Topic: [CLOSED] S.DICE - SatoshiDICE 100% Dividend-Paying Asset on MPEx - page 45. (Read 316442 times)

throwaway and thoughtfan, excellent comments from both of you. I wish all the discussion on BitcoinTalk was of this level

I'll comment on a few points.

1) I do know who one of the whales is, as he recently made himself known to me. I have no idea whether he will return in the future, but there is no reason for him not to. While there have been many wild theories on who or what he is, I'll say that in this case at least reality is far less interesting than the imagination And for the 50,000th time, no the whales aren't me nor anybody who works with me, nor any person doing such deception on behalf of the site in order to puff up numbers in any way whatsoever. Additionally, SD has never and will never run bots on itself, other than for small narrow testing purposes. There was some speculation that the last jackpot winner (~1900ish btc) was an SD bot. Not true at all, and in fact the winner of that contacted me since his payment had gotten delayed. It was fun chatting with him and learning what he plans to do with the money, nothing crazy, just somewhat inspiring and very nice to hear. 

2) The wild exchange rate of Bitcoin is absolutely going to effect SD share price in one way or another. While it seems that SD maintains a reasonable floor of usage in nominal BTC terms, I think if the price of BTC doubles the amount wagered at SD will be lower in BTC terms (though not half). We can call this the "elasticity of wagering" perhaps   In any case, I think people should expect that to some degree, if Bitcoin price skyrockets, the nominal price of shares (whether SD or otherwise) should fall somewhat. Does this mean it's better to invest in BTC than in shares of BTC companies? Not necessarily. It depends on your risk preferences.

3) Contrary to how it may appear, I'm spending a lot of time on SD. Much of this is in the legal world, and in putting a small team together to build it more professionally. These things aren't apparent on the surface, but they're happening. When some of this foundational stuff is in place, the visible aspects of SD will be built up further. While I have increased advertising for SD in the last couple weeks, I am also wary of making the site too high profile too soon. Read into that what you will, but it's done with purpose.

4) This wasn't mentioned in the recent comments here, but has obviously been a hugely hot topic - the matter of SD and "blockchain spam." While in general I believe that altering SD merely to coddle and soothe the blockchain is bad policy (because it enables the community to retain a false sense that the issue of dust/spam is not urgent), I am working on a couple things which will indeed alleviate some of the strain on the blockchain. These things are being done mostly for user experience, so the fact that they take burden off the blockchain is but a bonus. Regardless, hopefully some of the wild critics of SD will be happy with the move, though I assume most will continue launching attacks at me personally, saying I've been consumed by greed and don't care about the community, blah blah blah. I guess if you're not making enemies, you're doing it wrong. My intention though is not to be combative, and while I disagree with the thesis of my opponents, I nevertheless respect (most of) them as members of the community and don't want to cause unneeded angst. I guess this was a long way of saying, SD will be developing in a way that should make some critics somewhat happy. Ultimately, it is a profit-making enterprise and will act in every ethical way toward that end,  and Bitcoin better be able to handle such enterprises.

Cheers,
-Erik

That's correct For every order, MPEx-signed receipt is shown in order details to prove it. Ask/discuss CoinBr further here or on another forum.

Wow, there's someone left?! How do you do it!


Not to detract from what I think is perfectly valid criticism, there have been a few fires to put out. Not just the recent fork which affected everyone, not just the DDoS extravaganza which affected pretty much all the top dogs (MtGox being the most recent inductee in that exclusive club) but also two (or three?) different methods to attempt double-spends that were averted but required some code changing (at least iirc from what was publicly discussed). So I would guess even if not much went into visible marketing a lot of hard work went into strengthening the actual platform, which I'd count as value-adding.


20k or two million a month. A scary figure.


Now I'm curious how this will play out.


Guy's name is Mircea (and MPEx is the exchange, MPOE is either me or the options bot) and his game is building Bitcoin finance, or to quote,


Small investors buying on PTs still reflects in the MPEx liquidity, and in the liquidity of the asset.

