Funfair – A Game Changer that plays an advantageous handJanuary 14, 2018
It’s part of everyone’s (pre)history
Image Source: Astragalomancy – Wikipedia
Gambling is one of the oldest pillars of human society. Despite what you might want to reassure yourself about your humanity; morality and ethical issues with risk taking and gambling, gambling itself dates back to at-least the Paleolithic period, before written history. In 3000 BC, Mesopotamian’s were playing 6 sided dice games, and these were reportedly based on astragali dating back thousands of years earlier. In China, gambling houses were widespread in the first millennium BC where betting on fighting animals was common. Lotto games and dominoes (precursors of Pai Gow) appeared in China as early as the 10th century. Within a century or so, playing cards appeared in the ninth century in China. Poker, arguably the most popular U.S. card game associated with gambling, actually finds its roots in a Persian game As-Nas, dating back to the 17th century. Ridotto, Venice was the first Casino in Italy in 1638.
Psychologically there are a number of biases, cognitive and motivational that influence or outright distort the motives of gamblers as well as their perceived odds of events. It is widely understood that the brain chemicals released during gambling are the same as pleasure reward drugs, sex, and so on. Some of my research led me to understand that it is the lead up to the event of winning that provides the biggest hit of these chemicals, not explicitly winning itself. I had a friend who was compulsively moving from relationship to relationship in university and would often sarcastically make the comment that they could never settle down, and often got bored. “The chase is better than the kill” – they would lament. Not ironically, this is the same for a gambler. In-fact, the cognitive apparatus goes further, the belief that some chance is better than 0 (arguably infinitely), and that not taking risk is in itself, taking risk.
Other psychological crutches include a preferences for likely outcomes. People tend to bet on favorites, though they will bet on underdogs if the reward appears high enough. This compliments brain chemistry and risk to reward dopamine release. People typically do not vote against their favourite sports team or fighter, and there is a significant optimism and desirability bias that is displayed here. They will for example, bet on their favourite team, even if the underdog. There is a reluctance to hedge, and you often here this in speculation on the crypto market. “I’m going all in on X”. Hedging creates an interdependence dilemma, and is a form of cognitive dissonance as it provides a conflict between short-term monetary gain and long-term benefits. It could be related to K versus R selection, which I outlined briefly in my article Is it true that the house always wins? Why I’m bullish about Ripple and XRP. Unironically, this position is also precipitated to a loyalty to a position, ideology, outcome or group. How often do you see people refuse to hedge on XRP, despite it’s very strong fundamentals, due to loyalty to “fuck the banks”? Hedging can also signal to others a lack of commitment, and result is ostracism. This is antithetical to most fundamental human desires of group dynamics, group harmony and so on. It is very difficult to fight. Gamblers prefer gambles that are drawn from large samples, this is called Ratio Bias. Finally, the gamblers fallacy, positive recency bias also affects cognitive decision making. Explained shortly, this is the incorrect position that if something happens more frequently than normal during some period, it will happen less frequently in the future. Conversely, if something happens less frequently than normal during some period, it will happen more frequently in the future (presumably as a means of balancing nature).
Genetics, Hormones and Biology
As far as human history goes, men have been more disposable than women. In terms of genetic procreation, biology and hormones, humanity has been geared to enable men to take far more risks; while as women will opt for security. Put very colloquially, eggs are more valuable.
Image sourced from: www.regions.com
This is an incredible sensitive topic for some, so I am choosing my words carefully. The underlying premise for this is that you look through humanities history, there are far more women than men. Right up until modern times, the fact was that most women procreated and most men did not.
Why is this important to understand? Because there are many in the scientific community inferring that the underlying testosterone is probably what is causing this. While it is a sweeping generalisation; we know that women also gamble and there will always be outliers to the rules, it makes for a good snapshot of understanding the biological and hormonal underpinnings of driving high volumes of (likely, mostly) men to the propensity of accepting risk (perhaps even seeking it).
