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Offline Empirical1

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Zero-Rake Lottery Coin (Using distributed inflation)
« on: July 05, 2014, 12:02:27 AM »

Very pioneering FreeTrade! I wish you luck with Lottoshares!

My honest opinion is that you will struggle getting traction with this format because of the

The Rake Problem - Because you don't have a big jackpot*, even though we are calling it a lottery, it will be viewed like playing dice. Except a much more expensive (higher rake), complicated, non-instant version & where if you win, the 'jackpot' is likely to be small & you may not even get a fair share because the market will not be able to absorb you cashing out.

Jackpots* - The main reason people are willing to pay a big lottery premium, (Higher rake), is for the chance to win a life changing sum of money.  At some point whether your odds are a fair 5 million to 1 or 10 million to 1, you don't care because you think it's so unlikely anyway, but it's nice to have that buzz of having a shot at the big one.

I think the first person to solve the Jackpot problem will have the biggest lottery chain, but I also have an idea for a distributed inflation lottery system, I kind of thought about a few months in the other forum, I've expanded on, that should be popular and be a very profitable investment for shareholders, especially early adopters. 

Zero-Rake Lottery Coin (Using distributed inflation)

Prizes are awarded in a lottery format using distributed inflation. (Like Bitcoin - but instead of inflation going to pay miners it goes back to shareholders in a lottery format.)

Q: How do shareholders make money if there is zero rake and their shareholding is being inflated away? 

A. Bitcoin prices surged over 2000% in 2013 more than offsetting the 12% inflation that was paid in new coins to miners. Similarly if the Zero-Rake coin is popular,  the coin price should increase far in excess of the inflation paid in new coins to lottery winners. (Plus of course shareholders might just win the lottery too themselves.)

Understanding the great appeal of 'Zero-Rake' as well as using inflation as the method to create the prize pool -

'Zero-Rake' - Almost every gambling game on the planet charges some rake. Lotteries especially often have very high rakes.
To be able to offer a 'Zero-Rake' Lottery is quite a selling point!

Inflation - The human mind for some reason is generally terrible at comprehending inflation, which is why bankers use it as one of the main vehicles for stealing the general populations wealth.

Example:

If you had a 100 Bitcoins at the beginning of 2014 you'd still have 100 Bitcoins at the end of the year but because of the inflation you would have a smaller % of the total Bitcoins. However the mining cost charged in that way does not seem to bother most users. 

Imagine if they had 100 Bitcoins in their wallet and there was no inflation, but instead every month, the miners removed one Bitcoin, so at the end of the month they only had 99 coins, and so on, so at the end of the year they only had 88 Bitcoins in their wallet.  How would the average user feel?

Even though both of these amount to the same thing. The psychological effect of losing those 10-12 Bitcoins is MANY times worse than being left with the same amount of Bitcoins that are a smaller sum of the total.

This inflation effect works in reverse when applied to Zero-Rake Coin vs. purchasing a normal lottery ticket  ;D

Besides being the most fair, rake free way to gamble in history. It will even feel MANY times better than that!!

Normal Lottery: When you have to pay for a normal lottery ticket there is a clear cost associated with it, especially as if you want to play the lottery again the next week you would have to buy another ticket and so on.  Also your lottery ticket has no value if you didn't win. You certainly can't potentially sell it for a profit.

Zero-Rake Lottery Coin: Each token/ticket you own will get you 1 shot at the lottery prizes this week, and again the following week and so on. (It 'feels' like a bargain, even though your odds of winning are decreasing each week as there are more tokens in existence.) Now imagine the alt-coin/DAC is gaining in popularity too!

Then you would have a lottery ticket that may be becoming more valuable every week, should you choose to sell it, as well as giving you a shot in the lottery every single week and it is completely rake-free! The everlasting gobstopper! :D

Personally, I think the psychology of that is amazing.

Using Bitcoin as an example

If Bitcoin, which has 10%+ inflation, was instead of paying those new coins to miners, giving them to Bitcoin holders in a lottery format, then there would be over 15, $1 million prizes awarded every week! If every 0.1 BTC you owned counted as a token, you would have a 150 000-1 shot of becoming a millionaire over the course of the year! (10 BTC 1500-1 Shot)

Using Bitcoin as an example you can see how a popular coin can drastically rise in value, making shareholders wealthy, despite a fairly high inflation rate which can generate significant and frequent Jackpot size prizes if directed at prizes for coin-holders rather than paying miners.