IRL the concept of "accredited investor" exists, which basically boils down to "someone who knows enough of this world to be able to protect his own money". Like it or not the truth is that most people don't know enough of this world to be able to survive on their own. Governments have to - it's not a matter of wanting to, they have to - step in and protect the retail/consumer "investor" because otherwise he'll get fleeced, and that fleecing will finance the unsavory elements and their activities, which results in pain across the board.

IRL you are an "accredited investor" by means of owning a lot of USD. It's not practical to verify how much BTC someone owns, and it's also not BTC-ish to do. MP opted to use a simpler and more flexible approach: if you can afford 30 BTC you're big enough to play. People obviously trash and cuss and complain, but this barrier is there for their protection, and it indeed works well to protect them. It also works well to protect everyone else, because as a company if your stock is held by a large number of clueless/impressionable/non committed people you're in for a world of hurt. This point is amply discussed by Buffett, I won't extend this endless post with more quotes but if you wish to look up what WB had to say about investors and pricing for Berkshire you'll see what I mean.


I'd say you made the right choice and thank you for doing it. The more openly things are discussed, the better off everyone will be.

I guess we're getting offtopic here, but this sounds quite cool and it's good to know.
So, you're saying that if I put a sell order on CoinBr, it will show up on MPOE, and you don't have your own internal exchange? That's nice.

CoinBr broker allows everyone to participate on MPEx directly and online without paying 30BTC for a seat. There are also other offline brokers.

From passthroughs only Havelock has the possibility of automatic transfer of S.DICE from/to MPEx, all others involve request to human PT operator.

Yes, CoinBr uses extra machine to store/access GPG key, with passphrase that must be entered manually on startup and stored in memory only.

"I guess a significant number are and will continue to be SD players who buy when they realise they can own part of the 'house'."

That's why it would be nice if there was an option for them to participate in MPOE. With 30btc setup fee, they have to use passthroughs, and passthroughs - if I understand correctly - don't give too much liquidity on the primary market (because passthroughs have their internal trading system - right?)

Side note - how do you guys protect your GPG keys? I used to have a separate Asus EEE laptop for this & for the BTC wallet, but right now I just have an SD card I carry around with me, and I only put it into my laptop when I trade (or "used to trade"). And of course the key is strongly encrypted - 50-character passphrase...

Thanks for sharing your the reasoning behind your decision.  I suspect, as has been discussed in the SD threads, that you are not alone in coming to similar conclusions - hence, as you say, the price drop - and that those who have not done so already may follow suit.

You say '...I'm surprised [a decrease in BTC profits due to the rapid increase in usd/btc] hasn't happened already...'

I have been pleasantly surprised by this too but thinking about it, for as long as SD remains one of the first things a significant proportion of newbies come across, I suspect it will  be one of the things they play with just to 'do something' with their newly acquired new toy.  The steady increase in expected profit we have seen is consistent enough for me to remain confident this is not likely to change enormously in the foreseeable future.

Also whilst the share evaluation based on profits and other fundamentals may (and should) be central to serious investors' decisions I suspect a higher proportion of BTC share investors than average (SD shareholders in particular) are not so meticulous.  I guess a significant number are and will continue to be SD players who buy when they realise they can own part of the 'house'.

I also would like to see more development of the games and more promotion to keep the market lead and make it more attractive to potential takeover.  However, I believe there was some legal stuff that needed to be sorted out as well as some technical stuff that was being looked at so with that done, once you and your like-minded investors have got out, providing Erik doesn't bring a whole load more shares onto the market my guess is we'll start seeing a slow but steady rise in share price again - especially if we see a few months of near-expected profit.

I was a latecomer to this party so paid a fair bit for my shares meaning I'm at a significant loss now but I'll thank you nevertheless for the opportunity to have brought my average purchase price down by buying some of yours

Oh, thanks TradeFortress. I've seen this ad, just forgot about it during this writeup.
But you're right, I guess I could've checked other places for S.DICE adds, or ask Eric in this thread...

