A better solution would be doing something like a tiered tax system. Higher tiers have a higher tax rate but they only need to pay the higher tax rate on the earnings in that tier. This way, if you bet 0.000001 more btc the house edge isn't doubled.
I have a compromise to offer. Maybe you could have 3 tiers (or more). And players can invest in a combination of tiers. 0.25%, 1%, 5%. Something like that. The highest one could be really high.
But I've mentioned a few times that I'm in favor of multiple investment buckets, if tiers are the difference between a single number denoting acceptable risk on the entire investment and being able to split your investment into higher and lower levels of risk without creating a new account, I would be very happy with that solution.
Guys, all this talk about tiers and buckets is entirely missing the point, simplicity and beauty of what Dooglus is going to implement.
It's two parts:
A) Having the choice to reduce your Max Profit percentage below the Kelly Criterion optimum of 1% (if you are risk averse and want less variance), or above 1% (to, say, 2% or 5%) if you are more risk-seeking (you'd be increasing your profits from whales and increasing your chance of busting). Although it'll be tedious to make the changes, this isn't a complicated system to implement. As someone mentioned before in one of the recent posts, he'll have to change from storing your percentage of the invested total on each bet to your percentage of the invested total AND your risk %. Then divide wins/losses accordingly.
B) Allow you to set your total invested amount, but only deposit a fraction of it in Just-Dice, so long as it is more than the max profit you are risking. This sounds risky, but understand that at no point would it be possible to "owe" just-dice money. You'd simply choose an investment of, say, 100 BTC at 1.5% max profit and deposit, say, 10 BTC. Now, for calculations your investment is 100 and your max profit risk on the first roll is 1.5 BTC. If your investment increases, great! no problem. If it drops, also, no problem, because as soon as your coins on deposit aren't enough to cover your max profit risk, you are auto-divested. A HUGE benefit to this is that this reduces CP risk for investors. You could invest 10K btc at 0.5% (max profit = 50 btc), yet only have to trust Doog with a fraction of them (say 500 btc).
tl;dr forget buckets, and tiers. User-selectable risk is what Doog is implementing and it's going to be siiiiiiiiick. Honestly, it will improve the site, not just settle this discussion.
Okay, I see dooglus is planning on implementing some great stuff.
But, I think some thought should be put into part b. To think about the consequences. Part b doesn't only reduce cp risk. It also acts as a stop loss. But I can see bad things happening with it. First, there should be a mandated down payment, maybe 20% for now.
So, this is like day trading but on drugs. Lets say the site starts losing money, some people get auto divested. The house bet might decrease significantly. So, the people who are still invested gets a bigger portion of the pot. It just matters what the down payment percentage is and what percent of people have 100% down payment. I can just see the site investment vaporizing.
You're really deceiving yourself when you call this for reducing cp risk. It's actually for leverage. It's okay but make it clear, that the huge benefit is that people can leverage there bitcoins. (But, its gonna be weird when the site goes on a losing streak)
Yeah he is!
Part b doesn't only reduce cp risk. It also acts as a stop loss.
That is a great way to put it! It is a stop-loss. This makes me think it's a feature not a bug
But I do understand your concern that if a whale were to suddenly go on a win streak, a bunch of divestors could suddenly be auto divested and investment could fall dramatically and quickly. Though when that happens, that provides an opportunity for other investors to up their stakes or jump in to get a higher percentage of the investment pot. That will be a tremendous opportunity. There is a lot of spectating here, so I suspect people will be ready to jump in. Also, after a couple times of getting auto-divested, people will tend to want to leave enough to not have to deal with it all the time, if they plan on investing long term.
However, I don't disagree that Doog could set a minimum down payment of 10% or 20% to start (or a maximum leverage, if you will). It could be gradually reduced if warranted, or increased it necessary.