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

[mechs]

FUD is growing: http://www.reddit.com/r/Bitcoin/comments/1nidbv/statisticsjustdice_scam_investigation_conclusion/

The fact is confidence in the site amoung investors is falling precipitously.  When investors all leave, the site will die.  Also, Dooglus' rep will be badly tarnished whether the allegations are true or not due to their statistical improbability.  Also, just as an observation, it is interesting at 0.25% we immediately became profitable and at 0.5% investors again losing badly.  Also the luck of the players at 100.49% after 150 million bets is odd since that implies an historical effective edge of 0.51%.  

I think the plan to add a variable risk profile for investors will siginificantly increase complexity and variance for individual players. I am in favor of keeping things simple with a fixed max profit per bet.  Our direct competitors who are trustbred are coinroll.it (3 BTC max profit) and primedice (40BTC max profit).  We are not over 250 BTC.  At the very least, we should increase the house edge for larger max profit bets.  It will still put us ahead of the competitors.

Lastly, this has been a gut-wrenching experience as an investor.  I was prepared for losses, but not for the amounts sustained for 3 reasons:
1.  The speed and improbability of the losses.  We have huge losses that occur in very short order
2. Magificaition of losses inflicted upon passive investors at those who successfully "day trade" their investment. These investors sustain bigger losses than the site
3. Much harder to get back to even since investor take losses and then get diluted by new investor (or day trading ones) after the drop.  In the last example, Nakowa brought the site down to 36k BTC and then invested over 12k himself diluting all other investors by over 25%.  He causes losses (due to whatever improbable mechanism) on his wagers and then he profits from the sites over the smaller wagers which tend to behave +EV.  It seems Nakowa has been able to overcome the +EV for his large bets for whatever reason (variance, luck, a good system, a flaw in RNG or cheating)

At the very least, the risks of points 2 & 3 should be added to the FAQ in the name of full disclosure.  I must admit my morale is shot to hell at this point looking at 30%+ losses and greatly diluted bankroll percentage due to all the reinvestment (by nakowa and daytraders).

[mechs]

Isn't there a way to set up a server that generates the server seeds and sends them to just-dice, but that doesn't allow those seeds to be read out ahead of time, i.e. before they are sent?

You'll always have an entity that is able to determine the server seed.

Can you explain why that is the case? Isn't there a way to set up as a system that, once it is running, doesn't allow changes to it anymore, i.e. it does what it needs to do (sending server seeds, reveal one if asked by player), but doesn't allow additional changes or attempts to read out data?

If that is a problem that is provably impossible to solve (say, a know problem in CS), then I'm not going to continue arguing of course

To calculate the result of the roll, the server MUST have the server & player seeds, and the nonce. With those three pieces of info it calculates the hash and generates the pseudorandom variable. The service is called "Provably Fair" because it is fair in the sense that since we have the hash of the server seed ahead of time, we can see that the server did not alter the server seed to alter the result of the roll.

However, that doesn't protect you from the server (or someone with access to the server, such as [theoretically] Dooglus or a hacker), from knowing the server seed, and thus knowing what number will roll each time, thus allowing that person to bet in such a way that they eventually come out a winner, even if they win/lose in the right proportions and make their play seem random.

I AM NOT TRYING TO SPREAD FUD. I am simply explaining the weakness of the system (Again, Dooglus said this stuff himself at the beginning of the thread).

There are ways of avoiding this situation where the server knows the server seed before you choose hi/lo, but it involves using, for example, the blockchain, since that is a trustless source of consensus. The way it works (I know some sites do this), is that you chose your roll (hi/lo) or whatever before block T is found, and then after the block T comes out, the roll is calculated as Hash(part of block T, client seed,....) etc. The problem is this is slow. If you want the fast style of play like in JD, then you need trust, ** as of right now **.

If you can find a way to keep the fast style of play and make the system trustless, that would be an amazing innovation. I don't think it'd be correct to say it's impossible, it simply hasn't been developed yet.

Thanks for the more detailed explanation. I should also say, I trust dooglus. It's more out of curiosity that I'm wondering if a trustless system not involving the blockchain could be set up...

