With the crypto dice investment model investors contribute funds to a site’s house bank that the players bet against with the odds in the house’s favor. If the house wins investors win! Here is a detailed explanation.
While this sounds great it gives the site operator the incentive and opportunity to scam investors in a number of ways.
The most simple and common crypto dice investment scam is where the operator shuts down the site and takes all investors and players balances.
This can happen on any site that holds customer balances but the presents of the house bank makes it more profitable, and therefore more common, on crypto dice sites. The incentives are perverse as doing a runner with a large house bank gives the operator more money in 1 day than they would make running the site honestly for a number of years.
I invested 1000 m฿ in 9 dice sites for the purpose of tracking and comparing the returns on this table. In the first 6 months 3 of the sites, that is 33%, pulled an exit scam. My 3000 m฿ are gone forever and statists calling for licensing and regulations in the name of consumer protection have 3 more examples to point to.
Investors receive a % of the sites profit, therefore all an operator has to do to underpay investors is under report site profit. Then they can keep the difference for themselves. There are a number of sneaky and dishonest ways site operators can do this undetectably.
A site could exclude some profitable bets from the site profit figure or a site could make a fake player account and use knowledge of the secret seed that determines bet results to win with that fake account. This would result in a loss to the house bank which would only be a loss for the investors.
These scams could be done continuously on an ongoing basis. If the operator did this to make a site that would have a 1% profit have a 0.8% profit people would just assume the site has been slightly unlucky.
The only way to ensure you will not be the victim of a crypto dice investment scam is to not invest in crypto dice sites. That is my advice for now as the ecosystem is mostly comprised of scammers, amateurs and the B team.
The best crypto gambling operators are not so desperate for liquidity that they would give 90% of their site’s profit to investors. However I have had just as bad results investing in altcoins and crypto start-ups.
If you can’t resist choose where to invest carefully and spread your investments out over a number of the more trustworthy sites. You can try to ascertain which sites these are by checking their Bitcoin Talk Forum threads and searching their name for mentions on the bitcoin sub-reddit. See how long they have been operating without scandal and see how they performed on our investment comparison table.
There must be a way to make a crypto dice site trustless with multisig transaction, smart contracts, open source code et cetera, but no one has done it yet. When someone does I will certainly consider investing as I do love how the model opens up the privileged position of being the house to anybody.