s.dice prospectus full

8/22/2019 S.DICE Prospectus Full

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S.DICE (MPEx equity asset)

ProspectusAugust 19, 2012

Contact

Erik Voorhees, Operator

[email protected]

1.720.382.4326

GPG fingerprint: 91A1C2DC46AF4B744EF9E0250272EF6FD370840C


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Table of Contents

Executive Summary ....................................................................................................................... 4

Service Overview ........................................................................................................................... 7

New Website ................................................................................................................................. 9

Operational Costs ........................................................................................................................ 10

Marketing & Promotion Plan ....................................................................................................... 10

Discussion of Variance ................................................................................................................. 10

Summary ..................................................................................................................................... 11

Contact Information .................................................................................................................... 11


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Executive Summary

SatoshiDICE is the worlds most popular Bitcoin game and gambling site, by at least an order of

magnitude. Launched in mid-April 2012, the site has grown into a worldwide phenomenon and is

nearly universally known within the global Bitcoin community. To date, the site has processed over

608,000 BTC and earns over 78 BTC in avg. daily profits.

The website earns profits by holding a house edge of 1.9% on all bets placed. Daily profitability has

high variance (and some days lose money), but on average SatoshiDICE mathematically earns 1.9%

of the amount wagered at the site over the long term.

Based on betting volumes to date, and assuming no growth, SatoshiDICE is expected to earn 2,990

BTC per 30 days in profits1

IPOSatoshiDICE seeks to raise 33,278 BTC in an IPO in exchange for 10,000,000 (10%) of its 100,000,000

shares. This 33,278 BTC amount is based on a 8.79x P/E valuation assuming current earnings (not

assuming growth).2

Shares will pay dividends equal to 100% of SatoshiDICE net income on a monthly basis.

SatoshiDICE Contract Overview

Asset will include 10,000,000 shares, representing 10% of SatoshiDICEs 100,000,000 shares. Each share entitles the holder to 1/100,000,000 of net profits, which will be distributed as

dividends monthly.3 Net profits means all earnings minus marketing and hosting costs.

SatoshiDICE does not pay salaries to anyone.

IPO shares will be priced @ 0.0032 BTC. This is based on a 8.79x P/E ratio for SatoshiDICE,where yearly earnings are estimated at 36,386 BTC4.

If SatoshiDICE is sold or acquired by any party, shareholders will be compensated based onthe sale price in proportion to their shares (owning 1,000,000 shares entitles owner to 1% of

sale price).

1To date, SatoshiDICE has earned 2,346 BTC per 30 days. This is lower than the 2,990 BTC expectation because A) the

house edge was set lower during May, and June and B) expected statistical variance. This figure ignores the first week and

a half of operations (in April) when SatoshiDICE was in public testing and volumes were very small.

2The P/E ratio is only 4.72x if the past 30 days (as of Aug 24) are typical and the site doesn t grow further.

3Based on current profits, 1000 shares will earn .02735 BTC monthly (0.3281 BTC yearly) which is roughly a 10% annual

dividend yield at IPO prices.

4This assumes zero growth, and is based on avg. daily volume x house edge. Specifically, 365 x 5,246 BTC x 0.019 = 36,386


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Key Statistics5

Over half of all global Bitcoin transactions are SatoshiDICE. Over 1/3 of transactions thathave everoccurred on the Bitcoin network are SatoshiDICE. The majority of mining fees ever

paid are from SatoshiDICE.

5 out of the top 6 Bitcoin addresses are SatoshiDICE6 The site achieved 1,000,000 bets just four months after launch Averages over 9,200 bets totaling over 5,246 BTC daily Has generated over 78 BTC in average profits daily At historical average daily volumes, SatoshiDICE is expected to generate over 2,990 BTC per

month in profit

Volume of wagered BTC has not decreased even while BTC price has appreciated (volumehas actually increased)

Fully transparent: all earnings statistics, as well as dice rolls, are provably verifiable using theblockchain

5These statistics are based on all data from launch up through August 18

th, 2012

6http://blockchain.info/popular-addresses
http://blockchain.info/popular-addresseshttp://blockchain.info/popular-addresseshttp://blockchain.info/popular-addresses


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Growth Prospects

Assuming no growth, SatoshiDICE is expected to earn over 33,000 BTC yearly. This is based purely on

the volumes of bets witnessed thus far, multiplied by the house edge. However, growth in the

userbase and bet volume may be expected for a few reasons:

A brand new, feature-rich websitehas already been fully designed and will be launched by early-

September (described later in this document)

SatoshiDICE has been integrated natively

into Blockchain.infos ewallet and will be

included in an upcoming update to themobile app. Further partnerships will putSatoshiDice routinely in front of every Bitcoin

user.