Can you explain what is wrong with the following set-up:

1) the rng server/seed server

2) the usual just-dice server

3) the player.

the rng server allows exactly the following 3 calls made from outside:

- give me a random number (including a timestamp and a hash of the server seed that was used)

- reveal a server seed (this call be made exactly once per seed, the 2nd time it returns "already revealed")

- shutdown (needs a password, only dooglus has it)

Gambling works as follows: Player sends player seed and some 'bet identifier' to the seed server. Seed server generates a random number and sends it to player and just-dice server. Just-dice server does the rest (size of bet, storing the result, adding/deducting amount from players account etc).

Say an attacker wants to know the server seed you are using. He can ask the server to reveal it, but you will be able to tell afterwards (since the server doesn't allow revealing more than once). It doesn't prevent cheating in this way, but it makes it visible.

Say an attacker somehow intercepts the random number generated by the seed server. That's where the time stamp could help I think: tampering will take time, which will show itself in a delay between time stamp and bet executed on the just-dice server.

How to prevent reading out information if you have physical access to the server? Don't know if that's possible. Is there a way to encrypt more or less the entire execution of a program?

The only way to make fair to investors is to pull the random number from a provable RNG such as a hardware one.  Services such as random.org offer this.  Of course, this translate CP risk from the OP now to a different 3rd party.  Also, you would not have the standard type of provable fairness, though any player could audit random.org (or any other true RNG service) to prove the #s are fair to the player in that way.  I think that would satisfy most players.  Not sure if more investors would prefer blinding the OP to the random numbers but transferring it to a 3rd party.  

[nicolaennio]

Can we all agree that if the server seeds are compromised or (hypothetically) Dooglus is double-timing the investors (I'm not suggesting this is the case), that no amount of edge or limited max profit will save us??? Why does this keep getting brought up?

I disagree. Suppose that the max bet was, for example, 0.00001B and that an hacker get into the server and cheat the game by "winning", say, 100BTC generating different accounts. This would mean winning 10^8 times the max bet and the profit would deviate from the expected mean so much (probability being like one over millions) that no one would believe in the chance and we could safely believe the server has been compromised. Thus the website could automatically stop accepting bets or something like that.

If the server is hacked, then you need to divest, period. But there is no evidence so far that it is hacked or that nakowa knows the server seeds. He simply has a huge bankroll and can take the enormous swings. That isn't to say it's not possible.

You are saying that by yourself, "there is no evidence". The only evidence we could have is statistical and with such an high maxbet we cannot built it.

[GOB]

The only way to make fair to investors is to pull the random number from a provable RNG such as a hardware one.  Services such as random.org offer this.  Of course, this translate CP risk from the OP now to a different 3rd party.  Also, you would not have the standard type of provable fairness, though any player could audit random.org (or any other true RNG service) to prove the #s are fair to the player in that way.  I think that would satisfy most players.  Not sure if more investors would prefer blinding the OP to the random numbers but transferring it to a 3rd party.  

This would be worse than the current setup: without provable fairness, anyone with access to the server could slip in a number and you'd have no way of knowing that number wasn't chosen specifically to make you lose. The concept of "provable fairness" is actually a pretty genius innovation. Now the idea is to extend the concept somehow to protect investors as such as those in this site.

EDIT: Reduced length of quote above.

[tucenaber]

What's the matter with you people?


You don't have to quote everything!

[GOB]

Can we all agree that if the server seeds are compromised or (hypothetically) Dooglus is double-timing the investors (I'm not suggesting this is the case), that no amount of edge or limited max profit will save us??? Why does this keep getting brought up?

I disagree. Suppose that the max bet was, for example, 0.00001B and that an hacker get into the server and cheat the game by "winning", say, 100BTC generating different accounts. This would mean winning 10^8 times the max bet and the profit would deviate from the expected mean so much (probability being like one over millions) that no one would believe in the chance and we could safely believe the server has been compromised. Thus the website could automatically stop accepting bets or something like that.

If the server is hacked, then you need to divest, period. But there is no evidence so far that it is hacked or that nakowa knows the server seeds. He simply has a huge bankroll and can take the enormous swings. That isn't to say it's not possible.

You are saying that by yourself, "there is no evidence". The only evidence we could have is statistical and with such an high maxbet we cannot built it.

