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Understanding Bitcoin Gambling Investments

Did you know you can be the house on Bitcoin Casinos and earn a good profit? Read the details on how you do that here.

The post Understanding Bitcoin Gambling Investments appeared first on Bitcoin Millionaire.

Republished by Plato

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I have received a lot of messages, comments and emails over the last week basically saying ‘gambling is not investing!’ Well the people who sent me this message are 100% correct, but only because they think I am actually gambling on a Bitcoin site. So before I delve into understanding Bitcoin gambling investing further, let me state the obvious first:

  • No one will ever make money gambling on a Bitcoin casino or Bitcoin dice site (in the long run).
  • I do not gamble on any Bitcoin casino or Bitcoin dice site with my Bitcoins.
  • Bitcoin casinos are not that different from a casino in Vegas, in that, the house always wins.
  • I am investing in Bitcoin gambling sites as the house and I call that Bitcoin gambling investing.

What Is Bitcoin Gambling Investing?

So using the Vegas example again, a lot of money is required to run/build/create a casino and also pay out the occasional winners. If you run a casino and players want to bet $10,000 on black or red on roulette, you have to be prepared to pay them $10,000 if they win.

What happens if that player has a lucky streak and wins 10 times in a row placing $10,000 bets? You now have to pay out $100,000 dollars!

So this is where a bankroll comes into play. As a casino you need to ensure you have enough money to pay out the winners. In Bitcoin gambling sites the general rule of thumb is that you need to set the maximum amount someone can win to 0.5% of your bankroll (if you have a house edge around 1% – if the house edge is higher or lower this ratio changes) to avoid a catastrophic event happening to your bankroll.

Using the scenario above and assuming $10,000 is the maximum someone can bet (ignoring that roulette has a much higher house edge), then the bankroll would need to be $2,000,000 ($10,000/0.5%) to allow for a player to bet a maximum of $10,000 a bet.

$2,000,000 is a lot of money! Most Bitcoin developers that have the skill set to build a casino do not have access to a bankroll of that size. And in today’s market, players want to bet $10,000 and sometimes more on a single bet. So the casino owners need to get a sufficient bankroll which usually requires them to attract investors and creating a crowd funded bankroll.

How Do Bitcoin Casinos Attract Investors?

To get investors for a crowd funded bankroll, casinos need to make it an attractive place to invest. In this case they need to share a high percentage of the sites profits with investors. The standard today is that bankroll investors get anywhere from 50% – 80% of the sites profit if they invest in the bankroll.

The exact terms might change as to whether it is a share of the profit/loss or a percentage of profits after the house takes their cut first. Always read the fine print for these details as a straight profit share is very different to when a casino takes their cut off of every bet wagered first.

The profit split given to investors (the 50% – 80% share of the house edge) is evenly distributed to investors based on their share of the bankroll. So if you have 1 Bitcoin invested in the bankroll and the bankroll is 100 bitcoins, then you get 1% of the bankroll investors share.

What happens if a player has a string of wins?

There is only one reason you should worry about a player or ‘whale’ having a big win and impacting your bankroll and that is if the bankroll is not managed correctly. If the bankroll is managed correctly (meaning the maximum win is a very small percentage of the total bankroll), then statistics will do the rest and you should very rarely suffer any long term losses due to to a player winning.

It is easy enough to simulate the whale scenario in excel using a random number generator (or better program for the technically minded) and see just how impossible it is with a 1% house edge and a 0.5% maximum win to destroy the bankroll over time. As opposed to showing theoretical examples below is the real investor returns at Crypto-Games over the last two years:

Crypto-Games Bankroll chart

The investor returns over time in their bankroll has been very smooth. This comes down to the fact that they have a 0.8% house edge (on dice – larger on other games) and a maximum win set to less than 0.5% of the bankroll, plus they share 70% of the profits with investors. I have interviewed one of the founders of Crypto-Games here if you are interested in learning more about them.

What is a poorly managed bankroll?

A poorly managed bankroll is where the maximum win is a large percentage of the total bankroll, anything over 1% is significantly riskier than 0.5%. This means that returns can be chaotic and you may lose in the short to medium term.  A large maximum win as a percentage of the bankroll is usually called ‘leveraging’ your investments in Bitcoin Casinos. This is where a site lets you leverage your investment so you get more exposure to the bankroll. That being said not all leveraged investments are bad.

