Bitcoin Investing

Investing your Bitcoin on gambling platforms

Bitcoin is a form of virtual currency that has taken the world by storm in the less than 10 years of its existence. Bitcoin is truly a currency for the people and by the people as it is not regulated by any central banking authority, any country, or any other third-party entity. A Bitcoin can either be “mined,” bought, traded, or stored in a wallet just like any other currency. It is the advent of Bitcoin that has also brought about the lucrative world of online Bitcoin gambling.

The basics of Bitcoin gambling

Bitcoin gambling is a rapidly growing business that has online gamblers always coming back for more. There are Bitcoin gamblers making serious money over the internet; the numbers are staggering to say the least! Consider this: over US $1 million is wagered everyday across the various Bitcoin casinos that have mushroomed over the years. The reason these casinos are thriving is because there are investors in Bitcoin gambling who are making an average profit of $10,000 in a single day. This amounts to $70,000 in a week and $3,650,000 annually! Now those numbers are definitely worthy of attention! Before we get into the details of Bitcoin gambling and how you can profit from it, here are some terms you need to familiarize yourself with:
Bankroll - This is the size of the casino’s bank. The bankroll is the number of Bitcoins that is available for the gamblers to try to win.
House edge - This is the advantage (in percentage terms) that a casino has over the players. In popular casinos, the house edge can range from 1-2.0%. House edge can be thought of as the cost of the bet.
Variance - This is a mechanism behind the gambling. Variance is a measure of the high and low behavior of gambling. A larger difference between the high and low yields a larger variance. Negative variance means there are a greater number of winners or that the house is losing and positive variance means that there are a greater number of losers or that the house is winning.

Bitcoin investing
Investing in casinos

Negative variance means there are a greater number of winners or that the house is losing and positive variance means that there are a greater number of losers or that the house is winning.
EV - This is what really matters when it comes to investing in Bitcoin gambling websites. EV stands for expected value and is a metric for how much the casino is expected to make based on its past track record.

How do Bitcoin gambling websites operate?

Most Bitcoin gambling websites have rewarding business models where anyone willing to invest can do so without any barrier or restriction. Investors can also invest as little are as much as they desire. As an investor, you have the choice to invest a fraction of or your entire balance in the bankroll of the casino, or the house bank as it is often called. A Bitcoin gambling website can have any number of investors. Of all the profits that come in (positive variance), the house typically takes 20-30% of the profit and distributes the remaining 70-80% among the investors. What this effectively means is that every time a player incurs a loss, your investments go up! Although investments in Bitcoin gambling sites are not free of risk, the transparency of the investment is difficult to argue. The great thing about Bitcoin is that there is no single person or authority controlling any aspect of it. All Bitcoin gambling websites work on the principle of provable fairness where the irrefutable randomness is clearly presented and it is impossible to cheat the players or the investors.

The risks of investing in Bitcoin gambling websites

Investing in online Bitcoin casinos can be safe as long as the gambling website or casino has their math in order and has taken adequate steps to secure its transactions. First and foremost, online Casinos must secure their bankrolls in order to protect against the inevitable malicious user looking to steal site funds. The other important thing to be aware about when considering investment is the Casino’s bankroll management. The most important term related to bankroll management is “risk of ruin”. Casino operators must be well aware of this concept. Risk of ruin is the metric to capture the likelihood of losing the entire bankroll. To mitigate this risk a casino operator must seek to set the risk of ruin to virtually zero. Lowering the risk of ruin is done by limiting the maximum a player can profit in a single bet to a fraction of the bankroll. Most well-known bitcoin gambling websites like to keep their risk of ruin below 1%. When you are looking at a Bitcoin gambling website both from the perspective of an investor and as a player, you should keep your eyes open for the poorly funded casinos or gambling websites that are offering maximum bets all the time. Such websites have the highest chances of going belly up. Lastly, it is important to know that Bitcoin is still an enigma to regulators across the globe making Bitcoin gambling websites outside the purview of law. This means these casinos do not have any obligatory gaming licenses. So, the chances of raids, seizures, or even complete closure cannot be ruled out, in which case you would lose your entire investment! However, if you are a Bitcoin expert, and are well aware of the risk factors you can very well go ahead and make a nice profit while the sun still shines!