I get what you're saying. For a given level of profit for the hacker, say 100BTC like you say above, there is a max profit low enough such that if a hacker were to attain that 100BTC, it would be known with, say, 99.99% probability that it was not though luck. I agree! 100% done and done, no discussion.

However, what I am saying is slightly different or can be adjusted to account for what you are saying: A hacker that is willing to scale down their ambition, could always win and make their winning statistically indistinguishable from randomness. As long as they change their effective edge of their play from -1% (or -0.5%, or whatever it's currently at) to  a positive %, as an investor, you must divest, no matter how low max profit is. Because while your losses in absolute value are lower, your losses relative to your potential gain (which is greatly diminished at 0.00001btc max profit) are just as large as ever.

Thus: compromised site => divest, regardless of max profit.

[elm]

The only way to make fair to investors is to pull the random number from a provable RNG such as a hardware one.  Services such as random.org offer this.  Of course, this translate CP risk from the OP now to a different 3rd party.  Also, you would not have the standard type of provable fairness, though any player could audit random.org (or any other true RNG service) to prove the #s are fair to the player in that way.  I think that would satisfy most players.  Not sure if more investors would prefer blinding the OP to the random numbers but transferring it to a 3rd party.  
[/quote]

lets say it would be possible and it would give players, the OP and the investors a fair shot, why not test it over a week or even more (for example) and lets see how the whale will perform, or he will not show up at all. sure the whale could come and play and could have luck or he will lose and say goodbye because he has no chance without a cheat he might have. the question what OP and investors should ask themselves is if it is worth to have a whale with a cheat and losing all the money to the whale or to recover with the time without the whale (cheat).
sure it is not proven yet that the whale has a cheat. but the signs are more and more pointing in this direction. therefore a test period where the player, OP and investors are Provably fair could  clear things up.

just my 2 cents

[GOB]

What's the matter with you people?


You don't have to quote everything!

Nothing is wrong with me, it was a mistake. Thanks for the heads up.

[tucenaber]

Nothing is wrong with me, it was a mistake. Thanks for the heads up.

Thanks for editing. It wasn't directed at you in particular. There are others who shall remain unnamed

[mechs]

The only way to make fair to investors is to pull the random number from a provable RNG such as a hardware one.  Services such as random.org offer this.  Of course, this translate CP risk from the OP now to a different 3rd party.  Also, you would not have the standard type of provable fairness, though any player could audit random.org (or any other true RNG service) to prove the #s are fair to the player in that way.  I think that would satisfy most players.  Not sure if more investors would prefer blinding the OP to the random numbers but transferring it to a 3rd party.  

lets say it would be possible and it would give players, the OP and the investors a fair shot, why not test it over a week or even more (for example) and lets see how the whale will perform, or he will not show up at all. sure the whale could come and play and could have luck or he will lose and say goodbye because he has no chance without a cheat he might have. the question what OP and investors should ask themselves is if it is worth to have a whale with a cheat and losing all the money to the whale or to recover with the time without the whale (cheat).
sure it is not proven yet that the whale has a cheat. but the signs are more and more pointing in this direction. therefore a test period where the player, OP and investors are Provably fair could  clear things up.

just my 2 cents

[/quote]
The problem is Dooglus will resist saying how do you know random.org will not cheat. What would be your counter to that?

[theskillzdatklls]

Why not get the site audited like the major poker sites (i.e. pokerstars) are for their RNGs?  Probably won't cost more than Doog can afford to pay for, especially if it increases site confidence.

[elm]

The only way to make fair to investors is to pull the random number from a provable RNG such as a hardware one.  Services such as random.org offer this.  Of course, this translate CP risk from the OP now to a different 3rd party.  Also, you would not have the standard type of provable fairness, though any player could audit random.org (or any other true RNG service) to prove the #s are fair to the player in that way.  I think that would satisfy most players.  Not sure if more investors would prefer blinding the OP to the random numbers but transferring it to a 3rd party.  

lets say it would be possible and it would give players, the OP and the investors a fair shot, why not test it over a week or even more (for example) and lets see how the whale will perform, or he will not show up at all. sure the whale could come and play and could have luck or he will lose and say goodbye because he has no chance without a cheat he might have. the question what OP and investors should ask themselves is if it is worth to have a whale with a cheat and losing all the money to the whale or to recover with the time without the whale (cheat).
sure it is not proven yet that the whale has a cheat. but the signs are more and more pointing in this direction. therefore a test period where the player, OP and investors are Provably fair could  clear things up.