I currently have over 5 Bitcoins invested in YoloDice that is leveraged at 10x (although the site sets the maximum win from a bet at 2.5% of the bankroll so it is arguable 5x). However, the saving grace for YoloDice is that they share 80% of the 1% house edge with investors. So at other sites where I am only getting around 0.5%, at YoloDice I will be getting 0.8%, so this increase in profit share decreases the risk of leverage slightly (It is still a risky investment).

What sort of returns can I actually get?

This completely depends on a number of factors which can include:

  • Does the casino attract a lot of betting volume? The more the better.
  • Does the casino share a lot of its profit with investors? The more the better.
  • Does the casino share profits and loses with investors or does it just take a flat cut on every bet? A share of profit and losses is much better for investors.
  • What are the expected returns (the betting amount x the house edge x the profit share with investors) relative to the size of the bankroll. The higher the expected returns relative to the bankroll size the better.

I have had 5 Bitcoins in total invested in different sites for the last 8 months. To date the 5 Bitcoin investment is now worth over 7 Bitcoins, so I have made over a 40% return on bitcoin over that time frame (much higher in US dollar terms due to the rise in Bitcoin). You can find all my month recording and notes at Bitcoin Gambling Investments or just look at the weekly chart of returns in the plot below as a percentage:

34 week plot of Bitcoin returns as a percentage from different sites

If you are interested in where my current investments in Bitcoin gambling sites are you can see it on my wallet here. I will be posting my Investment returns every month on the profit tab as well.

40% Returns In 8 Months! This Can’t Be safe? What’s The catch?

It does sound too good to be true and it is for the following HUGE risk factors:

  • Generally no one knows who runs these sites, and they can and have run away with investors money in the past. My best guess is that over 10,000 Bitcoins have been stolen from sites that have run away with everyone’s money.
  • The site could get hacked and your Bitcoins could be stolen.
  • The site may not get enough traffic and betting volume so your returns are low.
  • The site could be highly leveraged or have a long bad streak and you lose money.
  • The site gets shut down for legal reasons and all the Bitcoins are taken. 

Final Thoughts

Diversification is a arguably a safer way to invest in Bitcoin gambling sites, as it can reduce your risk of a catastrophic event. However, there is not that many reliable sites that you can actually invest in, so diversification is limited. Qualitative factors are worth taking into consideration as well that can include:

  • Negative or positive feedback on any forums or review sites.
  • How long has the site been in business? The longer the better.
  • Are the site owners making money? My opinion is if the site has a huge bankroll but their profits are small, there will be a temptation for them to steal the bankroll.

Finally, most of the sites I have invested in I have interviewed on the Bitcoin Businesses page. So check them out as well if you are considering investing in any Bitcoin gambling site and if you have any questions we can ask them directly.

Source: https://bitcoin-millionaire.com/understanding-bitcoin-gambling-investments/

Blockchain

Members of WallStreetBets Forum Alleged in Telegram Crypto Scam Stealing $2M in BNB and ETH

Republished by Plato

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Members of the popular WallStreetBets Reddit forum were suspected of a presumable cryptocurrency fraud that could have caused losses of no less than $2 million. By creating a designated Telegram group, they duped investors by guaranteeing remarkable returns through capitalizing on the recent crypto market rally.

The Core of the Hoax

Per a report by Bloomberg, alleged members of the WallStreetBets Reddit Forum used the Telegram messaging service to execute a blatant scam. A particular account by the name of ”WallStreetBets – Crypto Pumps” presented users the chance to purchase a new token certified as WSB Finance before it was listed on crypto exchanges. The operation is known as a pre-mine sale.

The essence of the fraud was connected to the recent cryptocurrency boom as bitcoin and most altcoins skyrocketed in value lately. With some of the digital assets reaching 1,000% gains, the targeted WSB members conned investors into sending money without asking questions and with the potential of netting huge profits.

The notorious account also urged users to transfer popular cryptocurrencies such as Binance Coin (BNB) and Ethereum (ETH) to a designated crypto wallet and then to reach its ”token bot” to gain WSB Finance coins.

