Quote from: RealBitcoin on February 23, 2016, 10:23:32 AM

Quote from: TwitchySeal on February 22, 2016, 10:58:36 PM

Quote from: RealBitcoin on February 22, 2016, 10:46:56 PM

Actually it's 49 - 51 isnt it?

51-49=2

Hmm interesting , i never thought of this, i always calculated it with 49-51.

Ok then, so it's 49.5% win, 49.5% loss, and 1% house comission.

Commision and house edge are not the same. House edge assumes the house is playing the game with you (Against you, really). Commision refers to a fee the house charges in exchange for dealing a game. The fee is usually directly affected by the amount bet, like a poker tournament that charges $1000 which goes to the prizepool plus $150 fee that they keep no matter what. Some games , like Baccarat have both. If you Bet player, you are up against the house edge. But you can also bet Banker, which give YOU the house edge, but for that they charge you a commission.

To make things easy to explain, lets assume we are playing a game against the house that only has two possible outcomes. Either Lose 100 units or win 200 units, and the house wants to earn 1% of every unit bet. There are two ways they can do this, by gaining an edge or by charging a commission:

If they charge a commission you could have a true 50% chance of either winning 200 units or losing 100. However, whenever you won, you would have to pay the house a 2 unit fee. (this is similar to the banker bet in baccarat)

If they don't charge a commission, they could make their money by changing the game so that the the player would win only 49.5% of the time, instead of 50% like before. 50.5% (chance of house to win) is 1% more than 49.5% (player chance to win), so we call the house edge 1%.

Quote from: RealBitcoin on February 23, 2016, 10:23:32 AM

Now what does that tell you, it means that the win and loss will be equal in the long run, and its the 1% that drains away your money.

If it were 50-50, you would probably end up breakeven in infinity.

If it were 50-50, you would ~~probably~~ definitely end up breakeven in infinity.

Quote from: RealBitcoin on February 23, 2016, 10:23:32 AM

So what we need to analyze is the 1% house edge how much that drains us and what are our expected chances of beating that short term.

We've already figured out how much the house edge will cost us, it's 1%.

To figure out our chances of winning short term, we have to know exactly what "short term" means. How many bets is the short term?

If it's 1 bet, our chances of winning are 49.5%

As we increase the number of bets we have to make, the chances of winning will go down.

If it's infinte bets our chances are 0%

If the house edge is on our side, it's just the opposite.