just my 2 cents

The problem is Dooglus will resist saying how do you know random.org will not cheat. What would be your counter to that?
[/quote]

I would say that if random.org is accepted by all investors it should be fine for Dooglus because he is not invested and if he is invested I would ask him to divest for the given time because he and the whale are the real winners for now. I think that random.org can close tomorrow if they would cheat or let it happen.

also it would be good for Dooglus(JD) reputation and it will give a big advertisement bonus for JD. the other question is are You sure that random.org is the only solution?

[GOB]

The problem is Dooglus will resist saying how do you know random.org will not cheat. What would be your counter to that?

I would say that if random.org is accepted by all investors it should be fine for Dooglus because he is not invested and if he is invested I would ask him to divest for the given time because he and the whale are the real winners for now. I think that random.org can close tomorrow if they would cheat or let it happen.

also it would be good for Dooglus(JD) reputation and it will give a big advertisement bonus for JD. the other question is are You sure that random.org is the only solution?

Guys, the problem with using random.org to directly determine the result of the roll is not that random.org might be compromised (which we wouldn't know), but rather that you'd have no way of knowing if doog's server was actually spitting out a random number or not-- i.e. someone in control of the server could make it so it could arbitrarily make certain rolls win or lose at will. You'd be taking one step backwards dumping the provably fair system, and not gaining anything.

[mechs]

The only way to make fair to investors is to pull the random number from a provable RNG such as a hardware one.  Services such as random.org offer this.  Of course, this translate CP risk from the OP now to a different 3rd party.  Also, you would not have the standard type of provable fairness, though any player could audit random.org (or any other true RNG service) to prove the #s are fair to the player in that way.  I think that would satisfy most players.  Not sure if more investors would prefer blinding the OP to the random numbers but transferring it to a 3rd party.  

lets say it would be possible and it would give players, the OP and the investors a fair shot, why not test it over a week or even more (for example) and lets see how the whale will perform, or he will not show up at all. sure the whale could come and play and could have luck or he will lose and say goodbye because he has no chance without a cheat he might have. the question what OP and investors should ask themselves is if it is worth to have a whale with a cheat and losing all the money to the whale or to recover with the time without the whale (cheat).
sure it is not proven yet that the whale has a cheat. but the signs are more and more pointing in this direction. therefore a test period where the player, OP and investors are Provably fair could  clear things up.

just my 2 cents

The problem is Dooglus will resist saying how do you know random.org will not cheat. What would be your counter to that?

I would say that if random.org is accepted by all investors it should be fine for Dooglus because he is not invested and if he is invested I would ask him to divest for the given time because he and the whale are the real winners for now. I think that random.org can close tomorrow if they would cheat or let it happen.

also it would be good for Dooglus(JD) reputation and it will give a big advertisement bonus for JD. the other question is are You sure that random.org is the only solution?

No there are other true random number services.  Random.org just one of the best known ones
[/quote]

[qxzn]

I will tell you for example that I am 25% down and I invested back in July and I stayed invested throughout

Wow.
Man, good luck to get positive again, with all people investing when it is low (like now) and divesting when it is high.
It will be harder :/

These guys are IMO Gamblers that have found a way to dodge the house edge.

There should be something implemented to discourage this like f.e. a higher commission on high turnover invests, divests. Or a instant fee on every invest (that has to be made up before an invest has to pay any commissions of course).

I very much like the idea of an invest fee.

[tucenaber]

Also, just as an observation, it is interesting at 0.25% we immediately became profitable and at 0.5% investors again losing badly.  Also the luck of the players at 100.49% after 150 million bets is odd since that implies an historical effective edge of 0.51%.  

I'm beginning to agree with you about the max bet. Did you read my post about it?

Regarding the luck, you may want to read Dooglus' explanation for it one more time. The discrepancy comes from 2 instead of one wins at 0.00001%. That makes sense to me at least.

