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Topic: Question about moneypot - page 2. (Read 2217 times)

full member
Activity: 174
Merit: 100
April 18, 2016, 07:11:35 AM
#24
Of course, this would mean that the longer it takes to reach that, the more exponentially larger the bet the theoretical whale would have to bet.  All bets received by the investor would still be +EV (positive expected value bets) and the investor has access to pull their investment at any given time.  


This makes sense to me, but that's because I've been researching the kelly for a few days now. In my opinion, the average investor would not understand that although they initially seem to be making money, when the point to stop would be. I doubt the average investor would be able to "pull their investment" at the right time. And, if the bankroll reaches zero, I can promise you that regardless of what explaining you do, people will call you a scam (also MP would lose its money).

Also, could you work out a new commissions system? Maybe a hard percentage on all winnings?

Thirdly, would you mind answering the question I posted several days ago, about how much of the bankroll MP controls?

Lastly, have you thought about a referral system for investors? Or will that just decrease the cut the each of us gets?
full member
Activity: 174
Merit: 100
April 18, 2016, 06:37:43 AM
#23
So what is the new maximum bet going to be?
full member
Activity: 174
Merit: 100
April 18, 2016, 01:06:11 AM
#22
So by investing in moneypot at a max bet of 3x, I run the risk of...

Also, why is it 3x? Is that just rounded from 3.333333333? Or is it 3?
full member
Activity: 174
Merit: 100
April 17, 2016, 10:27:41 PM
#21
Just a few questions from the perspective of an interested current investor:

1) Can Ryan explain the difference between EV (which I take to be expected value) and expected bankroll growth?

2) Does MoneyPot charge commissions if the gambler wins?

3)
In the short run, the investment can reach high volatility that can either win or lose the investor a high amount of Bitcoin.  Such as the previously mentioned example, in the short term, this could mean that a quick loss of 100 Bitcoin at a 1% House edge would result in as high as a 99.3 profit to bankroll.  The commission would be 70% of the house edge on the wagered amount, in this rare case, a 7% commission.  It does not mean that commission is 70% and that Moneypot would take 70% of 100 Bitcoin.  

Where is the 7% coming from?

4) Can you make a definitions page clearly outlining what each piece of jargon means? In fact, that would be very beneficial even here, as your use of the word commission changes from time to time here as well...

5) The kelly is not actually not that confusing. I think most investors would understand if you write that "based on a mathematical formula known as the kelly criterion, the most that an investor could lose on a bet with 1% house edge is 1%, the most that an investor could lose on a bet with 2% house edge is 2%, ect"
legendary
Activity: 1463
Merit: 1886
April 17, 2016, 08:29:59 PM
#20
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We apologize if we misunderstood that you were accusing us of being -EV from the statement of putting "investors into negative expected growth territory".  From your admitted statement of our investment propositions being +EV, in its very nature, would mean that the expected value would continue to be positive going forward in the long run, so we're a bit unclear by what you really mean.  Perhaps this was just an honest mistake.

Please read the kelly, and learn the difference between expected growth and expected value.  You can (and probably are) +EV but -bankroll growth. This should be stuff you did 5 months ago.

This is the second time you've called me out on my "mistakes" which were correct. I don't mean to be so hostile, but seriously..


Quote
To be completely fair, it is hard to call us negligent when the code remains the same as you have written it.  We made one change which was to the commission structure to 20% of the house edge being wagered.

lol, the "one change" can break everything if done incorrectly. You can't throw in a random constant in on one line, and expect the previous safe-guards to not break very badly.


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We understand your concern about user fund security and thus hold no hard feelings over what we believe to be a misunderstanding.  We take user fund security very seriously as well.  

No hard feelings either. Just to be clear, I think the extra commission is entirely reasonable and important for everyone (apps, gamblers, investors) that there's a sustainable business model in place (which you seem to have). It's better for investors to have 30% of a large-number, than 10% of a small number. I get it.

You just need to communicate it clearly and make sure you're not over-exposing investors  (or at least, tell them they're no longer at a 1x kelly and at a Y).  
legendary
Activity: 1330
Merit: 1000
April 17, 2016, 04:00:28 PM
#20
Yes, it is 20% of the house edge.  Not 0.2%. My mistake. I meant to say to calculate it, you would take House Edge * 0.2% * wager to see the house commission.