It doesn't solve the Jackpot problem, until the CAP is quite large, but then again in this format there is 'zero-rake' :)

I've mentioned something similar in another thread a few months ago but I still think it's something to think about if your current model doesn't work.
« Last Edit: July 05, 2014, 12:06:25 AM by Empirical1 »

Offline FreeTrade

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Re: Zero-Rake Lottery Coin (Using distributed inflation)
« Reply #1 on: July 05, 2014, 08:46:39 AM »
Yes, I think we discussed it before as the 'Prize Bonds' model - I think it's a good idea. You do still need to pay transaction processors, but with merged mining, that can be fairly low-cost.

Regarding jackpots, LottoShares as it stands has an unlimited jackpot with a 1,000,000X prize for 6 out of 6 numbers. Of course a large prize affects money supply, so a large market cap is required to absorb large prizes without too much loss of value. We'll see how that goes. It's experimental! 
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Offline CLains

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Re: Zero-Rake Lottery Coin (Using distributed inflation)
« Reply #2 on: July 05, 2014, 01:46:50 PM »
It is all about creating the appealing front end packaging. If you can offer people transparently honest gambling with 100 thousand dollars prize money each month, with tickets that are transferable anywhere in the world, then you have achieved something great. You only need a market cap of 1.2 million and 10% inflation to do this.

To prevent quicksell you can have delayed spending, or payout. 10% inflation can be as smooth as mining, while still having the Big Prizes in bold. To be honest,  compared to all these other things, I don't see the difficulty in creating amazing lotto DACs, and to delay teaming up with marketing, web designers, etc. just means some flashy douche is going to get there first.
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Offline Empirical1

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Re: Zero-Rake Lottery Coin (Using distributed inflation)
« Reply #3 on: July 05, 2014, 04:43:12 PM »
Yes, I think we discussed it before as the 'Prize Bonds' model - I think it's a good idea. You do still need to pay transaction processors, but with merged mining, that can be fairly low-cost.

Regarding jackpots, LottoShares as it stands has an unlimited jackpot with a 1,000,000X prize for 6 out of 6 numbers. Of course a large prize affects money supply, so a large market cap is required to absorb large prizes without too much loss of value. We'll see how that goes. It's experimental!

 +5% And the experience you gain even if it doesn't prove to be the best model with be super valuable. You can also honour that community with shares in models you feel improve on that one. Good luck!

(You're right that there will be a processing cost associated with the blockchain, hmm.) 

It is all about creating the appealing front end packaging. If you can offer people transparently honest gambling with 100 thousand dollars prize money each month, with tickets that are transferable anywhere in the world, then you have achieved something great. You only need a market cap of 1.2 million and 10% inflation to do this.

To prevent quicksell you can have delayed spending, or payout. 10% inflation can be as smooth as mining, while still having the Big Prizes in bold. To be honest,  compared to all these other things, I don't see the difficulty in creating amazing lotto DACs, and to delay teaming up with marketing, web designers, etc. just means some flashy douche is going to get there first.

 +5% Yes, even though it sounds a lot, 10% inflation per month should still be insignificant vs. the early growth rate of a popular coin. (The rate can obviously decrease over time, perhaps the inflation rate being voted on by shareholders could create optimality? Investor holder mindsets voting low, gambler holders voting high, averaged, don't know.)

 +5% Again. A User friendly front end, promoted cheaply on lottery and other gambling forums should do the trick.

The Lottery DAC is one of the few where first mover advantage really counts. The first one to build a significant market CAP just keeps attracting more users because of the increasing Jackpot.
« Last Edit: July 05, 2014, 04:48:25 PM by Empirical1 »

Offline pharesim

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Re: Zero-Rake Lottery Coin (Using distributed inflation)
« Reply #4 on: July 06, 2014, 12:24:26 AM »
You only need a market cap of 1.2 million

So how many coins do comply with this?
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Offline CLains

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Re: Zero-Rake Lottery Coin (Using distributed inflation)
« Reply #5 on: July 24, 2014, 01:14:30 PM »
Yeah, 10% a month is a bit high. You could do 10% a year, and have 10 000 dollar price money each month at 1.2 million, and as it grows to 12 million market cap (still not that much), 100 000 dollar prices a month would be possible, by that time it could quickly grow to be the biggest lotto on earth I believe because the prizes would make ever larger headlines to attract more people.

Users would experience it as free, and as long as the system is growing 10%+ each year the user would actually earn money. It's just a matter of "keep it simple, stupid." The stage is already set to create the best Ponzi of all time. I am dreaming of course ;)
« Last Edit: July 24, 2014, 01:20:20 PM by CLains »
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