10% of raised capital will be spent

on a high-profile print

marketing campaign inEuropean gaming publications.

These ads will simultaneously help

grow Bitcoin exposure to thetraditional gaming industry.


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Service Overview

SatoshiDICE has risen to prominence as the most well-known and successful Bitcoin game in the

world, by a wide margin.

The game is simple: players may send an amount of Bitcoins to one of the listed Bitcoin addresses.

Each address corresponds to different odds, where some have a high likelihood of payout but low

multiplier, and others have a low likelihood of payout but a high multiplier. The player can thus

choose the odds she prefers.

Once a bet is sent to the specified Bitcoin address, SatoshiDICE instantly receives it and calculates a

dice roll based on the specified odds. If the rolled number is lower than the targ et amount shown

on the bet, then the player wins. If the rolled number is higher, then the player loses. Losing bets

payout .005 x the bet, so a player will always receive a payout transaction. Winning bets aremultiplied by the prize multiplier (which can be up to 64,000x) and sent back immediately to the

player.

Odds and payouts are calculated such that SatoshiDICE has a 1.9% statistical house edge, which is

extremely low for any gambling service and which helps attract and keep players. The low house

edge is feasible because of the services extremely low overhead (it turns out that Bitcoin makes

gambling extremely efficient).

Transaction Fees

Players are expected to pay the mining fee of 0.0005 per bet, and SatoshiDICE pays this fee on the

payout transaction, and it is subtracted from the players prize. To date, over 500 BTC has been paid

just from SatoshiDICEs side in this way, making the site the singer largest supporter of Bitcoin

miners in the world.

Zero-Confirmation Delay

The SatoshiDice Bitcoin game operates with zero confirmations, meaning the time it takes for the

player to send a transaction and receive her winnings is near-instant. Bets are evaluated as soon as

the client picks up the broadcast. This is safe because it always builds the answering transaction with

the output of the bet transaction.

Min and Max Bets

Because there is a limited pool of funds to back bets, there is a max bet for each bet option. The max

changes periodically as bets are processed, adjusting for the current wallet balance. Min bets are

established at .001 per bet because anything lower makes the bet foolish for the player (as the small

miners fees would eat up any winnings).


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Financials

SatoshiDICE is highly profitable and all financials are verifiable using basic blockchain analysis. Below

are the performance statistics thus far. Note: Aprils figures are not included here, as the month was

primarily testing, and volumes were far lower than normal months.

You can view the official performance statistics updated periodically here:

https://docs.google.com/spreadsheet/ccc?key=0Aiec3-Eo_yO5dG5SQklHZG4wRm1GMW9DRWpMMW5UQkE&pli=1#gid=0

All-Time Stats Updated Aug 24

Days of Operation 116Bets 1,077,269

BTC Bet 608,632.59

BTC Payout 599,016.05

Fees Paid 542.62

Profit Total 9,073.93

Avg. Actual Profit per Day 78.22

Avg. Expected Profit per Day 99.69

Avg. BTC Bet per Day 5,246.83Avg. BTC per Bet 0.56

Avg. Actual Profit per 30 Days 2,346.71

Avg. Expected Profit per 30 Days 2,990.69

Volume over past 30 Days 297,474.93

Actual Profit over past 30 Days 6,506.96

Expected Profit over past 30 Days 5,652.02

Projected Yearly Profit (based on actual past performance) 28,551.58

Projected Yearly Profit (based on expected performance given statistical house edge) 36,386.78

Valuations

100% Stake should cost

Assuming 10x P/E 363,868

Updated P/E of IPO Price 8.79x

P/E of IPO Price based on past 30 days 4.72x

Dividend Yield based on past 30 days 21.20%
https://docs.google.com/spreadsheet/ccc?key=0Aiec3-Eo_yO5dG5SQklHZG4wRm1GMW9DRWpMMW5UQkE&pli=1#gid=0https://docs.google.com/spreadsheet/ccc?key=0Aiec3-Eo_yO5dG5SQklHZG4wRm1GMW9DRWpMMW5UQkE&pli=1#gid=0https://docs.google.com/spreadsheet/ccc?key=0Aiec3-Eo_yO5dG5SQklHZG4wRm1GMW9DRWpMMW5UQkE&pli=1#gid=0


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New Website

SatoshiDICE has a brand new, feature-rich website which has already been designed and is

currently under development. It will be live by early September.

