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Offline MrJeans

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Trying to understand a Bitshares use for Gambling
« on: June 27, 2015, 01:14:13 PM »

Let me know if this is already discussed somewhere else.

So lets say I want to host a betting game for the next soccer match with Arsenal vs Man united.

So I issue a market pegged asset called 'Ars vs ManU'
I then function as the delegate and produce a price feed according to the outcome of the game.

I can allow people to bet that ManU will win or loose.
People can go long if they think ManU will win and Short if they think ManU will loose.
So if I price the asset at 1bitUSD to 1gameCoin. If the score is '1Ars : ManU 2' and ManU has won the match. I would change the price feed to 2bitUSD to 1gameCoin. So those who went long double their money. Vice-verse if ManU looses.

Have I got the basic idea or am I missing it.

Offline sittingduck

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Re: Trying to understand a Bitshares use for Gambling
« Reply #1 on: June 27, 2015, 02:03:49 PM »
No.   More later.


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Offline bytemaster

Re: Trying to understand a Bitshares use for Gambling
« Reply #2 on: June 27, 2015, 02:59:34 PM »
Create a bitasset that can only be created by placing one BitUSD in collateral.   
No margin calls are possible because the maximum outcome is 1 USD and the min outcome is 0 USD. 

At the end of the match, the issuer will trigger a "black swan" at a price of either 1 or 0 USD.    If you win you get $1 if you lose you get 0. 

If you buy at $0.1 and win, then you get a 10x return.    If you buy at $0.50 and win you get a 2x return.  If you buy at $0.90 and win you get a 11% return.    Likewise, if you sell at $0.1 and it goes to 0 then you make $0.1.   
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Offline Permie

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Re: Trying to understand a Bitshares use for Gambling
« Reply #3 on: June 27, 2015, 03:13:29 PM »
Create a bitasset that can only be created by placing one BitUSD in collateral.   
No margin calls are possible because the maximum outcome is 1 USD and the min outcome is 0 USD. 

At the end of the match, the issuer will trigger a "black swan" at a price of either 1 or 0 USD.    If you win you get $1 if you lose you get 0. 

If you buy at $0.1 and win, then you get a 10x return.    If you buy at $0.50 and win you get a 2x return.  If you buy at $0.90 and win you get a 11% return.    Likewise, if you sell at $0.1 and it goes to 0 then you make $0.1.   
This is very neat
I think it speaks well to the flexibility of a system that follows few strict rules which provide the boundaries a potential-well of innovation.

Once people are in agreement of a few ground rules they are free to cooperate and collaborate as they see fit, likely supported by profits gained from serving public need
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Offline MrJeans

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Re: Trying to understand a Bitshares use for Gambling
« Reply #4 on: June 27, 2015, 05:25:14 PM »
Create a bitasset that can only be created by placing one BitUSD in collateral.   
No margin calls are possible because the maximum outcome is 1 USD and the min outcome is 0 USD. 

At the end of the match, the issuer will trigger a "black swan" at a price of either 1 or 0 USD.    If you win you get $1 if you lose you get 0. 

If you buy at $0.1 and win, then you get a 10x return.    If you buy at $0.50 and win you get a 2x return.  If you buy at $0.90 and win you get a 11% return.    Likewise, if you sell at $0.1 and it goes to 0 then you make $0.1.   
This is very neat
I think it speaks well to the flexibility of a system that follows few strict rules which provide the boundaries a potential-well of innovation.

Once people are in agreement of a few ground rules they are free to cooperate and collaborate as they see fit, likely supported by profits gained from serving public need
Ooooh okay

But doesnt that mean that there is a much higher incentive to buy in an opposite 'user issued asset' than to short if you know a team is going to loose.

The way I understand it, is that if you know a team is going to loose and you take out a short position you can double your money. But if you buy a user issued asset betting that the other team is going to win you could make a lot more than 2X.

So shorters would never sell below $0.5, right? and the most anyone can do is double their money?
« Last Edit: June 27, 2015, 05:41:03 PM by MrJeans »

Offline Permie

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Re: Trying to understand a Bitshares use for Gambling
« Reply #5 on: June 27, 2015, 06:03:42 PM »
Create a bitasset that can only be created by placing one BitUSD in collateral.   
No margin calls are possible because the maximum outcome is 1 USD and the min outcome is 0 USD. 

At the end of the match, the issuer will trigger a "black swan" at a price of either 1 or 0 USD.    If you win you get $1 if you lose you get 0. 

If you buy at $0.1 and win, then you get a 10x return.    If you buy at $0.50 and win you get a 2x return.  If you buy at $0.90 and win you get a 11% return.    Likewise, if you sell at $0.1 and it goes to 0 then you make $0.1.   
This is very neat
I think it speaks well to the flexibility of a system that follows few strict rules which provide the boundaries a potential-well of innovation.

Once people are in agreement of a few ground rules they are free to cooperate and collaborate as they see fit, likely supported by profits gained from serving public need
Ooooh okay

But doesnt that mean that there is a much higher incentive to buy in an opposite 'user issued asset' than to short if you know a team is going to loose.

The way I understand it, is that if you know a team is going to loose and you take out a short position you can double your money. But if you buy a user issued asset betting that the other team is going to win you could make a lot more than 2X.

So shorters would never sell below $0.5, right? and the most anyone can do is double their money?
Unless I am mistaken what you are talking about is taking advantage of a discrepancy in price across separate prediction markets of the same event.
These price difference would be very low, due to people noticing the risk-free profit and by their actions bringing the prices back into alignment (arbitrage).

The price of a particular asset, man-u win, will vary depending on the perceived likelihood of Man united actually winning.
So you the offered odds will be very similar across different markets
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