dopamine. We're dopamine junkies by design. Be it HN posts/karma or gambling or crystal meth ...
http://www.theguardian.com/science/2013/feb/03/dopamine-the-...
That is an insane level of product-market fit. Can you imagine if you got to claw back all of the equity you gave up at seed and Series A, because your investors wanted your product even more?
You mean "maximum" and 0.5% (after 1% was found to be too much).
"Investing" in the house was generally too slow and boring for gamblers to consider. They are used to being able to double (or lose) their stake in a fraction of a second. By being part of the bankroll they get to make a 1% return per week if they're lucky. The site ran for a year and made investors a total of just over 40% in that year.
For a gambler accustomed to making 100% (or -100%) per second, 40% per year is insignificant. To anyone else of course it's huge.
If someone needs food because he is starving and you make him a (trasnparent) proposition to, say, have sex with you in exchange for food, he is still being exploited.
You could not commit charity without also asking them to have sex with you (or work for minimum wage for you).
That's the rule of charity that I live by. But ofcourse people have different definitions of exploitation, because like 'evil' its a pretty nebulous word.
Well, you can either feed them for free, or if you DO want their work, pay them a fair compensation, even if you can get away with paying them a near-substinence BS wage.
Feeling good with yourself with paying a BS amount because "at least I gave them work and they won't starve this way" is the basis of modern exploitation.
Sure, what's "fair" might not be scientifically and mathematically derived value, but it's not like it's totally opaque either. If your company is enjoying large profits, you pay your execs top dollar for their golden parachutes, and you are paying your employess just enough to live hand-to-mouth, then increase that.
The bigger legal issue, so far, besides the gambling and the one they actually got in trouble for was for selling unregistered securities to the investors. He got a 15k USD fine for that.
1) The house edge is 1.9% rather than 1%
2) Every bet is a transaction on Bitcoin's blockchain. So the rapid-fire style betting of Just-Dice is not possible as each bet needs to be verified.
3) The investment model was through shares that paid dividends. On months the site ran at a loss, a dividend was not paid.
The anonymous Dooglus ran statistical analysis of Satoshi Dice for almost a year on the Bitcoin forums (to verify its odds were honest), then started Just-Dice as an experiment in a different investment model.
Dooglus lived in Canada and closed the site due to a new virtual currency law there several months ago. He also ran the site Doge-Dice. He left the two sites running just so investors and gamblers could withdraw all their deposits, but new deposits and bets could not be made (almost the exact opposite of what happened at MtGox when it shut down).
1) Choose your bet size and chance to win. The house always had a 1% edge, reflected in the payout. This edge is much lower than slot machines in Vegas.
2) Invest in the house. Every bet affected your bankroll based on your % invested relative to the total bankroll. The house edge was on your side.
The operators of the site, Deb and Doog, encouraged anyone trying to make money to invest. They argued the expected value was positive, even though high-rollers sometimes went on winning streaks.
Despite the warnings/statistics Doog produced and the fact that there was a +EV way to play (investing), players still got addicted to the dice game itself. The rolls resolved in a fraction of a second, so some players would go on a tear and bet 3-4 times a second. The minimum payout was 1% of the house bankroll, so single bets of several hundred bitcoin were possible.
Several high-rollers ("whales") played for 14-16 hours straight in a state of intense "flow", generally winning early on and losing everything by the end. Sometimes hundreds of thousands of dollars of bitcoin (1000+ btc) lost in a single session. Sometimes coins would come out of cold storage to continue playing. The site had a chatroom where even investors encouraged the player to stop before they were ruined, but the players would generally deny addiction and continue rolling.
After losing it all, some players described the experience they were having as a chemical rush- as if they had just taken a drug.
Even users who were invested and had made sizable profits from investing were not immune to the lure of the game. Several withdrew their invested bankroll just to "play around" and fell in the same inevitable fashion.