Topic: Just-Dice.com : Invest in 1% House Edge Dice Game - page 199. (Read 435362 times)

Yeah there's some issues with implementation of it.  And some potential interesting things investors can do - such as when a whale's betting big run a martingale against them by modifying their local coins balance (if you remember I mentioned this ages back).  Also a large investor can try to freeze nearly everyone else out when there's no whales around by inserting a large local value so that max-bet rises to where anyone operating at 10% with 10% of coins deposited can no longer cover a single max-bet so is frozen out of taking the low-level action.  As soon as a few start doing that everyone who wants any action when whales aren't around ends up having to deposit all coins anyway.

Other issue with it it transparency.  If someone's balance is near the max-bet then they'd be in and out of investing a lot if there was a whale betting.  It would be hard for them to verify that their ending balance was actually fair.  The lack of ability to easily see that your balance was what it should be in those circumstances is possibly the largest argument against it from an investor's perspective.

Well then forget about the local coins completely, they are totally irrelevant.

What you are trying to do is simply a more computationally efficient way to get arbitrarily increased risk exposure, right?

A person has a deposit amount and a coin multiplier amount. Right now the multiplier is 1. You track real coins on deposit, and multiplied coins. If a loss on an account holder's multiplied coins exceeds the deposit balance, then the real balance is wiped out. The max bet is 1% of the total number of multiplied coins on the site.

It's clever, but I suspect implementing it will be less efficient than you think.  You need to track two balances per account.  You need to test for the edge cases for when the loss exposure on a bet would potentially exceed the remaining reserve of some account. What do you do then?  Force liquidate or lock account when reserves are less than the potential max loss from a single bet?

Also, both the real coins and the multiplied coins will still be changing after each bet right?  Or I suppose you have the total number of multiplied coins fixed and the multiplier amount be variable after each bet.

They could, but they would be increasing their risk of ruin.  There's a non-zero chance that bankroll can lose more than 80% of its value.  It's just a low chance, and it didn't happen yet in the simulation.  That doesn't mean it can't happen.

Oh, yes.  That's maybe the answer to how to allow people to risk only 0.1% of their investment without having to micro-manage things.  Except you don't mean "edge", I'm sure.

Change the risk level to 0.1%, but default to 10x leverage (a).  Is that equivalent to 1% risk with 1x (ie. no) leverage (b)?

In (b), investor has 100 BTC, risks 1% per roll.  After losing 1 max bet, investor has 99 BTC and risks 0.99 BTC on next roll.

In (a), investor has 100 BTC, says they have another 900 locally, risks 0.1% of the (100+900) total.  After losing 1 max bet, investor has 99 BTC on site and claims to have 900 "locally".  New (invested+local) = 99+900 = 999, so risks 0.999 on next roll.

Hmm.  They're different.  The amount lost is the same in both cases, but the increased leverage in (a) means that the amount risked goes down less per loss.  It seems there's no longer a way for the guy who wants to risk 1% of his investment per roll to carry on doing so as he was before.  And that's no good.

This thing you suggest is totally absurd, that you would let people take a gamble(with 100% of there investment on the site at risk on each bet) for it to go there way and if it does they will profit up to 100 times more then the a "real investor" that only gets 1% of the site's profit if it goes the right way.

It's more or less setup to screw people that want a resonable risk/reward as some will claim to have 100 times more than they have then and will take 100 times more of the profit, than the investors that dont lie will only get 1/100 of what they should have gotten, or they can expect a return in the region of 0,02%-0,05% interest if that thing you suggest will become popular.
Also you will get some very unhappy investors that will take the gamble and risk way to high amount of there bankroll and end up unlucky enouth to go broke on the investors side.

Also i trust that you run a legit business here dooglus but the fact that you even suggests such an alternative looks very suspicious as it could make manipulations 100 times more profitable for you, how easy woulden't it be for you to pick a nice entry and exit point for an investment and use some other account to make a huge fake swing in the site's profit, and take almost 100% of the profit when the site goes up and then divest and take 0% of the site's loss. No dooglus this ide is totally wrong way to go i would say.

I don't verify it, and I don't care.  They're risking 1% of what they deposit plus what they claim to have locally.  If they don't actually have the amount they claim, then they're running a large risk of ruin.  That's OK with me, so long as they realise that's what they're doing.  The site isn't at risk - we only let them risk what they have on deposit.  All this does is allows them to keep most of their coins safe, rather than sitting in the cold wallet of some guy they don't know very well on the Internet (hey, that's me!).

They risk 1% of (what they deposit and invest + what they say they have locally).

That has to be less than their actual deposit, or they get liquidated.

On first impression this looks interesting. Is it correct to state that since investors can lose maximum 80% of their investment, as the simulation showed, they could immediately leverage up by say 15% without risking to be 'pushed out of their position'? So in your example an investor could immediately add 15% more coins to the 'local' storage without actually raising their risk (and by doing so raising the maximum bet of the house also by 15%)?

You don't need to verify they have them as the only coins of theirs that will ever back anything are the ones dooglus DOES have control of.

Only small down-side to it is that max-bet is likely to plummet fast if a whale starts winning big - as more and more people's cash on deposit runs out (whether they have more or not is irrelevant if they aren't around to refill).  But if it starts off higher (which it almost certainly would) then it's not a real problem.