Lastly, this has been a gut-wrenching experience as an investor.  I was prepared for losses, but not for the amounts sustained for 3 reasons:
1.  The speed and improbability of the losses.  We have huge losses that occur in very short order
2. Magificaition of losses inflicted upon passive investors at those who successfully "day trade" their investment. These investors sustain bigger losses than the site
3. Much harder to get back to even since investor take losses and then get diluted by new investor (or day trading ones) after the drop.  In the last example, Nakowa brought the site down to 36k BTC and then invested over 12k himself diluting all other investors by over 25%.  He causes losses (due to whatever improbable mechanism) on his wagers and then he profits from the sites over the smaller wagers which tend to behave +EV.  It seems Nakowa has been able to overcome the +EV for his large bets for whatever reason (variance, luck, a good system, a flaw in RNG or cheating)

At the very least, the risks of points 2 & 3 should be added to the FAQ in the name of full disclosure.  I must admit my morale is shot to hell at this point looking at 30%+ losses and greatly diluted bankroll percentage due to all the reinvestment (by nakowa and daytraders).

I'm in the same position as you so I know the feeling. I don't agree with the improbability of the losses. I ran some simulations and full Kelly can give very volatile results. Go back a few pages and take a look.

Day trading is a non issue I think, but the dilution by new investors is very painful and I wish there was a solution. I don't have one though.

Long term I think we need to manage the risk of catastrophic outliers much more carefully. Because these events are not so extremely unlikely that have (at least by me) been assumed.

I will show another graph I made, showing the probabilities of a lucky player taking a big chunk of the bankroll starting with very little money. (0.5%, 1%, 2%, 5% and 10% of the bankroll)

This is the probability that it happens to any given player (that plays very aggressively). Since there are millions of bets placed, the results get magnified and are bound to happen from time to time. I haven't quantified the cumulative risk so far, but I will try to do that.

[Rampion]

I don't like the investment fee, I think investment should be encouraged by being totally free.

On the contrary, I'm entertaining the idea that a divestment fee applied on profit only could be good for the long term investors and thus the Casino. It would be a fee independent from the weekly one, and it could be redistributed between investors that did not divest, being a reward for maintaining a stable roll for the Casino. At first sight it seems to me a nice way to minimize the risk of "bank run", which was the main concern during nakowas winning streaks.

[mechs]

I don't like the investment fee, I think investment should be encouraged by being totally free.

On the contrary, I'm entertaining the idea that a divestment fee applied on profit only could be good for the long term investors and thus the Casino. It would be a fee independent from the weekly one, and it could be redistributed between investors that did not divest, being a reward for maintaining a stable roll for the Casino. At first sight it seems to me a nice way to minimize the risk of "bank run", which was the main concern during nakowas winning streaks.

I like a divestment fee and it should only kick in if you divest more than once every 10 days. 

[nicolaennio]

I don't like the investment fee, I think investment should be encouraged by being totally free.

On the contrary, I'm entertaining the idea that a divestment fee applied on profit only could be good for the long term investors and thus the Casino. It would be a fee independent from the weekly one, and it could be redistributed between investors that did not divest, being a reward for maintaining a stable roll for the Casino. At first sight it seems to me a nice way to minimize the risk of "bank run", which was the main concern during nakowas winning streaks.

I like a divestment fee and it should only kick in if you divest more than once every 10 days. 

I like the idea too of a divestment fee. A stable bankroll is reasonable requirement for investors.

[maqifrnswa]

while we're throwing out opinions:

1) I don't daytrade and don't care if people daytrade. I'd prefer less fees in general, so I'm against fees. I don't care about delays. I don't think a stable bankroll is a requirement for me... maybe for max bet gamblers, but as an investor I prefer smaller bankrolls.

2) There are perfectly good arguments for and against full kelly. IMO, the best compromise is to let people choose their own (i.e., Doog's market). I've seen several people claim that variance for the "little" kelly people goes up if you allow a market. Could someone explain that? I see variance staying the same (actually going down, depending on implementation) for the little kelly group. Variance is a function of amount wagered per bet and volume. If someone chooses 0.5 kelly per bet in the market, they will be wagering exactly the same as they are now for full bets and are wagering less than they are now for < full bets. Therefore, they have the same variance or less than they current have. Is the argument that people will do fewer bets but bigger bets in the market system, thus increasing variance? So little kelly people wager the same but there are less frequent bets?