Friday, December 16, 2016

Gambling chips

Coingecko: In quiet corners of the internet, where mainstream finance dare not tread, a trend is emerging: the ICO (Initial Coin Offering).
This is an emergent term, with no formally recognised definition as yet. Though an ICO is coming to mean any venture, platform, enterprise or endeavour that issues a specific token for a specific purpose.
The token could have its own underlying chain, as was the case with Ethereum. Increasingly however, tokens are meta and issued on an existing blockchain infrastructure.
Many projects are choosing Ethereum as that infrastructure.
With its complete scripting, Ethereum is the perfect platform for ICOs. Complex relationships, logic, contingencies and outcomes are all at the developer’s fingertips

Vegas has been issuing money since forever, and the various chips trade, they usually can be exchanged across casinos.  Vegas has gambling pits, and hey got a cycle price, the ante, or the double zero.  But they don;t compress bets, instead they give chips away then float customers back and sell them entertainment.

What does it take to set up a betting pit? Went through this with the numbers, The boss pays off according to the conditional probability of your bet against the number that came in. Betting against a NGDP announcement yields a distribution of 'estimates' We expect winner to form bell shaped distribution about the final number, wild guess would be anti symmetric and saddle shaped distributions,.  Betters must have figured out the best algorithms for paying off by probability, I haven't.

But, making the pit is easy, just pay the python team their $1,000 license and its all:
import trading pit, and standard issue coin.

The pit organizes the bets the same, a nested probability graph.  Betters can scan the graph, then bet. Or, the last verion of the graph is posted.  So, better who see the current estimates, and have inside information, would pile on the bets at the speculated position.  As time progressed, the NGDP numbers become firm, and the data collectors make increasingly accurate bets. The pit boss rules can be written to close the bets when the center estimate peaks beyng a limit, the boss can specify a mean to varianc limit at the start.

Hence, anytime some part of the economy bulges with something interesting, spawn a pit and quantize the flow.

1 comment:

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