This new site is far more professional and attractive, and includes live-updating charts anddata tables. The new site will feel alive as it visually indicates every bet placed and keeps

updating statistics of cumulative bets and payouts.

Shortly after launch of the new site, a feature will be added to enable very easy payouts to3rdaddresses (so that a bet doesnt have to be sent back to the sending address). This will

make the site far more flexible and appealing to players on various Bitcoin clients.

A full API will also be integrated by November, enabling creative new uses of the system.


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Operational Costs

SatoshiDICE runs on servers and security systems costing between $100-$250 per month.

Advertising expenses for SatoshiDICE have been in the $100-$300 range per month. However, after

the new site has been released, the advertising budget will be increased to between $500-$1,000per month (not including the planned European magazine campaign which will be separately funded

with a portion of the IPO proceeds).

These amounts are subtracted from revenues before calculating net profits. SatoshiDICE does not

pay salaries or compensation to any person and thus salaries will not be taken out of net profits.

Legal expenses have thus far been paid out of pocket by the operator, Erik Voorhees. If legal

expenses exceed $1,000 per month, the amount will be deducted from SatoshiDICEs net profits and

this will be described in the monthly Profit and Loss statements. There are currently no ongoing legal

expenses.

Web development expenses for the new website have been fully paid (there will not be upcoming

costs for this site). In the future, if other upgrade plans are implemented, these expenses will be

subtracted from net profits. There are currently no planned upgrades other than what has already

been paid for.

Marketing & Promotion Plan

The manner by which SatoshiDICE is marketed now and in the future is being kept confidential for

certain competitive reasons.

However, what can be shared is that SatoshiDICE will maintain strong visible presence throughout

the Bitcoin ecosystem. Further as mentioned, 10% of the raised funding from the IPO will be

dedicated to a high-profile print media advertising campaign in European publications. This is being

done to promote both SatoshiDICE and Bitcoin in general to the larger gaming/casino industry.

Discussion of Variance

For any potential investors of SatoshiDICE, it is important to discuss the variance factor. Because

SatoshiDICE runs on statistical probability, and because large bets are permitted and large payouts

may occur, the earnings of the website on any given day can and do swing wildly in both directions.

There have been periods of several days where SatoshiDICE lost a few hundred bitcoins per day, and

single days have seen losses of nearly 1,000 BTC. These substantial losses are of course countered by

similar positive swings, however investors must understand that the site doesnt make calm,

consistent revenue. Day to day and week to week variance is very high.


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There is no guarantee that any given month will be profitable. Yet, long term, SatoshiDICE is

statistically programmed to earn 1.9% of the amount wagered and various statistical optimizations

have been carried out to ensure variance is manageable.

It is also important to note that net profit is calculated as a running total. Thus if Month A has a loss

of 500 BTC, and Month B has a profit of 1200 BTC, the net profit for Month B will be 700 BTC andthis is the amount which would be paid to shareholders as dividends.

Summary

SatoshiDICE has proven its performance and appeal (earning substantial profits along the way), but

more importantly, SatoshiDICE has proven the awesome power of Bitcoin for global online gambling.

Its beauty is in its simplicity, its convenience, and its verifiability.

The numbers speak for themselves. Growth continues, and each month has been better than the

last. This IPO is a chance for interested parties to acquire shares in SatoshiDICE at around a 8.79x P/E

ratio, which is unheard of for companies with such massive growth prospects, especially given that

shares pay 100% of SatoshiDICE net profits to shareholders. As Bitcoin expands around the world,

SatoshiDICE will grow with it, becoming a case study in the brilliant opportunities afforded by the

worlds most profound money and payment system.

Please do your own due diligence, and realize this opportunity has significant risk of loss. No

guarantees are made on revenues, dividends, or returns of any kind. Your investment equity value

may fall to zero, and investors should not invest money which they cannot afford to lose. An

investment in SatoshiDICE is only appropriate for those seeking a high risk/high reward investment

profile.

Contact Information

Please direct all correspondence to:

Erik Voorhees, Operator

Skype ID evoorheesPhone 1.720.382.4326 (US)

Email [email protected]

GPG fingerprint 91A1C2DC46AF4B744EF9E0250272EF6FD370840C

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