However, the perpetrators never dispatched those coins. Furthermore, another message on Telegram revealed that the people who had already issued a payment had to send an equivalent amount again or they would risk losing their initial investment.


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The Aftermath

After executing the hoax, more than 3,451 Binance Coins were withdrawn on Tuesday (May, 4th) from the wallet inside the Crypto Pumps messages.

Since the price of BNB at that point was approximately $625, the fraud caused losses of more than $2.1 million. Following the scam, thousands of people expressed their frustration and tried to expose the individuals behind the account. Moreover, the quantity of the other cryptocurrency – ether – still remains a mystery.

Two weeks ago WSB admins warned about offers that might try to take advantage of the forum’s name in order to allure the crypto audience. The ”WallStreetBets – Crypto Pumps” account has been removed from Telegram but whoever managed it left a message that might stun the affected victims:

”Buying Lambo now.”

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Source: https://cryptopotato.com/members-of-wallstreetbets-forum-alleged-in-telegram-crypto-scam-stealing-2m-in-bnb-and-eth/

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Blockchain

South Korean Crypto Exchange Accused Of $1.5 Billion Scam

Republished by Plato

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The South Korean cryptocurrency exchange platform V Global was accused of luring 40,000 people into illicit multi-level deceit. The entire scheme amounts to more than 1.7 million won, which equals $1.5 billion.

The Investigation

As reported by the Korean officials, the police raided many places in the country related to a virtual cryptocurrency exchange, and its notorious CEO – known as LEE – alleged to fundraising without regulatory permission. The authorities blocked the exchange’s cash deposits as a part of the investigation.

In total, the Gyeonggy Nambu Police Agency reported that it searched the exchange’s headquarters in southern Seoul along with 21 other places and froze more than $214 million left in the account.

Another report from today shed more light on the developments. According to Yonhap News, the name of the organization is V Global. The Korean police are examining the accusations against them for fraud under the Certain Economic Crimes Weighted Penalty Act, the Similar Receiving Act, and the door-to-door sales business.

The main accusation against the exchange is gaining a deposit of 1.7 trillion won ($1.5 billion) from 40,000 members in the period between August 2020 and January 2021. The announcement revealed that most of the people were elderly or housewives with no experience in cryptocurrency trading.


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Too Good To Be True

The investigation revealed that the exchange urged investors to entrust their funds to an account and lured the members that the expected return would be three times higher than the initial investment. According to the authorities, there was a pyramid element in the scam as the exchange promised to grant an introduction fee of 1.2 million won ($1,065) for every newly recruited member.

The report affirmed that the trading venue paid some members in the form of a block. Therefore, people who signed up earlier received funds from individuals who entered the exchange later.

Moreover, the Korean police seem confident to deal with the fraud case as it revealed its intention to confiscate 240 billion won ($214 million) left in the V Global account as of the 15th last month, even before the prosecution process.

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Source: https://cryptopotato.com/south-korean-crypto-exchange-accused-of-1-5-billion-scam/

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Georgia’s central bank is exploring ‘Digital Gel’ CBDC

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The National Bank of Georgia said that it is considering launching a central bank digital currency.

In an announcement today, the central bank hinted at the issuance of a central bank digital currency, or CBDC, in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The National Bank of Georgia, or NBG, said it would be inviting fintech firms and other financial institutions to participate in the project, named Digital Gel after the symbol for the country’s fiat currency, the lari.

“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” said the announcement. “The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations.”

However, the bank mentioned the possibility of risks in the launch of a CBDC in the Republic of Georgia given the “new and potentially disruptive technology.” The NBG said it may conduct extensive testing of the CBDC in a controlled environment to ensure a smooth rollout, but did not provide any details regarding a timeline for launch.

With a population of roughly 4 million and a gross domestic product of approximately $15 billion, a nation like Georgia falls at the smaller end of countries exploring CBDCs. The Bahamas officially rolled out its Sand Dollar central bank digital currency in October, while China has been piloting its digital yuan in select cities prior to a full-scale launch. In the United States, Fortune 500 company Accenture announced this week it would be partnering with the Digital Dollar Foundation to conduct CBDC trials.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/georgia-s-central-bank-is-exploring-digital-gel-cbdc

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