Topic: House edges compound - Why people always seem to lose at dice - page 2. (Read 1474 times)
Sounds like a nice calculation , in simpler terms I used to think of it as "Since I am wagering more by betting smaller amounts to get to that profit , I would be losing more to the house edge." . I guess most of the gamblers don't think much of the maths behind it and only think of strats which can work against the house , and most of these strats start with smaller base bets so its very rare to see people betting their entire bankroll on a single bet.
House edges have a much greater impact than you can imagine.
Assume you start with 1 BTC, with the final aim of 1024 BTC.
With a house edge of 1%, you have a 0.0966% chance if you try to do a direct 1024x bet.
On the other hand, if you try doubling your money 10 times to reach there, you get a (0.495)^10 = 0.0883% chance of reaching 1024 BTC.
While in the first case, the expected value is 0.99 BTC, in the second case though, it is around 0.9 BTC. Effectively, in the second case, the house edge is actually 10%, even though your start amount and target amount are the same.
In general, the average amount you expect to win (expected value) after a number of bets will be original amount * (1 - house edge)^number of bets
What am I getting at with this?
If you're gambling with the aim of earning money, set a fixed threshold and aim to get there in a single bet of all your funds.
You always lose 1% or whatever house edge of all the money in total that you bet. Try to minimise the total amount of money gambled.
If you have no strategy, putting it all on a low chance roll may be better than a lot of other poorly conceived strategies
Admittedly betting it all on one go, with a low chance to win is not fun...
Assume you start with 1 BTC, with the final aim of 1024 BTC.
With a house edge of 1%, you have a 0.0966% chance if you try to do a direct 1024x bet.
On the other hand, if you try doubling your money 10 times to reach there, you get a (0.495)^10 = 0.0883% chance of reaching 1024 BTC.
While in the first case, the expected value is 0.99 BTC, in the second case though, it is around 0.9 BTC. Effectively, in the second case, the house edge is actually 10%, even though your start amount and target amount are the same.
In general, the average amount you expect to win (expected value) after a number of bets will be original amount * (1 - house edge)^number of bets
What am I getting at with this?
You always lose 1% or whatever house edge of all the money in total that you bet. Try to minimise the total amount of money gambled.
If you have no strategy, putting it all on a low chance roll may be better than a lot of other poorly conceived strategies
Admittedly betting it all on one go, with a low chance to win is not fun...
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