Hi throwaway123!

Just a minor nitpick: There has being advertising for S.DICE on http://reddit.com/r/bitcoin: https://bitcointalksearch.org/topic/satoshidice-win-bitcoins-while-stress-testing-the-network-reddit-ad-156318

First of all, I like what Eric is doing, and I love MPOE. Last week I decided to cash out all my 250k shares at around 0.0040 - I guess I'm responsible in part for the recent drops. Below you can read my reasoning.

Let's start with the IPO. I bought 250k shares @ 0.0032. My reasoning for that was, that the 5-10x P/E is quite high for a small website, but on the other hand - it's a "stable" business, and I really hoped it would grow.

After a couple of months, what we can see on the charts is that S.DICE had a tremendous growth in dollars, while the profits - as measured by BTC - remained on similar levels.
Let me clarify what I mean by "profits" - obviously I mean *expected* house profits, sans the whales that came and went in Jan & Feb. If the wales come back, we'll have a reason to include them in calculating the profits, but as for now, at least I, wouldn't.

Aside from that, what I can see is that there is not much happening to the site. No new games, no new marketing - at least as far as I can tell from Eric's communication on the website and in this thread. As far as I remember, there are things happening on the backend - improvements etc, but marketing-wise, there is nothing.

I was taught that a part-time web business which is a milking cow, deserves 1-2x P/E valuation. In case of S.DICE there is a chance the service will grow jsut because it has the first mover advantage, and because of Eric's appearances on tv, but I'd say that this bumps up the valuation to 3x for me. Not 10x.

Finally, we all see what's happening to the price of BTC. It may be just a bubble, but if it isn't - there is a chance that we'll see a decrease in BTC profits. I'm surprised that it hasn't happened already - perhaps some miners bet a steady amount in BTC every month? Or S.DICE is used for some kind of btc-laundering? It would be quite spectacular to see the same amounts of BTC profits, but with BTC above $90...

And of course, there is a personal reason. S.DICE became a huge part of my investment portfolio due to the increase of BTC/USD price. I no longer felt comfortable keeping up such a high part of portfolio in one place. But if it was only for this reason, I'd leave some of my S.DICE shares. And if I was a panic seller, I'd have sold back in Jan/Feb, when S.DICE was at 0.008.

Now, back to the sale. After I decided I wanted to sell it all, the question was - how to sell it for the highest price possible. I was quite afraid that if I put a sale of 250k at a high price (like slightly below the lowest wall at the time - @0.0062), would cause a small panic, or at least, would make me wait for months before sale - and in the meantime someone else might come to the same conclusions.

I was afraid that putting it at 0.0050 (which was arround the lowest asks at the time), would cause a downwards trend with no chance for me to sell. I decided to go well below the lowest asks, at 0.0040. I lost 150BTC because of that, but I was still on plus relatively to the price I got on IPO.

It took like two-four hours to sell at this price.

I still considered keeping the remaining 100k shares, but after redoing the calculations over and over again (btw. I recommend Soulver & Google Docs for this ), I decided to sell them as well. Being a bit more relaxed, I decided to go for a higher price this time (not that much to lose), which was I think 0.0050, or even 0.0055. I sold 30-40k shares instantly, and the rest of the shares just hang there - that was the ~50-60k sale order some of you might have seen, the first wall.

