Quote from: dooglus on July 24, 2014, 10:12:39 AM

Quote from: Rora on July 21, 2014, 08:44:30 AM

Also your investment option makes no sense. Logic dictates that the higher the investment the higher the return. Why would anyone invest 1 btc when they can get the same returns for less risk?

Think about investing with leverage.

The more you leverage the bigger your risk, but the biggest your potential returns.

It sounds like he's saying you can invest 10 BTC with very little chance of losing it all, or invest 1 BTC with a relatively high change of losing it all, and get comparable returns on average.

Hey dooglus

As mentioned your pioneering investment model was my inspiration! I wouldn't say leverage is a good comparison. Leverage has a place in markets, but I don't particularly like it because people can become over-levered before realizing it. I guess similar to credit and debt. When margin calls come disaster strikes. It's easy to confuse other money (leverage) with one's own. In other words people buy what they really can't afford.

In my model you can't invest (or lose) over your balance. There is no leverage. However, you can risk anywhere from 1 to 10% of your balance toward max bet of the house. Everything investors risk, at various ranges, goes toward raising the house maximum profit per bet. So, for example, the scenario with Bob and Dave could be reversed, where Bob still invests 10 BTC and Dave invests 1 BTC, and the house wins (or loses) 1 BTC, but this time Bob's risk percent is 10% and Dave's is 1% meaning Bob would profit (or lose) .99 BTC and Dave profits (or loses) .0099 BTC. In this situation Bob controlled 99% of the house max bet which would be 1.01 BTC (the sum of Bob and Dave's risk stakes). He experiences profit/loss basically as if Dave isn't there.

In my model no matter what amount is invested, investors get a second variable to set, which is risk percent, allowing them to fine tune share of the site's profit/loss to their comfort level.