Quote from: magician on July 05, 2014, 10:08:21 PM

One thing Venetian and I have been seriously considering is reducing the house edge for a period of time. Specifically, we'd like to reduce it from 1% to -2% or -1%. This would mean that gambling with CHA would be +EV (positive expectation). This should encourage more gambling and be a way to grab attention in the news. If we set house edge to -2% and people wager 500,000 CHA for an expected house loss of 10,000 CHA, I'd call that a huge win for Chancecoin. The theoretical price should decrease by about 2%, but the price should really skyrocket after that kind of gambling volume.

Another feature we're planning to implement is betting in the Chancecoin casino with BTC. With the recent shutdown of the centralized dice betting behemoth Just-Dice, this is an opportunity for us to step in and take a big piece of the action. We're still working out the exact details, but essentially, it will look like this: when betting, a user will have the choice of betting with BTC or betting with CHA. If the gambler bets with CHA, everything works like it does now. If the gambler bets with BTC, the BTC is converted into CHA, the result is determined, and then the gambler will either keep the CHA or automatically convert the CHA back into BTC. In order for this to work, we have to have a tight decentralized CHA/BTC order book.

We've decided to create a separate "casino liquidity" order book, where all quotes will be two-sided, BTC and CHA will be escrowed in advance, and quotes will have to be less than a certain maximum width. For example, I could quote 1,000 CHA and 1 BTC at a price of 0.001 and a width of 5%, so I'm essentially willing to buy 1 BTC of CHA at 0.000975 or sell 1,000 CHA of BTC at 0.001025. The quote is two-sided, so I'm committed to potentially getting filled on either side. The 1,000 CHA and 1 BTC are held in an escrow address. The "casino liquidity" order book is only there for casino-related transactions. Someone may bet BTC and have it converted into CHA using my quote. If the same gambler wants his CHA automatically converted back into BTC, he may get BTC back from me after his bet is resolved. The quote width essentially becomes a kind of house edge. The escrow addresses where quoted CHA and BTC are stored could be run by multiple trustworthy members of the community, and would be operated by the Chancecoin wallet itself. One question is, would people be willing to provide much liquidity to such a decentralized order book.

Your thoughts are appreciated.

Ever innovating,
Magician

I think its important to only use CHA as the only base currency...concentrate on making a fast, easily accesible interface and users will naturally acquire CHA to participate...diluting the demand for CHA by incorporating BTC is a mistake you are about to repeat already made by the Counterparty devs. Look at their awesome innovation yet compare their market capitalization to Mastercoin's

Someone once said: "Insanity is doing the same thing over and over again but expecting different results"....