The documentation on MP needs to be fixed too then. It's not a particularly small mistake, considering it's the difference between investors paying amortized 50.02% commissions vs 70%. Also, would you be able to answer my earlier question about the max bet, which is probably the most important. Grin

Yes, I'll fix up the FAQ.   Although it doesn't read as 0.2% of the house edge there.  It is referenced as 0.2% of the wagered amount which works out if the house edge is 1% but is slightly off if it isn't.  Nonetheless, I'll go ahead and change that up.  Thank you for pointing that out.

It's not a fixed commission of 50-70%.  If using the above example, the investors would be effectively paying a 0.7% commission on their profit. The commission is calculated on wagered volume.

The max bet is still set to the previous settings of the original Moneypot settings.  If the house edge is 1%, you can only win a maximum of 1% of the bankroll.  If the house edge is 5%, you can win up to 5% of the house bankroll.  

However, we're currently in the process of re-writing it to have a hard cap max bet in the very near future.  
  
legendary
Activity: 1463
Merit: 1886
April 17, 2016, 08:07:24 PM
#19
Moneypot takes 20% of the house edge, App owners take 50% of the house edge, 30% of the house edge is the advantage that investors hold over the players.

This is a very reasonable business model, and I don't think there's anything wrong with it. The important part is just being honest and clear about it, so everyone knows what they're getting into. Earlier in the thread you wrote the MP commission was 0.2%, which fine, was a mistake. Then you literally said the commissions are "no where near 70%" using a contrived example of how it's 7%. Now you're being clear, and that's great.

Anyway, I'm glad we're in agreeance upon this.

Quote
This will amount to 70% of the HOUSE EDGE of wagered volume as commission.  It is not 70% commission directly taken from your profits which some may have been led to believe from the traditional use of the word commission.
70% commission of profits is better for investors than 70% of the house edge  Wink  (But worse for MP or Apps, who don't want to eat that variance)



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To onlooking investors, please take the time to understand and realize what is written.  We encourage all investors to do their due diligence and are always standing by to answer any questions or concerns you may have.

You have still side-stepped the most relevant question for investors, what risk level is investors money being risked at? From my reading of response implies a ~3.33x (?) kelly, but I suspect that is a mistake. Could you confirm what that is really the case? I'll ask the earlier question again for clarity: if the bankroll was 100 BTC, and someone was betting on 1%-house-edge binary bet ... what would the max-profit be?
legendary
Activity: 1330
Merit: 1000
April 17, 2016, 03:52:41 PM
#19
Wait, so let's say that the site bankroll is 1000, and I own 10%. Then when someone loses 100, how much do I get? And what if they win 100?

Say the site bankroll is 1000 and you own 10% of that (100 of 1000).  

They bet 100 Bitcoin at a 1% House Edge and lose.  

100 Bitcoin * .01 (house edge) * .5 = 0.5 Bitcoin to App Owner
100 Bitcoin * .01 (house edge) * .2 = 0.2 Bitcoin to Moneypot
100 - 0.5 - 0.2 = 99.3 would be credited to the bankroll

1000 (bankroll) + 99.3 (credit) = 1099.3 (new bankroll)
You'd still have 10% of this.  1099.3 * .1 (share) = 109.93 Bitcoin (new share)

legendary
Activity: 1463
Merit: 1886
April 17, 2016, 06:59:19 PM
#18
I'm not at all trying to be dishonest or disingenuous about it.

I stated what is an objective fact, your amortized commissions are 70%. I didn't mean that as an attack, or that it's bad (in itself, it isn't). I meant that as a fact.  Which it is. To which you reply:

I think you may have confused the commission as well.  It's nowhere near 50 or 70%.  If using the above example, the investors would be effectively paying a 7% commission on their profit.

Which is both insulting, and a plain lie.  Even how you derived the 7% commission is using the same definition of commission I am, so you can't even pretend it's a terminology mistake.

It kind of seemed like you're setting these questions up so that you can knock us down when we respond.

That's not my intention, I just wanted straight answers.

Quote
   I have no quarrels with you and I don't know why there seems to be tension between us.

I think when you're holding other peoples money, there's a certain duty of care which you're not showing. At least in my books, when you hold other peoples money, tell them you're risking it according to a certain schedule, and don't -- that's negligent.

I honestly don't even think 90% commissions is unreasonable, and there's many investors that would line up for that if you can give them enough turn-over and risk management.

