Topic: Just-Dice.com : Invest in 1% House Edge Dice Game - page 127. (Read 435353 times)

This is a great graph. Thanks so much for sharing.

I think your deductions are incorrect though since you exclude counterparty risk.

Once you do that you'll see that 1% max bet is the optimal balance.

Those that want less volatility risk are better off investing less than reducing Kelly Size. Both measures reduce volatility risk and reduce returns but reducing Kelly Size keeps counterparty risk the same whereas just investing less also reduces counterparty risk.

Nakowa was/is indeed one of the best promos for the site. I was there while he was playing and the max profit was suddenly reduced to STOP him. That's unfair and lame, it was a rushed decision driven by emotions - and it was a very BAD decision. You want to cuddle and support Nakowa, he is the best customer you can have.

why are people so obsessed with tiers? why can't it be continuous?

https://bitcointalksearch.org/topic/hi-guys-i-nakowa-was-beaten-lost-5k-btc-in-two-days-still-up-301412

I am getting more and more convinced that nakowa is one of the main investors of just-dice and he is just advertising the website

That can only be true if you think the chances of Dooglus running with the money, or being hacked, or losing all backups is exactly zero. Otherwise full-Kelly is and always will be optimal.

Oda, I see you are getting tired with this too. I think I got it finally, bare with me if you will.

Problem: volatility risk too high

Solution 1: Reduce Kelly Size
- Reduces volatility risk = yes
- Reduces returns = yes
- Reduces counterparty risk = no

Solution 2: Reduce invested amount
- Reduces volatility risk = yes
- Reduces returns = yes
- Reduces counterparty risk = yes

Totally BS.
How can you argue by imagining what other people thinks? You have no idea why they did not divest, and I can see plenty of reasons. It does not mean at all that they were OK with the risk.



3 months: (expected profit) = 20 k btc.
Profit = - 780 btc.


WTF? Only doog got some cash from JD

Ha! I did the same thing!!  I figured now that there is 4X less worst-case variance, I am willing to risk 4X as much (well, actually 3X as much, b/c I also accounted for the additional counter-party risk). So, I am now earning a larger % of the pie than the investors avoiding the variance  

So, if everyone does this, I guess we'll all end up in a similar position as before, but with WAY more exposure to counter-party and legal risk.

I will keep supporting dooglus, and in fact I increased my investment x4 just after the max profit was reduced to 0,25%.

This is how you do a sliding scale:

1.) Max return is whatever the highest investor(s) is willing to lose. Doesn't matter if it's percentage or a literal number.

2.) If a gambler loses the bet, divide the sum by the number of "tiers" that intersect it.

Example:
100 btc max return, and 100 btc lost by the gambler.

1% tier = 50btc.

.5% tier = 25btc.

.25% tier = 25btc.

Note: Tiers do not necessarily need to be percentages.
...

I think your deductions are incorrect though since you exclude counterparty risk.

Once you do that you'll see that 1% max bet is the optimal balance.

Those that want less volatility are better off investing less than reducing Kelly Size. Because reducing Kelly Size reduces returns so you need to increase your investment to have the same returns again. Reducing one risk, and increasing another means no reduction of your overall risk, whereas just investing less but keeping the optimal balance would actually have reduced your risk.

Am I explaining this correctly?

I hope you also realize that the level of investment during Nakowa's "raid" was still 30k, which means that max. 1/3 of the investor divested, which is quite a big sum (and I guess that made doog very nervous), but the majority of investors (2/3) kept the money on the line, meaning they were OK with the risk.

I see. The circlejerk continues. Let me try again:

(1) Our favorite whale is back. Please stop repeating the argument that somehow Dooglus chased him away. That obviously didn't happen.

(2) Kelly value is not the "only rational value" to base maxbet on. It's dead simple: it's provably the correct value for optimal growth. That's all. If you don't see the difference between that and "the only rational choice", you're hopeless.

(3) You're still free to *prefer* that maxbet = Kelly value. But it's a preference, nothing more, nothing less. Right now, investors are obviously not of the same opinion about this. But you need to stop calling those who have a different preference from your own "irrational". It's disingenious, and rather insulting.

(4) The long-term solution seems to be clear: Dooglus will (probably) implement a market determined maxbet, i.e. investors choose their own exposure. The details are maybe still open (what's then percent range investors can chose? will there be a forced delay to limit wild maxbet swings?), but in principle, the idea is fantastic and should satisfy all.

(5) In the meantime, if you prefer maxbet to go up again, go ahead, lobby for it. But keep your arguments somewhat respectful (see points 2 and 3 above).

... and now something that I really feel needs to be said in all of this:

(6) Dooglus, you're doing a fantastic job. Most of us investors know this, even if we don't always show it. Maybe some of us didn't completely agree with your sudden maxbet reduction yesterday, but seriously, j-d is the first gambling site that I feel comfortable with both as an (occasional) gambler and as an investor. Keep that in mind please, whenever you start doubting your project.

Bullshit. It's pointless to argue further on this, I'm out of the discussion. Seriously rampion, you lost a lot of my respect today (not that it really matters).

RationalSpeculator: 1% of what?  The amount physically deposited at JD, or the amount an investor is willing to risk [which may be larger than what they physically deposited with JD in an effort to further reduce counter-party risk]?

100% agree with watchwoord and RationalSpeculator.


I strongly disagree on this. As soon as dooglus changed the max profit to 1%, a violent riot started on JD's chat. Only mechs supported that decision.

After that somebody made a poll, and 2/3 of people said that going to 0.25% max profit was a mistake.

Just read these forums, the vast majority of investors is annoyed by the sudden change - let's remember that we all signed up for a site that had 1% edge and 1% max profit.

That said, we all know dooglus NEEDS support, and we all like him. You'll see how mechs took most of the heat, basically because most people feels bad attacking dooglus, I guess the reason is that he demonstrated he is extremely capable, smart and trustworthy.  

So, let me ask you: what investors do prefer fractional kelly instead of optimal kelly? Those who voted in the poll prefer optimal kelly. Those writing in here (except a few exceptions) prefer optimal kelly.

(3) You're still free to *prefer* that maxbet = Kelly value. But it's a preference, nothing more, nothing less. Right now, investors are obviously not of the same opinion about this. But you need to stop calling those who have a different preference from your own "irrational". It's disingenious, and rather insulting.