So someone with 100 BTC could do any of:

Deposit and invest 100 and get 1% risk exposure on their 100 BTC.
Deposit and invest 10 BTC and get 0.1% risk exposure on their 100 BTC.
Deposit and invest 100 BTC plus claim they have another 900 BTC in reserve and get 10% risk exposure on their 100 BTC.

The second one is the one people wanting lower risk seem to miss - that they can get behaviour pretty similar to 0.1% risk already by withdrawing 90% of their coins (actual behaviour varies from true 0.1% risk exposure increasingly as the balance moves further from initial deposit).  And the differences in behaviour actually act in a manner more consistent with the objectives of those wanting low risk (e.g. losses from even a mega-lucky whale capped at 10% of BR).

This sort of system is far more efficient use of capital - at the expense of investors having to think for a few seconds about what they're doing.

I'm a great fan of Litecoin & it's potential, if Just-Dice decided to add it then I'd chat to dooglus about backing the house with a 6 figure pot (of ltc) from day one.

I don't understand how you can verify they actually have the local balance they claim to have?  Also, if you do this, maybe you should make the default edge lower and people can up-leverage themselves to 1% or more with their local coins.

so is their percentage of the bankroll calculated from what portion you controld, or from the amount they claim to have set aside for JD?

I think you're missing the point.  I don't care if they really have the coins they claim to have or not.  I let them risk 1% of their total claimed amount, until the coins I have control of from them are less than 1% of the total they claim.  Then I force-divest them.

It could be that they have in fact invested all their coins, and the other 99% in the "local" storage are a lie.  That just means that they're risking 100% of their coins per roll, and will go bust when the first max bet wins.

I don't think this passes any extra risk onto other investors.  It is somewhat like trading on margin, but with the important difference that there's no risk of slippage when I have to "liquidate" their position.  I just remove them from the bankroll.

The effect I'm looking for is a way that people can risk more than 1% of what they've sent me without making the calculations too complex.  I think this "fractional reserve" idea does it.  Please don't just react to the fractional reserve concept at a gut level.  I don't need to be holding all the coins you claim to be risking 1% of (and I don't even care whether you have them either), so long as I always make sure I have access to all the coins you're actually risking per roll.

Please, no margin / fractional reserve investing.  That just shifts more unnecessary risk to those that aren't leveraged.

I think this extra investing system is going to complicate matters even more. If people want less risk they can simply invest less.

If people don't want to risk having you hold the entire investment, they really should not be investing with you at all.

Also this new system means the investors that trust you the most will be left holding the bag if a whale eats the bankroll and the users with large local investments will just leave.

Then you have to start verifying many other address, also what's to stop the user using their offline balance as collateral for another venture, such as a insured loan?

I think in a few years banks will allow loans insured against bitcoin holdings, and the banks will always have first take on the money, not Just-Dice.

isn't that just fractional reserve investing?

I've only just woken up and not had coffee yet, but could this be the answer for people wanting to invest more but put off by the CP risk?

Every user has not just "balance" (for playing with) and "invested" (coins actively in the bankroll) but also a "local" balance, which is coins the user holds themselves, but consider part of the bankroll.  On every roll, the site risks 1% of ("invested" plus "local") for the user.  The user's percentage of the bankroll stays constant, since everyone is risking 1%, and it works fine until "invested" shrinks to less than 1% of "invested" + "local" (since the site then doesn't have access to the 1% they're risking).

This allows players to risk 1% of their whole holdings without having to send their entire holdings to me.  They only need to send 1% plus however much extra they want as a buffer.

It's a shame this doesn't appear to address the issue of people who want to risk less than 1% of their investment, because otherwise it looks like a good solution to me.

Example:

Say there's 9k invested.  New investor has 1k BTC but doesn't want to have to trust me with it all.  He deposits 100 BTC and says "there's 900 BTC more where that came from that I'd like you to consider the whole 1k invested, but I'll hold it for now".

I update the investors list to say that there's now 10k invested, that the new user has 10% of the bankroll, and that 900 BTC of his is "local" (to him - need a better term for this).  Then a whale loses 2000 BTC.  Total bankroll is 12k.  New user's 10% share is 1200 BTC.  "local" is still 900 BTC, and so the user is free to withdraw up to 300 BTC if he likes.

He's risked 10% of his 100 deposit on every roll without the site having to do lots of math on each roll, just by storing one extra value per user: "local", representing the amount they claim to have invested but stored locally.

This is an ongoing unsubstantiated rumor, hence I'd dismiss it.
AND even if it wasn't a rumor, mtgox is crumbling.

This is how I responded also when the question came up for Satoshi Dice. However I'm starting to doubt more and more my opinion that Litecoin will fail.

Sure Litecoin is not superior to bitcoin but inertia, vested interests and decentralization may well make it very hard for bitcoin to improve it's features. It could well be that cryptocurrencies will become a rapid cycle of the rise and fall of different cryptocurrencies. Comparable to the gambling websites on the bitcoin scene. What I couldn't imagine, Satoshi Dice being destroyed by a competitor, happened within a few months.    (Satoshi Dice's turnover in USD collapsed by half since Just-Dice launched)

Litecoin may implement some new features tomorrow that do make it technically superior. Combined with mtgox adoption and the already strong foundation of early adopters and evangelists it might take over bitcoin in only a few months time. Chances are very low but it's possible.

It might be that if just-dice does not embrace Litecoin in it's early stages that it might go down together with bitcoin sooner as we all expect.  

Just thinking out loud, honestly I have no clue what the best course of action is. Just getting little nervous of this whole Litecoin thing.