The question of the year in BTC
Marti, 01 Ianuarie, Anul 5 d.Tr. | Autor: Mircea Popescu
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Rubrica: Bitcoin
Marti, 1 Ianuarie 2013
The rate of winning wagers can be (and is being) calculated at anytime from the blockchain data. Because all the other wagers would still be winning 98.1% of the time (as the house edge is 1.9%), the winning wagers would increase above that.
So if half of all the wagers on SatoshiDICE were from a party that knows the secret (e.g., the operators themselves) then that winning ratio would rise about 99%.
Looking at the charts doogius provides, the winning rate bounces around but is approaching the 1.9% rate.
Marti, 1 Ianuarie 2013
This is true, but the operator himself is not forced to use his knowledge of the secret when betting.
Marti, 1 Ianuarie 2013
I’m also curious if this can be figured out. The irony is that in my head I have proof that it’s not me recycling the funds on SD, but how can I prove this? If I can figure out how to prove my innocence, I’ll earn 100 btc :)
I will also point out that “betting with myself” would perhaps have short term advantages for me (making the site look more popular, etc) but in the medium term it would mean I’d have to pay out more to the S.DICE holders (if they’re really owed 50btc in a month from legit bets, and I inflate the betting volumes, then perhaps I’ll have to pay out 500btc to them).
I’ll make this more interesting… if anyone knows how I can prove that I’m -not- betting against myself, please contact me and tell me, then I’ll split the 100btc bounty with you.
Marti, 1 Ianuarie 2013
If the outputs of the transactions that are the profit are used as inputs in new bets on the site, that would seem pretty conclusive. If the site ops were using a mixer service to swap their profit coins for other coins to use to bet on their site, you couldn’t know.
Marti, 1 Ianuarie 2013
@Erik Voorhees Possibly the hardest 100 BTC you’ll ever earn, too, because that’s just how BTC rolls.
Interesting proposition there. I’ll add it to the main article.
@BladeMcCool Well, from what I understand the rake isn’t taken out of each transaction individually, but moreover it’s the result of EV. However, we can modify what you say to read “if the coins remaindered after a lost bet are used to further bet on the site”, and yea, I guess it’d be pretty conclusive.
I’m not entirely sure just how well mixers work. I guess this could be a good test for the mixer principle at the same time.
Marti, 1 Ianuarie 2013
My money is on pirateat40 being bored with all the BTC he gathered.
Marti, 1 Ianuarie 2013
The mixers work pretty damn well. About the only way to prove that the earnings are being reused is to see if the profits are going to any mixing services, instead of stock holders, and then make a big assumption about where they go next.
Actually, one way Erik could prove his innocence is by funneling all the earnings into a collection of publicly known addresses, with all the outputs declared and easily traced (some go as dividends, specified amount goes to keep being going, rest stays there), and see if the large wages continue to go on. If the sum of wages is greater than the sum pushed back onto the site to keep it going, and especially if the sum of wages doesn’t change from the previous period, then that could be somewhat of a proof. Though this would depend entirely on Erik’s cooperation, thanks to the publicly verifiable blockchain record this can all be publicly confirmed.
Marti, 1 Ianuarie 2013
@malaimo Now that’s a theory.
Then again, it’s not quite clear how much of the 500k notional he was owing when it blew up is anything but notional.
@Rassah Well, profits going to mixers isn’t necessarily proof of anything, as a legitimate user would have plenty of legitimate reasons to mix the winnings before using them for anything else.
Profits wouldn’t go to stock holders directly anyway, I suppose they could go to MPEx’s deposit address, but then again S.DICE is being net sold still so the operator can just not withdraw as much and never have to deposit.
I’m not sure what the “all winnings go to one address” scheme would add to what we know currently. As it is, all bets go to a set of 20 or so addresses, which are known and fixed, and it’s also known which of those are losses. So it’d seem it’s there anyway.
Marti, 1 Ianuarie 2013
It’s probably just being used as a mixer itself, by somebody who doesn’t care about paying 2% for the service.
Marti, 1 Ianuarie 2013
Nah, that does not work. Suppose Herp sends some btc to SDICE. If he wins, he will get the winnings back at one of the addresses he used to send from, which means that the sender is linked to the receiver, no washing occured. If he loses, he will still get a little sent at one of the addresses he used to send from, which idem.
In point of fact SDICE is pretty useless as a mixer.
Marti, 1 Ianuarie 2013
If all the company profits are going to a set of known addresses already, anyway, then why not just see if any of the profit outputs are going to betting inputs? The profits in this case are company’s, and thus only go to Erik and the stockholders, so just ask Erik not to use any mixers for a while, and see if any profits from known addresses are recycled into the bets. Sounds like it should be fairly straightforward.
Marti, 1 Ianuarie 2013
Sure. Sounds like a perfectly reasonable approach to the matter.
Marti, 1 Ianuarie 2013
Addendum: profits go to Erik, stockholders, and bet payouts (losses). None should be turning around and going into the bet addresses.
Marti, 1 Ianuarie 2013
Well not really, for sure winners bet again all the time.