their money from your site! Be it in your chat room, on bitcoin forum etc... everywhere!

Of course, I am aware of the following actions that you may take: 1. You may ignore me, and will use the next 24 hours to steal as much money as you can, before I release this information to the public

OR

You can comply with me, by sending me 400 bit coins, and I will keep my mouth shut. By sending me the 400 bit coins, I will let you run your site a lot longer, and you will be able to make a lot more money!

I am actually very proud for discovering how you are doing this, and I want to get rewarded. Please think, and don't be greedy! Be smart. I will keep my silence. I promise!

Sincerely,
Your admirer

My favourite bit was "How can you trust me? Well, you can't..."

Are you planning to press charges or just going to let it slide?

[nicolaennio]

Again my losses grow and my break even point increases in relation to the house profit... Yesterday at this exact point in house profit my losses were lower, and BTW my share in the house roll has been diluted dramatically.

Same for me, at some point I saw the investment changing of 12K (from 36 to 48), so I guess there is a big investor there who joined after some losses and raised the break even point.

Looks like only the braves got a lot to lose from the situation...

The "big investor" is Nakowa, the whole 12k belong to him. I just read the chat logs, he seems to be past his delusion. He is said aprox. 1 hour ago he just realized that there is no flaw in the site, is just that the 1% house edge is so small that he can create huge variance and end up ahead in the short term by playing with his enormous bankroll... And he also said he realized that if he keeps playing forever he will lose it everything.

This said, I also checked the thread about statistical analysis of Satoshi Dice, precisely by Dooglus. Even with a 1.9% house edge, there were months that the site lost quite a lot of money... I'm now wondering how many billion bets we will need for the 1% edge to do its thing and thus investors to profit.

I run some simulations with a starting bankroll of 1BTC and a gambler who is playing 1% of the bankroll at 49.5%. X-axis is the number of plays (multiply by 10^5) and y-axis is the empirical probability of ending up with less than 1 BTC.

[VTC]

Investors balances needs to be updated.  Why not just make a text file on the server that auto updates like wagered.txt and link to it on the forums.  One less task to do weekly 

That's a good idea.

I've updated the OP, but will do what you suggest in future.

Note that from this week I'm not listing the 'base' amount for accounts with 0 invested, so the list is quite a bit shorter than previous weeks.

Can you update investors balances for last two Sundays. 

[integrity42]

dooglus, that blackmail email for 400BTC was hilarious!!! thanks for posting.

[tucenaber]

So, what the rest of investors would think about trying with a 1.5% edge? It's going to be difficult to have doog agree on that as all the marketing of JD is based on the extremely low 1% edge, but I would love to hear your reasoned opinions.

I have run some "crazy whale" simulations. Assuming there is a lone whale betting max at all times trying to break the house, and also assuming that he keeps playing until going broke.

What is the minimum bankroll we risk until the whale busts?

I was surprised to see that the house edge has almost no influence on this number! Almost all risk comes from the maximum allowed win. Of course he will survive at lot fewer plays with a bigger house edge but that is not the question I was interested in.

Note that the simulations are not a fixed number of plays, rather they show the complete lifetime of the player.

The initial capital of the whale is not very influential either, surprisingly (but I didn't make a graph showing that) The graphs below use a player starting capital of 25% of the house.

On the horizontal axis are the percentiles and the vertical axis is the minimum bankroll.



If we compare this to the effect of changing maximum win size:



I conclude that Dooglus did the right choice when he lowered the maximum win to 50% of the Kelly bet. I was critical at first, but I'm even starting to think that 25% was not such a bad idea.

These results also seem to indicate that raising the house edge is of little use.

[Rampion]

Tucenabar, I cannot really understand you graphs, care to explain them again?

[Lohoris]

So, what the rest of investors would think about trying with a 1.5% edge? It's going to be difficult to have doog agree on that as all the marketing of JD is based on the extremely low 1% edge, but I would love to hear your reasoned opinions.

I would totally agree.

After all, this site is made for profit, so if profit isn't there, we need to change something.

