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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

What Coinbase Going Public Could Do For Crypto

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Messari Values Coinbase At Nearly $30 Billion As The Bitcoin Exchange Prepares To Officially Go Public

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Coinbase, the biggest US-based cryptocurrency exchange has disclosed its detailed plan for the upcoming direct listing on the stock market by Nasqad. Coinbase submitted an S-1 report to the US SEC outlining key information such as revenue and ownership structure for investors to carry out due diligence on the company.

According to the document, Coinbase has 43 million verified users and an average of 2.8 million transactions per month. In 2020, the company returned a net income of $322 million from total revenue of $3.4 billion, with transaction fees constituting 96% of the net revenue.

Coinbase which makes most of its profit from bitcoin and Ethereum transactions, also saw a 56% increment on its $1.1 billion direct revenue for 2020 compared to $482 million in 2019.

The company incurred a total of $880 million in expenses for 2020, most of which went to sales, general administrative expenses, and research and development. Transaction reversal costs miners fees, staking fees, and verification expenses constituted $135 million of the total expenses,

Coinbase also made $533 million in 2019, against $579 million in operational and development costs, leading to losses totaling $46 million.

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Coinbase to Usher Crypto’s Real Mainstream Adoption

The report indicates that much of the revenue for 2020 was generated from institutional investors’ activity in the crypto market but with higher retail activity in Q4 2020 than in previous quarters.

Coinbase’s debut as the first publicly listed crypto-exchange in the US is estimated to be one of 2021’s largest new listings of the tech industry. This will have a huge positive impact on the crypto market investors and blockchain technology backers.

According to the crypto trader and analyst Rekt Capital, the public listing will officially open up cryptocurrencies to the public.

“Coinbase going public is another way of saying crypto is going public.”

Coinbase Becomes Decentralized

The update comes a month after Coinbase chose Nasdaq as its direct listing avenue on February 1, following a secondary Coinbase stock launch by Nasdaq Private Market on January 25.

Now that Coinbase has moved to a remote-first environment without headquarters in any city, the company is referring to itself as a decentralized company. Up to 95% of Coinbase employees have the option to work at home, in a post-office world setting, or a mix of both.

“since we’ve made the decision to go remote-first we’ve decentralized ourselves; even after people can safely return to offices, the executive team has no plans to be “in-office” on a regular basis,  and none of them currently live in San Francisco.”


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DISCLAIMER Read More

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

Source: https://zycrypto.com/what-coinbase-going-public-could-do-for-crypto/

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Blockchain

3 types of bitcoin investors that ‘should be concerning to central banks’

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With 106 million global crypto users as of January 2021 and a crypto population that has now surpassed 100 million, a financial expert noted that central banks must now be wary of certain crypto investors. In a new seminar held by the University of Pennsylvania’s Wharton School, part-time professor, Mohamed El-Erian, who is also Chief Economic Adviser at Allianz said that Central Banks should be careful about three specific groups of Bitcoin investors. 

He explained that while the first group of people is investing for positive reasons, the second is motivated by negative factors to adopt Bitcoin. The positive investors “truly believe Bitcoins will become money ”or “a currency as opposed to a commodity.” 

However, El-Erian cautioned that central bank authorities must keep watch on those “being pushed out of everything else and pushed into Bitcoin”, forming the second group that the expert earlier mentioned. 

They look to Bitcoin in order to protect themselves from government investment options, which some investors believe has been “artificially jacked up.” Interestingly, a recent survey found that people aged over 55 opted for Bitcoin due to a fear of currency devaluation – as central banks have historically printed more money to boost economies. The expert said that such people are forced to invest in the asset because “they don’t know how else to mitigate risk.” 

Do you really want to invest in a government bond whose price has been? So ‘let’s diversify, let’s put 2% into Bitcoins.’

El-Erian further categorized “speculators” as the third type of investors, who face profits and losses albeit “in a single day.” According to him, all three types of investors “should be concerning to central banks.”

When it’s trading above $50,000, all three messages are problematic for central banks. So, we are going to see central banks look increasingly at cryptocurrencies as something they should be involved in, and not just stand on the sidelines.


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Source: https://ambcrypto.com/3-types-of-bitcoin-investors-that-should-be-concerning-to-central-banks

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Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high

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Non-fungible tokens (NFT) are rapidly becoming a focal point of the cryptocurrency market as evidenced by stories of millions of dollars being raised in minutes for one-of-a-kind tokenized art pieces and rare collectibles that traders rush to get their hands on. 

One project that has been benefiting greatly from the resurgence of NFTs is Enjin Coin (ENJ), which broke out to a new all-time high of $0.67 on Feb. 25 following its listing on the Crypto.com exchange as well as the launch of spot and perpetual futures trading on FTX.

Data from Cointelegraph Markets and TradingView shows that ENJ rose 52% from a low of $0.438 on Feb. 24 to a new high of $0.67 before experiencing a pullback to its current price of $0.611.

ENJ/USDT 4-hour chart. Source: TradingView

A scroll through the project’s Twitter feed details numerous recent partnerships and integrations that have helped fuel Enjin’s price rise.

Minecraft is one of the most notable integrations for the Enjin ecosystem and users are able to earn special NFTs that unlock secret games inside the video game series.

The platform has also benefited from joining forces with the growing ecosystem of the Binance Smart Chain (BSC), which has launched an NFT educational campaign that Enjin will be part of.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for ENJ on Feb. 24, several hours before today’s price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of the historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. ENJ price. Source: Cointelegraph Markets Pro

As seen on the chart above, the VORTECS™ score for ENJ reached a high of 70 on Feb. 24, shortly before the price began to spike to a new all-time high on Feb. 25.

The growing popularity of the NFT space, along with numerous big-name partnerships has Enjin well-positioned as the current bull market cycle progresses into 2021.

Its recent integration with the BSC provides a way to escape high fees on the Ethereum (ETH) network and could bring a new wave of activity to the Enjin ecosystem.

Source: https://cointelegraph.com/news/exchange-listings-and-nft-boom-back-enjin-s-enj-52-rally-to-a-new-high

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