Quote
If bettors were all to hypothetically bet to the point where they reach the long run with their bets and with that much volume, I think any investor would be significantly pleased knowing that the greatly reduced volatility over a much larger sample greatly benefits their return on investment position even after including the app fee and house fee payouts.

Of course, that's why investors invest. The more bets the better.


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I'm of the firm belief that our investment is +EV.

Well obviously. That's pretty hard to mess up (although I can name two casino that did).

Quote
  You seem to have accused us of otherwise
Huh? I have never said, or implied such a thing. If anyone told you I said that, they are lying. And if your investments were -EV, it's probably more likely that I'd start gambling on your site than saying anything.

Quote
(for reasons I do not know, especially since you're the one that set it up this way)... Can you please explain why you feel this way and why you feel this way so strongly that you're saying it disqualifies us from being able to run a casino?

I'm saying that if your previous answer to me is correct, you're risking >3x as much for investors as you should. When I originally wrote MP, if the bankroll was 100 BTC the max-profit on a 1% game would've been 0.5 BTC. Which is the fully kelly. You added an extra 20% commission, and are saying that max-profit is 1 BTC. When in actuality you should've decreased the max-profit to keep the bets kelly-compliant. See my earlier point about negligence.
legendary
Activity: 1463
Merit: 1886
April 17, 2016, 04:58:19 PM
#17
I think you may have confused the commission as well.  It's nowhere near 50 or 70%.  If using the above example, the investors would be effectively paying a 7% commission on their profit.

I hate to be blunt, but that's just both disingenuous and dishonest.

Yes, in the absolute most extreme case where someone only does a single giant bet, the commissions might be 7%. In reality, even when people lose money they turn over their money several times.

So what's typical? Well, how about some maths. A gambler who's got 100 BTC to lose, will on average he'd be able to wager 10000 BTC (on the standard 1% house edge site) before running out of money. Which means investors are going to pay: 10000 * (0.5 + 0.2) in commissions, or 70 BTC. The remainder goes into the bankroll (30 BTC).

Which is exactly what I said. Investors are paying an amortized 70% commission.


Quote
The max bet is still set to the previous settings of the original Moneypot settings, 1x Kelly.  If the house edge is 1%, you can only win a maximum of 1% of the bankroll.  If the house edge is 5%, you can win up to 5% of the house bankroll.

*sigh*. As I suspected. You're off by over a factor of three, which means you're putting investors into negative expected bankroll growth territory.  I would've thought understanding half a page of basic casino maths would be a prerequisite to running a casino.


Although to be fair, you're not the first investment site owner to struggle with it. It's pretty sad, but I think Dooglus is the only guy running a site that really gets it.
legendary
Activity: 1330
Merit: 1000
April 17, 2016, 03:36:24 PM
#17
Yes, it is 20% of the house edge.  Not 0.2%. My mistake. I meant to say to calculate it, you would take House Edge * 0.2% * wager to see the house commission.
legendary
Activity: 2198
Merit: 1014
Bitdice is scam scam scammmmmmmmmmmmmmmmmmmmmmmmmm
April 17, 2016, 04:12:57 PM
#16
Yes, it is 20% of the house edge.  Not 0.2%. My mistake. I meant to say to calculate it, you would take House Edge * 0.2% * wager to see the house commission.

The documentation on MP needs to be fixed too then. It's not a particularly small mistake, considering it's the difference between investors paying amortized 50.02% commissions vs 70%. Also, would you be able to answer my earlier question about the max bet, which is probably the most important. Grin

Yes, I'll fix up the FAQ.   Although it doesn't read as 0.2% of the house edge there.  It is referenced as 0.2% of the wagered amount which works out if the house edge is 1% but is slightly off if it isn't.  Nonetheless, I'll go ahead and change that up.  Thank you for pointing that out.

The max bet is still set to the previous settings of the original Moneypot settings, 1x Kelly.  If the house edge is 1%, you can only win a maximum of 1% of the bankroll.  If the house edge is 5%, you can win up to 5% of the house bankroll. 

However, we're currently in the process of re-writing it to have a hard cap max bet in the very near future. 
  

What about Plinko bets? Max win is set to fixed  1% of bankroll?
This can not happen again https://www.moneypot.com/bets/18530298 ?
legendary
Activity: 1463
Merit: 1886
April 17, 2016, 03:45:42 PM
#15
Yes, it is 20% of the house edge.  Not 0.2%. My mistake. I meant to say to calculate it, you would take House Edge * 0.2% * wager to see the house commission.