Have I painted a clear picture here? People gamble. People have gambled since pre-history. If your cave dwelling ancestors left the safety of the cave to return with food for the children – that was a risk, either forced or calculated. The hormone testosterone has links to predisposing people to risk acceptance, and psychological and confirmation bias justifies this in their brain. The brain is always looking to put a logical framework around your underlying reptilian architecture and motives and this makes sense to me.
Online Gambling Statistics
- “Pathological Gambling” was officially recognized as a clinical disorder in 1980 when it was first included in the DSM-III.
- Although most people are able to gamble responsibly, it is estimated that 3% of the population struggles with pathological gambling.
- The first online casino launched in August of 1996 (InterCasino, based in Antigua). Eighteen games were available at the time. There are now thousands of internet gambling websites and new online gambling businesses appear every day.
- Most online gambling websites are not affiliated with land-based casinos. This is widely thought to be because traditional casinos did not want to get involved with a business model that would take away from traditional sources of revenue. This policy appears to be changing as traditional casinos are now developing their own online gambling websites.
- There are no official product safety standards and regulations for online casinos. Players who choose to wager at online gambling websites essentially do so at their own risk.
- Playing on “free” internet gambling websites is a common activity for teenagers and young adults.
- Research suggests that young males are most likely to engage in online gambling.
- The first internet Bingo site went online in 1998.
- The first online poker site (PlanetPoker) also started in 1998.
- The number of online poker websites dramatically increased in 2003 when the World Series of Poker became a popular television program.
- Total revenues from online casinos are difficult to pinpoint but have been estimated at $12 billion in 2005 and 15.2 billion in 2006. In 2010, revenues were 29.3 billion.
- One in five online gamblers may be pathological gamblers
- Approximately 4% of teenagers have a gambling problem.
- 7 reasons why online gambling is popular
To clearly understand the numbers, you have to look at the big picture. For example a research team from from Washington University at St. Louis did a study in 2005 and their best estimate came to a total of 1.6 billion people gambling at some point during a given year, with over 4.2 billion having gambled at some point in their lives. This historical data is now 12 years old, and would be dwarfed by current stats which you consider Web2.0 and the proliferation of internet based gaming. Some countries have gambling heavily restricted or outright banned, but others are much more tolerant to the idea.
In such countries, like Australia, some estimates see per capita spending of around $1,200 per year. A 2010 study showed that Singapore (which has two very new and successful casinos) was close behind Australia. Nations like Ireland, Canada and Italy all spending under $600 per adult per year on betting. The UK and USA are also heavily prominent in such stats, with 75-85% of adults saying they have gambled at some point in their life, with 80% of those saying they had done so in the last year.
Online gambling is still considerably new, with regulations and compliance enforcement varying from place to place. Reporting is also non-standardised in many respects and as such it’s difficult to do concise reporting. There are a few “take aways” from what is known. Online gambling research conducted in 2012 by SuperData Research found that online gambling is favoured by females (though that includes ‘fake money’ play) and 40% of gamblers were considered young adults, from 21-34.
Based in Singapore, FunFair raised a reported $26 million in 4 hours during it’s original token sale, showing a very keen interest in it’s burgeoning platform. It aims to use blockchain to simplify initial outlay and drop costs, for anyone to re-brand their white label products and run their own casino. The platform is being touted as being transparent, fair, and protect players. At this point in time, it is operating via Ethereum blockchain technology, combined with FunFair’s own Fate Channels and Fun tokens.
Update: Thanks to reddit user: areaka
Their Singapore office (FunFair Private Limited) issued the token presale because of the country’s blockchain-friendly jurisidiction. It’s now soley a holding company and investment vehicle. The actual development occurs in the UK.
I was halfway through my “enlightment” reply to OP as well before I looked it up haha
As more and more operators choose adopt FunFair’s technology, more marketing initiatives and advertising for FunFair-powered casinos will happen, thus bringing attention to FunFair and the services that they provide. This is known as network effect.
“A network effect (also called network externality or demand-side economies of scale) is the positive effect described in economics and business that an additional user of a good or service has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.”
As noted earlier, online gambling is a large market. But it must be understood that is incorrect to peg the price of the FUN Token against the market cap of online gambling. FUN is not a measure of casino capital/wealth.
