Topic: Just-Dice.com : Invest in 1% House Edge Dice Game - page 125. (Read 435457 times)

I think we'll have to see what happens.  If it's a problem, we'll address it.

The two issues I see:

1) allowing large leverage will permit large investors to monopolise the bankroll in a way that they currently don't feel comfortable doing due to CP risk

2) increased volatility in max profit isn't a good thing for gamblers.  they will feel like we're reducing the max profit to stop them winning their losses back

Both of these can presumably be addressed by putting limits on the allowed leverage multiplier.

OK, so I'm announcing it.  At midnight UTC Friday I'll change max profit to 0.5%.  (half Kelly).

That's in 25 hours.  I'll have the site spam this news to the chat periodically too.

I made the point about the robbing. I'm glad you took it in the spirit in which it was intended. I was worried it would come off... I dunno, mean or tasteless.

That's a great point that they're two separate issues and "variable risk" is more urgent. +1

That was a separate issue entirely.  Will proposed a situation where 'coward' investors take on zero risk and get 60% of the rewards at the expense of the house.

That's not something I'm considering implementing at all.  Risks must be proportional to expected rewards or it's not fair, and the coward's risk is nil.

LD pays investors in this fashion, but that's different.  LD investors have no claim to ever get their investment back.  They exchanged BTC for 'shares' in a one-way deal.  They can try to sell their shares to a bigger fool, but don't have the option of selling them back to the house.  So the house is free to use the coins to bankroll the site.  We wouldn't be, since the coward has the option to divest and withdraw at any point - so we'd better just keep his coins in cold storage.  In fact there's no point even asking him for a deposit.  We could tell him to keep it, and just send him 60% of 1% of turnover on a weekly basis...

0.5% is already much better than 0.25%, a better balance variance/expected returns IMO

For this type of change I would have an announcement on the front page for at least 12 hours

And Doog, thanks for listening to our concerns, I'm sure all this noise will help to improve this amazing product you created.

A point made earlier about fractional deposits meaning there is less in the cold wallet, and so less incentive for people to rob me is a good one.

I don't gain anything by holding people's full bankrolls; it just exposes both the investor and myself to increased risk of robbery.

But this 'fractional' idea is something that can wait anyway until 'variable risk' is live.  They're two separate things.

I'm still too far behind, trying to catch up on this thread, but that bit's wrong.

The site doesn't track each investor's invested amount.  It stores their percentage (66.7=A, 33.3=B).7

It doesn't need to change that at all until the next invest/divest event, saving many calculations.

There are many bets per second; the site doesn't calculate new investor balances until the next update is sent out.  It's only sent to logged-in investors, and it's only sent once per second.  So most bets don't trigger the calculation of any investor balances, and even the ones that do only trigger it for the investors who are currently connected to the site.

Do you think there will be a potential issue with investors using all their margin to gain a larger percentage of the smaller bets then divesting or reducing margin (manually or with a bot) when a whale comes along? I feel that if you do implement margin it will greatly inflate the bankroll as investors will try to get a larger percentage of the smaller (less volatile) bets.

Perhaps this is a non issue since it is similar to someone doing the same without margin. I suppose it could depend on how much margin you allow. As you said, it will probably cause large swings in the max profit when a whale starts betting.

It's purely because of implementation issues.


I think you're missing the point.  Currently, if you have 1% of the bankroll before a bet, you still have 1% of the bankroll after the bet.  Whatever happens.  I don't have to do anything to the investor list ever except on invest/divest.  Your share of the bankroll is fixed.

If different investors have different risks, then every bet changes their percentage share of the bankroll, and also their percentage share of the max profit.  I have to adjust every investor's share after every bet.  That's ~1000 investors times ~50 bets per second.  50k multiplications per second is probably not prohibitive, but it's ugly.  Having all investors in one of N tiers means I only have to do 50N multiplications per second instead of 50k.  N is much smaller than 1000.


The fractional reserve is a completely separate issue.  I'll not implement that yet.  It's just a way for investors to reduce the CP risk.

I think if you do it that way, it is exactly the same as if "offsite" reserves weren't implemented at all, and investor B just invested 10 BTC at 10% risk.  After losing his first bet he would have 9 BTC left, risk 10% of it, ie. 0.9 BTC, as in your working above.  The point of the "offsite" reserve is that it doesn't shrink with losses.  He deposited 10 BTC, claims to have 90 BTC more at home, and we take him on his word.