The documentation on MP needs to be fixed too then. It's not a particularly small mistake, considering it's the difference between investors paying amortized 50.02% commissions vs 70%. Also, would you be able to answer my earlier question about the max bet, which is probably the most important. Grin
full member
Activity: 174
Merit: 100
April 17, 2016, 03:28:32 PM
#14
Hopefully somebody from MP can shine some light in this question...
legendary
Activity: 1078
Merit: 1024
April 17, 2016, 03:18:53 PM
#13
If the share is fair, you should get 10% of whatever people lose in total.

Something for Dogedigital to answer, but as I understand it, with 10% of the bankroll you will get 3% (amortized) of what people lose in total (the rest of apps and MP)

I doubt someone that has build this kind of service/opportunity would give the full 10%.
No gain for them otherwise.
legendary
Activity: 1463
Merit: 1886
April 17, 2016, 03:15:17 PM
#12
If the share is fair, you should get 10% of whatever people lose in total.

Something for Dogedigital to answer, but as I understand it, with 10% of the bankroll you will get 3% (amortized) of what people lose in total (the rest of apps and MP)
legendary
Activity: 1078
Merit: 1024
April 17, 2016, 03:12:09 PM
#11
Wait, so let's say that the site bankroll is 1000, and I own 10%. Then when someone loses 100, how much do I get? And what if they win 100?

People never win in the long run, unless the site is bad.
If the share is fair, you should get 10% of whatever people lose in total.
legendary
Activity: 1463
Merit: 1886
April 17, 2016, 03:03:29 PM
#10
Commission is the house fee taken to pay for servers, hosting, work and services to maintain the website.

It is 0.2% of the house edge.

For example, if you're playing at BetterBets at a 1% House Edge and bet 1 Bitcoin: 1 Bitcoin (bet) * .01 (house edge) * 0.2 (commission) = 0.002 Bitcoin (Total Comission taken).


Ugh, is it 0.2% (what the FAQ and your post says) or 20%?

--

I'm going to assume it's 20%, because 0.2% is negligible and doesn't make much sense.  Also the total amount of commissions should include what is paid to apps, no?

So someone bets 1 BTC @ 1 house edge. The apps get 0.005 BTC, MP gets 0.002 .. and investors have all the risk?

Also just to make sure it's clear for investors, let's assume the the bankroll is 100 BTC and someone wants to bet on a binary 1% house edge bet. What exactly is the max profit of that bet going to be? Because if investors are going to take 100% of the risk for 30% of the EV, it's pretty damn important they are risking under a kelly.
legendary
Activity: 1330
Merit: 1000
April 17, 2016, 10:52:30 AM
#10
Sorry I'm sounding like such a newb, but what is commission?

Quote
What commissions do you charge?
MoneyPot charges 0.2% commission on all wagered bets. Furthermore to this, all apps are paid a commission of up to 50% of the house edge. So this means if someone bets 1 BTC with a house edge of 1%, from the investors perspective it is much more similiar to a 0.5% house edge bet, as the investors give the app half the house edge (in this case 0.005 BTC) in commission.

However, we do respect the kelly and will never put investors at more risk than that.

Commission is the house fee taken to pay for servers, hosting, work and services to maintain the website.

It is 0.2% of the house edge.

For example, if you're playing at BetterBets at a 1% House Edge and bet 1 Bitcoin: 1 Bitcoin (bet) * .01 (house edge) * 0.2 (commission) = 0.002 Bitcoin (Total Comission taken).

But didn't it say they do 50%? Also, so the higher the commission the less the investors get?

50% of the house edge is paid to the app owner of the corresponding bet.

Investor profit return on investment is a tricky beast.  You can't necessarily calculate it by commission.

Its success is a mixture of % of bankroll, volatility control, volume, consistency, expansion, and trustworthiness of the operators themselves.

Be forewarned that I'm heavily involved in Moneypot, but I whole heartedly believe that the Moneypot investment field is a sound one and one of the best in all of crypto currency investments. 
full member
Activity: 174
Merit: 100
April 17, 2016, 02:32:10 PM
#9
Wait, so let's say that the site bankroll is 1000, and I own 10%. Then when someone loses 100, how much do I get? And what if they win 100?
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