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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.

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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

Bitcoin dominance is an irrelevant metric unless…

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The volatile cryptocurrency market has given way to multiple metrics for the market observers to analyze and predict what’s coming next. One such metric has been Bitcoin dominance, but as per Su Zhu, it should not be relevant to you unless you are a billionaire.

How so?

The CEO of Three Arrows Capital opined this after noticing the trend of the newcomers avoiding Bitcoin and Ethereum and opting for risky crypto tokens. When the largest digital asset was stuck in a wider correction period, altcoins like Dogecoin [DOGE] grabbed much attention. This was possible due to the hype created by Tesla CEO or, self-proclaimed “doge-father,” Elon Musk and the Doge community.

However, understanding the newcomers’ enthusiasm Zhu opined that if he were to bet on projects now, he would choose Solana and Avalanche.

Despite the popularity of altcoins, the exec remained bullish on Bitcoin and Ethereum as he expected, the former to flip gold’s market cap, and the latter to eventually hit a value above $25,000. Bold predictions, but nothing we haven’t heard before.

However, newcomers were more bothered about the dominance metric but as data suggested, Bitcoin dominance has recently been falling. The dominance was hit earlier but recovered to form a peak at 49.25% on 30th July. But given the correction phase that followed, the dominance of BTC fell and was last noted to be at 40% on 10th September.

It is interesting to note that despite plenty of adoption related news such as that of El Salvador, coming in over the past few weeks, it looks like the dominance has remained unaffected by it.

Source: CoinMarketCap

Twitter user and crypto enthusiast, @HsakaTrades also noted that Bitcoin dominance was not a relevant metric for anyone who has a “sub mid 9fig portfolio]. Agreeing with Hasaka, Zhu added,

“To clarify, if you’re holding for 5+ yrs, you shouldn’t be thinking about btc dominance in the first place. And obv btc and eth have a strong place in that portfolio.

If you’re allocating actively atm, and think debating btc v eth v alts is a good framework, you’re ngmi.”

While this advice could stand true for experiences, long-term trader interested in making money, but not the ones looking out to invest in tech. This was especially highlighted in the comments wherein the crypto users were upset about the CEO’s Solana [SOL] recommendation that recently witnessed an outage.

Nevertheless, the trading advice and strategies differd from trader to trader and Zhu’s opinion to not focus on the BTC dominance, prebably stemmed from a hodlers perspective. While interesting projects were now erupting in the crypto space, it looks like Bitcoin’s dominance, not only in terms of price, but as a crypto project could be challenge.

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Source: https://ambcrypto.com/bitcoin-dominance-irrelevant-for-anyone-not-10figs

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Blockchain

Millions of Dollars Raised Through Solana’s DeFi Projects

Millions of Dollars Raised Through Solana's DeFi Projects

PAI, an algorithmic stablecoin, backs Parrot Protocol. Grape Protocol was the primary source of the downtime. Solana has been up

The post has appeared first on thenewscrypto.com

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  • PAI, an algorithmic stablecoin, backs Parrot Protocol.
  • Grape Protocol was the primary source of the downtime.

Solana has been up nearly 3200% since August. Investors’ interest in Ethereum rival systems featuring DeFi, NFT, and smart contract services has risen dramatically.

The software applications that simulate legal contracts are smart contracts. Once housed on a blockchain network, the software application will run automatically without human intervention.

This month, Solana’s DeFi initiatives raised millions of dollars. This is another proof of Solana’s potential to compete with Ethereum. Currently, Ethereum has the most DeFi and NFT projects.

Bots raced to invest in a token sale for Grape Protocol over flooded the blockchain, causing Solana to collapse for 17 hours on Tuesday. Let us take a look at the few IDO that helped raise millions.

Grape Protocol

Grape Protocol, the primary source of the downtime, managed to raise just $600,000 on Raydium’s “Acceleraytor.”

Tokenized communities may use Grape Network to connect to platforms like Discord, Telegram, and soon twitter to collaborate over Solana and reward members with crypto.

Parrot Protocol

Parrot Protocol is based on Solana. Investors in the Initial DEX offering included Sino Global Capital, Alameda Research, and QTUM VC. Moreover, to put it simply, Parrot is a non-custodial lending platform and decentralized exchange.

PAI, an algorithmic stablecoin, backs Parrot. Furthermore, Parrot offered a governance token called PRT in its IDO. Thus, allowing investors to vote on the protocol’s operation and farm yields on Solana without affecting other Layer 1 blockchains.

Solana’s failure impacted Parrot’s IDO, but it was resolved by Sept. 16. Moreover, the team said it would start working on PRT staking, NFTs, and adjustable interest rates in “Letter from the Parrot.”

Several Solana initiatives will be launched in the next day’s/weeks. Examples include Solanium, Boca Chica, and Solstarter. On Solanium, whitelisted users may buy MatrixETF.

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Source: https://thenewscrypto.com/millions-of-dollars-raised-through-solanas-defi-projects/

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Blockchain

Cosmos (ATOM) Lead Market-Wide Rally

Cosmos (ATOM) Lead Market-Wide Rally

Cosmos’ creators call it an “internet of blockchains.” ATOM also launched a bridge to Ethereum at the end of August.

The post has appeared first on thenewscrypto.com

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  • Cosmos’ creators call it an “internet of blockchains.”
  • ATOM also launched a bridge to Ethereum at the end of August.

Cosmos (ATOM) blew up 10.74 percent overnight to establish a new price of $39.58, according to CoinMarketCap. It surpassed $40 yesterday, reaching $40.76. Despite today’s minor decline, Cosmos’ price was still ten dollars more than seven days ago, and twenty dollars higher than this time last month.

Its creators call it an “internet of blockchains.” It’s an interoperability network that allows various blockchains to connect, exchange data, and interact with one another.

In short, Cosmos claims to address some of the “hardest problems” in the blockchain sector. It seeks to provide an alternative to “slow, costly, unscalable, and ecologically harmful” proof-of-work protocols like Bitcoin by connecting blockchains. On August 18, Cosmos rose 25% from $15 to $20 after the introduction of Emeris, a cross-chain DeFi interface.

It also launched a bridge to Ethereum at the end of August. The inter-blockchain communication protocol (IBC) allowed trade across the Cosmos and Ethereum networks for the first time, along with the integration of Sifchain.

Cosmos Might Soon Over Take FTX Token

Cosmos is “Blockchain 3.0” — thus, as previously said, ease of usage is a significant objective. To this aim, the Cosmos SDK emphasizes modularity. This enables a network to be created quickly using existing code. Long term, it is anticipated that sophisticated applications would be simple to build.

Cosmos now has the twenty-first largest market value, but at this pace, it would only take $0.8 billion to flip FTX Token and make a bold entry into the top twenty.

Some in the crypto sector, much worried about the amount of fragmentation in blockchain networks. There are hundreds, yet few can converse. Cosmos wants to change this by making it feasible.

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Source: https://thenewscrypto.com/cosmos-atom-lead-market-wide-rally/

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