[pascal257]

So, what the rest of investors would think about trying with a 1.5% edge? It's going to be difficult to have doog agree on that as all the marketing of JD is based on the extremely low 1% edge, but I would love to hear your reasoned opinions.

I would totally agree.

After all, this site is made for profit, so if profit isn't there, we need to change something.

If gamblers switch to another site with lower house edge, there's also no profit.

[tucenaber]

Tucenabar, I cannot really understand you graphs, care to explain them again?

Ok, I will try. (I updated the previous post with a line explaining what's on the axes)

We know that the player will alway go bust eventually, if he keeps playing. So I ignored the number of plays and just asked the question, during the whole time from the point he starts and until he goes bankrupt, what is the minimum bankroll for the house? Or equivalently, what is the maximum capital of the player?

The graphs show the percentiles of the minimum bankroll.

With kelly bet. There is a 10% chance that the bankroll goes down to below 0.35, i.e. 35% of initial bankroll.

With 50% Kelly, there is a 10% risk of reaching going below 0.57 or 57% of initial bankroll.

With 25% Kelly bet, the 10% risk is 0.74 or 74%.

Does that make it clearer? I'm not very good at explaining I'm afraid

[RationalSpeculator]

Tucenabar, I cannot really understand you graphs, care to explain them again?

Ok, I will try. (I updated the previous post with a line explaining what's on the axes)

We know that the player will alway go bust eventually, if he keeps playing. So I ignored the number of plays and just asked the question, during the whole time from the point he starts and until he goes bankrupt, what is the minimum bankroll for the house? Or equivalently, what is the maximum capital of the player?

The graphs show the percentiles of the minimum bankroll.

With kelly bet. There is a 10% chance that the bankroll goes down to 0.35, i.e. 35% of initial bankroll.

With 50% Kelly, there is a 10% risk of reaching 0.57 or 57% of initial bankroll.

With 25% Kelly bet, the 10% risk is 0.74 or 74%.

Does that make it clearer? I'm not very good at explaining I'm afraid

Very clear, thanks so much. Very valuable information!  


Is it correct to state that it now already happened that a whale took bankroll down to 57%? So the 10% chance already happened?

(Considering bankroll should now normally be around 40k + 37k profit, but is only 40k (or 50k with whale included).)

[wachtwoord]

Tucenabar, I cannot really understand you graphs, care to explain them again?

Ok, I will try. (I updated the previous post with a line explaining what's on the axes)

We know that the player will alway go bust eventually, if he keeps playing. So I ignored the number of plays and just asked the question, during the whole time from the point he starts and until he goes bankrupt, what is the minimum bankroll for the house? Or equivalently, what is the maximum capital of the player?

The graphs show the percentiles of the minimum bankroll.

With kelly bet. There is a 10% chance that the bankroll goes down to 0.35, i.e. 35% of initial bankroll.

With 50% Kelly, there is a 10% risk of reaching 0.57 or 57% of initial bankroll.

With 25% Kelly bet, the 10% risk is 0.74 or 74%.

Does that make it clearer? I'm not very good at explaining I'm afraid

Nice way to look at it

[tucenaber]

So, what the rest of investors would think about trying with a 1.5% edge? It's going to be difficult to have doog agree on that as all the marketing of JD is based on the extremely low 1% edge, but I would love to hear your reasoned opinions.

I would totally agree.

After all, this site is made for profit, so if profit isn't there, we need to change something.

So your argument is the classical "Something must be done, this is something therefore it should be done"  

[RationalSpeculator]

A little on Naks run last night

He started at about -2839 with 36k invested amd max profit about 180.  Got down to +300ish and ran it back up to -4300 up 1500ish.  All in about a half hour.

Then he invested about 12k and site sits at -2700 now and with about 25% of bankroll he made about 400 of the 1600 coins thus the 36k bankroll he prior to him investing is down 300 coins.

si his total haul since lasr night is 1900 coins nice day at the office.

He definitely knows how to annoy the investors.

Thx for the report.

[GOB]

Given that the probabilities don't change, it wouldn't make sense to invest/divest on winning/losing streaks. That's investors fallacy.

Unless for example the hash distribution is not random, or the server seed is not safe.