During the coming 2-3 days some people began selling slightly below my wall, I moved the order to 0.0045, and noticed more people selling below the wall even still (the scenario I was afraid of when selling 150K the first time). But I got some more sales, and had just 30k left over. That's when I decided to dump it all at the market price, which was around 0.0031-0.0030, which you saw yesterday.
All in all, on average, I sold at ~0.0040, and earned 120BTC in dividends since IPO. I'm quite happy with the whole deal, although I obviously wish I've sold it all when it was 0.009 (but who would've known that the wales were just temporary - perhaps Eric?). I still have some of my BTCs on MPOE, waiting for one of the following:
- the S.DICE P/E to fall to 2-3x - either by an increase in profits, or by a decrease in share price
- Eric doing something which would increase the valuation to 10x in my eyes. That would probably mean consistently showing us that there is more done towards the marketing and development of the site
- seeing a premiere of a new game, and turning S.DICE into casino. I'm curious to see whether a new game would be classified as a new venture, or the same one. There is nothing in the IPO documents I can see that would forbid Eric from doing it as a separate venture. And if he did, my target P/E would fall down even further - to 1x-2x

Having said all that, I hope that I'm wrong, and I'll see selling S.DICE as a mistake The MPOE is a very nice platform, and I'll be looking forward to future IPOs. As a side note though - I think Miresca should lower the setup fees, or introduce monthly support payments / payment by transaction. I paid 20BTC = 200bucks. Right now people have to pay 30BTC=2700 bucks. Therefore all the people with less than $100k to invest in one of three ventures on MPOE, need to use a passthrough. On the other hand - perhaps that's what he wants - to deal just with "sophisticated" investors.
On the other hand small investors can bring a liquidity to the market. An illiquid market brings down the valuations as well.

I was wondering whether to publish this all. Some people will say that I try to encourage a panic sell. As a matter of fact, I'd enjoy the panic very much - I'd gladly buy back S.DICE at 0.0009 (around P/E around 2x). Alas, after this post some people may set walls slightly above it
I hope though that this will stimulate the discussion, and we'll all learn something from it.

Disclaimer: some of the parts may be a bit off - didn't double check all the numbers, and don't forget some of them.

Derp, of course. Thanks

Transaction fees.

Yeah, I'm wondering what the reasoning behind keeping the min. bet the same despite a 10 fold increase in the value of bitcoin is.

That's not how it works.  That's like a roulette player saying we're due for black because it's been red 5 times in a row.  Random events have no memory.

People often hear about the law of large numbers and misinterpret it as meaning that good months are likely to be followed by bad months.

Edit: I didn't notice there was another page of this thread in which pretty much all of the above had already been said.  Oops!

Agreed

It doesn't matter WHEN you start. In the long ran you'll get the result probability calculates. In you example it is more probable to have 50:50 outcome when you toss 20 coins than if you toss only 10 coins I woudn't wonder if S.DICE goes below the expected profit line for some time, even if it is above it right now. some big whale may join and win a lot of money, then vanish - just the oposite of the whale who lost a lot of coins in the past. Variance in first several months will not matter anymore after S.DICE will run for several years.

It is relevant for people who bought S.DICE shares (they spent BTC), how fast they'll get their invested BTC back.

I don't see how that is relevant.  If I want to gamble $50 USD on satoshi dice, I go in there with a different decimal of BTC, and bet a different decimal of BTC, BUT I am still able to bet my $50 USD at $5 per play.

You are still wrong. One does not expect the future outcome to trend back toward the expected value set several months ago, one expects the future outcome to follow the trend line starting at today.

As an example, lets say we are going to flip a coin 20 times. At this point we predict 10 heads, 10 tails. We then flip the coin ten times, and despite probability we end up with 10 heads. What you are saying is that you expect the next 10 coins to come up tails, putting us at the original expectation. What I am saying is that for the next 10 coins I expect 5 heads and 5 tails, so my new expectation is we will end up at 15 heads and 5 tails overall.

Of course statistically this is known as the Gambler's Fallacy.  Yes we could stay above expected profit forever since each win/loss is independent.  We could also stay below the expected profit for an infinite amount of time.

As a practical matter expecting a large amount of independent die roles to ultimately be closer to the expected probabilistic outcome rather than further is how all casinos generate money and long term why you can't beat the house.  In the long run profit will return to the expected value based on expected probabilities.

Given that and the relatively low volume, I think it's more likely that we'll draw closer to the expected profit rather than further.