Topic: Just-Dice.com : Invest in 1% House Edge Dice Game - page 241. (Read 435353 times)

It's hard to predict expected return because investment pool may grow. Suppose you invest in 15k pool and lose in a first week. Latter with bigger investment pool,  your return will be lover. 

Please include specific crocodile mitigation solutions with your answer

dooglus, sorry for asking, but do you have a dead man switch plan in case you got eaten by crocodile or something.

Agreed that when btc goes up, amount of btc bet goes down, and thus returns also. But indeed the value of your investment remains intact: you profit in full from the rising value of your btc invested.

That means that this investment becomes attractive for the bitcoins that one intended to never invest, and just keep in cold storage, as chances are too low that btc invested in enterprises will become more btc.

Not so with just-dice...



Thanks for doing the calculation. 5% looks good. Will be interesting to see if this remains constant or goes up or down over time.



I didn't experience you as arguing about probability theory, but discussing in a friendly, intellectually curious manner, as were all the interactions I have seen from you. Your tracking and daily publishing of the sdice stats for free with others show me that you care and share. And giving back 2k btc is the strongest proof one can have that you are trustworthy. I don't mean to say 'you build your rep', I mean you gained my trust. 

Are you sure about that?  I guess the value won't go down, but the returns will do.  If BTC goes up massively then we can expect turnover to drop.  You can always cash out though and get your original coins back (plus or minus whatever you won or lost).


I just ran some numbers now that I've got the bets in a database I can query more easily:


As you can see, the wagered-per-day is pretty up and down.  Let's pessimistically say it's averaging 2.5k per day, with a 15k investment pool.  That's an expected return of 0.17% per day, or 5% per month?


Thanks, but I don't understand that part.  I didn't really do anything other than argue about probability theory on here for a year, and accidentally find myself with almost 2k BTC on my hands when WBX went tits up.  I didn't give it back to the WBX clients to "build my rep"; I gave it back because it wasn't mine... 

Very nice indeed Dooglus. Although it's true that an investor will not profit from the enterprise tenfolding in size, it's also true that the investor won't lose anything if the enterprise shrinks.

It's very interesting that your investment won't lose btc value if btc price goes parabolic, in contrast to any other enterprise you invest in: mining, sdice, etc, all of whom will shrink dramatically in btc value if the profits do not increase as quickly as the btc value.

An investment in just-dice cannot be categorized as a 'stock' investment, one needs to categorize it as a 'btc' investment (+ added risk & reward).

The expected return of 6% per month means almost a doubling of your btc on a yearly basis. So you do get rewarded decently for taking the risk of trusting them to you.

You also did a superb job in building your reputation. Great job indeed

 

If the level of investment stays around 14k BTC and the rate of wagering stays around 21k BTC/week then the expected profit is 1.5% per week, yes, since every invested coin is "matched" by 1.5 BTC of wagers.

The current total wagered is 38k BTC and so the expected profits are 380 BTC.  Actual profits are 230 BTC.  That's variance.  Yesterday the profit was up around 350 BTC for a while after Vinka bet and lost 100 BTC in a single bet.  He then proceeded to bet 100 BTC another 12 or 13 times, winning 10 BTC each time, and taking the site profits back down around 250 BTC.

I wouldn't be surprised to see months where the house makes a loss, and other months where the house does much better than expected.  Even satoshidice has losing months, and they have a bigger house edge and bigger volume.

Whichever way it goes, someone's not going to be happy.  Either the players will be saying "the game is rigged", or the investors will be wondering why the profits aren't as high as expected.

tl;dr variance

Thanks for your calculation thy.

Is this calculation correct Dooglus? Can an investor expect to make around 6% per month with just-dice (expected profit)?  (80,000 btc bet per month, expected profit 800 btc, invested capital 13,000 btc, 800/13000=6%)

If yes, howcome the amount earned by the site is only 2% of the current invested capital?  

A few days ago I received and replied to a PM and thought I should post my reply here too so at least I can say "I said that might happen" if the nightmare scenario happens:


Max profit is currently rounded to 2 decimal places.  That's not an issue until 99% of the bank has already been lost, but then becomes an issue.  We don't have infinite divisibility of bitcoins either.  Player wins are rounded down to nearest satoshi.

But given your (invalid!) assumptions, you're right.  You can't lose. 

Even given your assumptions, you can theoretically lose 99% of your investment, as follows:

We offer a 98% chance of winning 1.020408% of your bet.  Bet 10k BTC to win 102.0408 BTC.

Someone with 10k BTC they don't mind losing can take 102 BTC out of the bank with only a 1-in-50 chance of losing their 10k.  In testing I've seen that 98% bet win 100 times in a row, and it has quite a damaging effect on the bankroll!

Now in reality, who has 10k that they're willing to risk on a negative expectation bet, and is prepared to do it 100 times in a row, knowing it's very likely they'll lose more than they win?  I wager "nobody".  And if they do, will they know when to stop?  I expect they would continue until they lost at least once.

Losing 99% of your investment isn't much different than losing 100% of it, in terms of how that feels.  So theoretical questions of infinitely divisible bitcoins and granularity of max-profit calculation aren't really all that interesting.

In the end, it's a gamble, and the odds are in the investors' favour.

I hope that answers your question.  And doesn't scare you too much!

Do you mind if I post this in the thread?  I think all investors should get a chance to be scared by it.  So they consider the risks, and don't say "I didn't realise that could happen!"

Stating flat out that it wasn't mine, yes.

Done.  Good point.

>Implying it wasn't yours

Hey Dooglus,

Any chance of changing the login form so the google auth field is autocomplete="off" - just that I know it's different each time and so no point my browser remembering this.

Cheers

Will

Site up now

Down here to

I'm not able to get to it either currently.

Is the site currently down?

 

The bulk of the BTC was taken out towards the bottom, not the peak.  I don't know why; perhaps it was thought that selling BTC before the coming crash to buy back later was a better use of the coins than keeping them invested.

Anyway, it just means more profits for the rest of us...

Less invested coins means each coin gets more expected return - until the volume takes a hit due to the smaller max wins.