And that is how it is meant to work.  "offsite" investment is a way for player B to invest his whole 100 BTC without having to trust us with more than 10 BTC of it at a time.  It should be exactly equivalent to investor A investing the whole 100 BTC at once.


We don't care whether he really has the other 90 BTC or not.  If he loses the first 10 BTC without topping it up, he gets divested.

The only downside I can see to this is that it can cause sudden changes in the available max profit.  To mitigate that, we limit the amount of leverage investors are allowed access to.

(1) "News" tab on just-dice.com, which should give some indication of the number of unread news items.
(2) investor thread on bitcointalk.org -- perhaps a moderated announcements thread

A community volunteer could even handle #2.

Maybe put a notice on the front page of JD website?

While I work on the change, I am happy to put the max profit back up to 0.5%.  Half Kelly seems like a reasonable compromise.

How do I do this in a way that doesn't piss anyone off?  Changes without notice are "out of order".  Where do I announce it?  I don't have any way of contacting most of the investors.

Do I just post here "max profit will be adjusted to 0.5% of bankroll at (midnight tonight, UTC)" and leave it at that?  How much notice does it need?  That's only 2 hours away, and so probably not long enough.

What about "midnight pacific"?  That's 9 hours away.

Thoughts?  How much notice do people need?  And where's a good place to put such annoucements?

Okay, but you yourself explained that allowing people to choose their risk would just make the "coward" investors parasitic to the "hero" investors. I agreed with that analysis.

I am working on a change to allow investors to decide for themselves how much to risk.

Optimal Kelly isn't "gone", it's just resting.

I was making reference to this statement:

in this case the investors are gambling and investors dont want to gamble IMHO

Using your definition (which I agree with)--and since no one has talked about taking the house edge to zero or less than zero--the statement is false on its face. QED. I was simply assuming they meant "investors don't want risk" and I was saying, "bullshit, everything about this is risky and they (we) love it! Plus they straight up gamble!"

Depends on your definition of gambling. To me everything with positive EV is investing, no matter how volatile. I don't consider poker gambling when you're better than your opponents for instance. I'm far from alone in using this definition.

1) "Investors don't want to gamble" I beg to differ. Like someone said, this is a startup casino using startup money which is highly volatile. That's gambling. Just with a 1% edge. So I reject that premise. Plus it's real simple-- most investors on the site gamble some too.

2) We use the Kelly Criterion to determine the max profit, which is 1% of your investment (or .25% now). But that's the max. In reality, we're almost never risking full kelly, except on the occasional times when someone makes a bet that pays full max profit (usually a whale, but sometimes somebody going for a longshot, betting little for a big payoff). So when someone bets 0.008 when max profit is 80BTC, that wager is actually 0.0001x Kelly. Hardly relevant. And individual satoshi, even less. Look at the awesome Kelly chart someone uploaded a couple pages ago. Look how little volatility 0.0001x Kelly contributes. Thus, no need for a minimum, maximum is already taken care of rationally. Done.

EDIT: Keep in mind that casinos have minimums for several other reasons that are irrelevant here: segregate high-rollers from us poor folk, there are fixed costs to having dealers, it's physically difficult and risky to have the dealer have to handle wildly different denominations on one table (imagine having stacks or 1 cent chips next to a stack of $10,000 or $500,000 chips. That's a recipe for disaster!). Again, none of this is relevant at JD!

min & max for a casino with any edge is a must and a healthy way for investors and OP to earn money in the long run.

Where else in the world can you bet anywhere between 0 and 8,500,000,000 units
in this case the investors are gambling and investors dont want to gamble IMHO

I said:


He has said himself he only came back to promote his own site, in his reddit AMA.  We have no reason to believe he wouldn't stop once he has reached his target, whether that's reducing the JD bankroll from 50k to 25k, or increasing his winnings from 4k to 25k.  He's not stupid, and I think it's quite possible he would just stop at a good profit and never play again.

However, I am working on a change that will allow investors to select their own risk exposure.  If you want to continue risking 1% of your bankroll to him, you'll be able to.