The biggest problem that FunFair addresses is trust. When you play online, you need to trust the casino to be fair and secure. Do you know that the online casino is giving you the same odds that you would get in a regular casino? Where is the online casino operating from? Is that country regulating those businesses? Are they scrutinising them to audits and compliance? FunFair puts the gambling on the blockchain so it’s trustless – It’s fair.
Like other cryptocurrencies, value is derived from utility. The more operators that use FunFair’s platform to power their own casinos, the more the value of the token will increase. FunFair is adopting a very smart adoption strategy. Rather than go for the larger casino’s, they are planning on capturing the small and niche casinos first; which is ideal as it’s usually the smaller players who are more malleable, able to adopt new technology and so on. As they capture a significant portion of this market, it will reinforce a strong portfolio when it comes to negotiating with the larger casinos. Likewise, early adoption issues will have likely been ironed out; and a successful operational track record can be shown.
How does the token (FUN) derive value?
FunFair does not issue dividends or offer profit sharing – FunFair doesn’t have much to share. The technology will be licensed to casino operators for almost nothing – itself a major draw for existing casino operators to adopt the FunFair platform. With a fixed supply, the value in FUN is derived from scarcity of the token in the marketplace. Scarcity comes from four sources:
- Casinos holding FUN as part of their bankroll;
- Players holding FUN and not cashing it out immediately after they play;
- Speculators (investors) holding FUN anticipating it will increase in value;
- Token burn: a small amount of FUN will be slowly destroyed over time. The exact amount has not been announced, though it will likely be quite small.
That first scarcity factor will be key, as casinos will need extremely large bankrolls of FUN to operate a large casino with multiple games, high max bets, and a large number of seats (allowing numerous people to play concurrently).
Right now, price has been set purely by speculators. As casinos open down the road, scarcity will ramp up — Casinos will need to buy FUN, which will lead to players buying FUN which will lead to greater popularity of the platform causing more speculators/investors to buy FUN. Scarcity and utility are what drives price.
Taken From a Must Read Reddit Post: FunFair – A Game Changer for 2018. An in-depth analysis.
Jez San is a British technology entrepreneur and investor whose pioneering work in the field of real time 3D computer graphics led to being awarded the OBE for services to the computer games industry.
Jez founded Argonaut Software in his teens and designed the first chip used to power 3D games including multi-million-selling Star Fox, Harry Potter and Croc. He also founded 3D online poker room PKR and microprocessor developer Arc International.
Since 2013 Jez has been an active investor in the blockchain and cryptocurrency sector. His investments include Google’s DeepMind, online cryptocurrency exchange Kraken and Bitcoin payment provider BitPay.
From the FunFair Commercial Whitepaper
FunFair presents its casino operators and players with a gaming opportunity never seen before:
Fast & Fair – FunFair games are fast, smooth and operate with highly transparent, smart contracts on the Ethereum blockchain without centralized servers. Players see results in near real-time that are fully auditable and provably fair, as well as seeing all their games and that of others to verify the outcome’s fairness and to confirm whether they should have been paid.
Fun and Safe – FunFair games smooth 3D graphics that people expect. The games require no deposit or withdrawal. Players retain full control over their funds at all times. It ensures that the players at any point of time won’t be locked out of the platform, losing access to their funds in the process. nFair games require no download or sign up. Players can start playing immediately by just clicking on the link.
Low Cost – FunFair Fate Channels is known to handle transactions efficiently while charging a negligible transaction fee to its players. Players only pay at the beginning and end of each session – not for each hand or roll of the dice like most other games. As a result, players receive the biggest profits without delays or withdrawal fees – even during long sessions that most players desire. The risk of charge back for casinos is also removed.
FunFair is pursuing a full suite of traditional casino games. As it stands today, the games available are:
- Slot machines (various types)
- Let It Ride
- Caribbean Stud
- 5-card Poker
- 3-card Poker
- More to come
You can try all these games right now at https://showcase.funfair.io/
Firstly, a huge shout out to the great community on https://www.reddit.com/r/FunfairTech, which made data collection a lot easier for me and provided some great insights and interpretations to this space. Worth noting is that the FunFair team seem very active on reddit, and will engage anyone who asks a good question about their platform and strategy.