As pointed out before, when nakowa is betting, there is a lot of moves, and profit get easily + 10 k or - 6k within hours.
At the end of the day, it always end up with a large negative profit.


Some people says that nakowa got 3 or 4 times the website bankroll and can take a lot of losses ...
So it makes sense to divest when he is loosing a lot, and invest at the end of the period, or when he got lucky.


As I said, you can make up to 30 % profit daily with that, with only investing and divesting once (at the correct time).

No you cannot, you are trying to time the market: a losing proposition. Staying invested throughout is the most profitable strategy. If you want to avoid a lot of variance you can divest. This is why Dooglus divested!

This.

There is no regression to the mean. If we're at +5000, we can go to +10000 as likely as to 0. If someone wants to time the market, do it. You can win or you can lose, but math is not on your side.

For those whining around everytime the profit is down, that's simply because you can't stand the variance. Don't call out for further reglementations, just divest partly. I have done this yesterday myself, I divested about 60% before going to sleep, because I don't want to wake up with a 20% loss.

Regarding day-trading, I have been of the opinion that it is largely irrelevant from the position of the day-trader: you have no knowledge of the next rolls, so if you believe you know when wins or losses are coming, you are falling for the same good'ole gambler's fallacy. Additionally, from the perspective of passive investors, ex-ante it's irrelevant because daytraders could just as easily divest before a huge drop as they could before a huge gain.

Also, don't forget that you're likely to only be hearing from those day traders that have done well, but not from those that do poorly. I'll break the silence of the failed daytraders right here: I tried it once and divested before a HUGE nakowa 7000btc runup, and then invested and immediately took an even bigger drop. F*ck that. So it's not all sunshine and happiness in daytrade land.

HOWEVER!!!

Watching yesterday's ridiculous action and reading the comment above from eltopo (There is no regression to the mean. If we're at +5000, we can go to +10000 as likely as to 0.) have made me realize something: while that statement is true, there is a way you can successfully daytrade because while you do not know future rolls, there is some publicly available info about the future. Bear with me:

IF:

A) You know nokawa follows a random walk, up and down, betting close to max bet, until he loses his entire last deposit OR he makes X BTC (for example, yesterday it was 2k + making up for his previous losses, so 5k)
B) You can see what his balance is (people seem to be able to do this, not sure how)
C) You can see when he is depositing again
D) All other betting going on is relatively so small that we can safely ignore it.

THEN:

A strategy where you divest when he is near losing his last deposit and invest when he is near reaching his goal, then you can make the decision to daytrade EV+ with respect to passive investing. This is because when he is near losing his entire deposit, you only stand to gain very little from him losing it all, and a lot to gain if he doesn't; similarly, when he is near his goal, you stand to lose little if he reaches his goal as compared to how much you stand to gain if he dips back down toward losing his latest deposit. Finally, because (somehow) people know how much his balance is and they see when he has incoming deposits, even if you divest and he loses another, say, 500BTC and loses his deposit, there will be a break while he reloads, so you can invest again and start a new "session".

The point is, like dooglus said, the downside to daytrading is that you might miss a huge 30k slide by nakowa at any point. But the problem with this is that you WON'T miss it (if you're paying attention and day trading), because you'll see nakowa lose his whole balance and then see the new deposit coming.


Does this make sense? So, this would push me toward being anti-daytrading being permitted, but so far I haven't heard any effective methods for preventing it given that you can open unlimited accounts.

It does not make sense. I cannot see why everyone here would blame a martingale 1,2,4,8, etc but accept this day-trading discussion. Are you trolls or what?

Trolling? What part of what I wrote makes you think I'm trolling? I was just thinking out loud, playing devils advocate on the daytrading thing (I made it clear at the beginning of my post). And what does, "I cannot see why everyone here would blame a martingale 1,2,4,8" mean?

[integrity42]

Dooglus,

Is there anything you can do to fix the lag issue? many bets take 5-10 seconds to finish.  I'm able to spam 5-10 bets in a row, and then have to wait 5 seconds on random bets.

You can see that it makes for frustrating gambling, and since that is our main product, what can we do address this service issue ??