Gambling is something that in my mind is hitting too many core buttons of the very nature of the human condition. Risk taking and reward is arguably one of the reasons why were are even here, as our early ancestors had to take risks just to survive. It’s built into all of us. All arguments to the contrary aside, whether we like it or not, just like fast food, this platform addresses and takes advantage of a key human niche and desire.
- Is the project and the currency compliant with the future of regulation and compliance as I believe it will exist.
- FunFair, due to the way the platform works; actually bypasses KYC/AML in many respects. The team would be able to handle regulatory and compliance requirements due to their demonstrated industry experience.
- Is the project backed by a significant team, with credentials and experience that is searchable.
- Absolutely. https://funfair.io/explore/team/
- Is the project already operating, and has tangible products.
- Yes and you can test them here: https://showcase.funfair.io
- Is the project addressing a business requirement in the market today and Is the project addressing a specific niche and use case scenario.
- Is the project scalable and able to handle significant transaction counts.
- I would feel more comfortable if FunFair moved off Ethereum (due to the cats, for example).
- Is the project resilient to change over time and able to be updated without issue.
- The impression I get is that they have sufficient technical resource and capital to facilitate this without issue.
- Is the project resistant to impact from Green Policy, Eco-Terrorism and other changes in the Energy Space.
- Considering how much energy a traditional casino uses, FunFair is largely impervious to this. Again to point 5. this could be bolstered if they moved onto their own blockchain.
How can I get FUN?
This article is my opinion; is editorialised and does not constitute financial advice. If you have conducted your own research, due diligence, and want to buy FUN; you can get it at many places including:
Additional Reading & Research
- Website: https://funfair.io/
- White papers: https://funfair.io/white-papers-languages/
- Blog: https://funfair.io/blog/
- Roadmap: https://funfair.io/roadmap/
- Team: https://funfair.io/team/
- Funfair Telegram group: https://t.me/FunFairTech
- FunFair Discord group: https://discordapp.com/invite/rwETqSP
- Funfair Official Bitcointalk Forum Thread: https://bitcointalk.org/index.php?topic=1968383.0
- Twitter: https://twitter.com/FunFairTech
- Reddit: https://www.reddit.com/r/FunfairTech
- Facebook: https://www.facebook.com/groups/148397155706069/
- Coinmarketcap: https://coinmarketcap.com/assets/funfair/
- Ethplorer: https://ethplorer.io/address/0xbbb1bd2d741f05e144e6c4517676a15554fd4b8d
- Jim Duffy: Be prepared for a ride with FunFair cryptocurrency
- Wikipedia – Gamblers Fallacy
- Wikipedia – Gambling
- Key facts: Gambling in Australia – 2011
- Gambling Stats around the world
- Take Too Much Risk? Must Be The Testosterone…Or Not: Testosterone, Financial Decisions, and Risk
- Putting Ideas in Science to the Test – The Missing Men in Your Family Tree
- Why men take risks while women are more cautious
- Men Take More ‘Idiotic Risks,’ Study Finds
- Gender Differences in Risk Assessment: Why do Women Take Fewer Risks than Men?
- Men ‘twice as likely to take risks’
- Latest statistics on Australian gambling show greater losses on sports betting and pokies
- How Testosterone Affects Risk-Taking in Adolescent Boys and Girls
- Wikipedia – Astragalomancy
- The History of Gambling
- Testosterone and Economic Risk Taking: A Review
- How testosterone affects risk taking behaviour
- Datasets and statistics – Australian Government – Gambling
- Wikipedia – Network Effect
- Singapore’s Funfair Technologies token presale raises $26m from global VCs
- FUNFAIR TECHNOLOGIES Stand: N7-212 – ICE Gaming
- FunFair Announces Token Creation Event on June 22 for World’s Fastest Blockchain Casino Platform