Not Just Dice

THE STORY OF THE OPEN SOURCE DEVELOPER WHO MADE JUST DICE.

A software developer, with the nickname dooglus, got his start checking in fixes for an open source bitcoin exchange used on a UK based site. He has checked in over 1000 fixes as of today, and the project morphed as an open source project called Intersango. Dooglus’ reputation for crucial fixes caught the eyes of an Australian entrepreneur wanting to start a larger exchange.

WORLD BANK EXCHANGE

“I was approached by an Australian guy to help him take the open source intersango exchange code and tailor it to his needs,” said dooglus.

The new exchange would be called the World Bitcoin Exchange and the Australian gentleman, named Andre Jensen, would manage the Aussie dollars. Dooglus would be in charge of the Bitcoins, but handling thousands of dollars worth of cryptocurrency would be quite the challenge. Keeping all those Bitcoins required a rigorous theft deterring process.

He employed a very rough method of what is currently called cold storage. Software exists, like Armory, that offers similar features, but he chose to write his own scripts to copy coins from Bitcoin wallets on computers connected to the Internet to cold storage.

“I’m using the ‘raw transactions’ interface of bitcoind to create and sign transactions from the cold wallet. People tend to panic when you say ‘raw transactions,’ since it’s easy to mess things up and accidentally pay a huge transaction fee to the miners, but I have the process scripted now so that such mistakes don’t happen,” said dooglus as he proceeds to explain his cold storage process.

“When dealing with large quantities of bitcoin, it makes sense to keep the majority of them somewhere where they can’t be stolen. I use a wallet on a laptop that is never online to hold the majority of the bitcoins I control, and physically walk a USB memory stick to and from it when I need to access the coins it holds.”

While dooglus perfected a method to keep World Bitcoin Exchanges Bitcoin funds untouchable, the bank account in which Andre Jensen held the fiat currency was frozen. He posted this announcement on bitcointalk forums:

“We would like to apologize to all our clients for the lack of customer support provided over the past weeks, as of 14th February we have been faced with another banking institution issue, which includes the following; We’ve had an account suspension issue with our Commonwealth processing account and are unable to execute EFT AUD withdrawals while the account is suspended. We will leave the exchange in its ‘frozen’ state until we are able to re-commence operations.”

Tens of thousands of dollars were held up, which presented the World Bitcoin Exchange (WBX) with a complication their business couldn’t control. The exchange eventually shut down its operations.

Well those funds were not entirely lost. Dooglus still held part of WBX’s funds as Bitcoins — 1300 Bitcoins to be exact — in cold storage. He worked on contacting each customer to see if they wanted their funds back. However, the longer he waited the more Bitcoin’s value rose.

The fund’s value rose enough to cover all fiat losses from the bank seizure.

“…They’ll be paid out 100% of the outstanding balance on June 1st, subject to new claims arriving in the next couple of days… I don’t foresee any problems with making the payouts,” said dooglus on May 30th, 2013.

“We appreciate all of your hard work. Thanks Dooglus!” replied a user mOomOo from bitcointalk.org.

Dooglus’ reputation in the Bitcoin community went from entrepreneur to savior as he helped WBX’s former customers get their funds back. Some users were so pleased with dooglus thorough his handling of this catastrophe that they let him keep 10% of their refunds as a tip.

It was on this reputation that he started his next venture.

JUST DICE

Dooglus always fancied probability problems and programming. His programming experience stemmed from the open source fixes he submitted to the Bitcoin trading engine used by WBX, and he wanted to take it a step further after seeing sites like SatoshiDice.com and BitZino.com attract the lion’s share of bitcoin gamblers through simple and catchy interfaces.

His concept was to create a gambling platform that was nimble, provably fair, and allowed investors to join in on the fun.

“I’ve been interested in math since I was a boy. It was my favourite subject at school. I guess that led into an interest in computers and gambling. More the theory of gambling; probabilities, statistics, strategies, etc. rather than really gambling much myself,” says dooglus. “I heard about Bitcoin maybe 3 years ago, months before it first hit dollar parity, and as Bitcoin gambling sites started appearing, I followed them with interest.“

He found Satoshi Dice was brilliant for its use of bitcoin wallet addresses, but wanted to improve in its speed. He also didn’t want a one-dimensional game where people gamble, win/lose then walk away. He preferred the options to gamble, chat, or front funds and watch them fuel the house’s purse.

Having investors had a very valuable side benefit: those who invested ended up supporting new users on the JD chat, since a knowledgeable supportive community fuels plays, increasing the investors’ return.

TRAVAILS OF RUNNING A COMPANY

One day, during a meticulous cold storage retrieval, dooglus forgot to deduct a large sum of Bitcoins from a user’s wallet after crediting his account. The user claimed someone jumped on his laptop, gambled the 1300 BTC away from his account and lost.

Dooglus was somewhat stunned and turned to the Bitcoin community for help. They proved it was an accounting error, and it was fixed hours later.

Another attempt to hack JustDice was from a teenager who threatened to release a DDOS attack on the JustDice server. The fledgling hacker gave dooglus a demo of the attack, which failed. Dooglus sent him a youtube video of another failed DDOS attack in jest, and the hacker replied, “Can’t click it now. Parents are sleeping.”

TO PLAY OR TO INVEST

The concept of allowing users to play on the side of the house and put up their Bitcoins to earn from the players’ losses sounded attractive enough so I considered trying it myself. Surprisingly, Dooglus cautioned against this.

“Good luck with that,” said dooglus. I was a bit confused since minutes earlier he sent me this chart showing the investors’ bitcoin wallet address and a chart showing its growth over time.

Bitcoin address link

Dooglus was tracking all plays from a mysterious dashboard visible only to him.

14:08:36 *** lucky (64957) [#111612792] bet 9 BTC at 95% and lost **

“’lucky’ was attempting to make a small gain by risking 9 BTC at a 95% chance of success — and got unlucky,” said dooglus just as another player seemed to follow in user lucky’s footsteps.

11:48:09 *** Alexis (108959) [#111432098] bet 3.2 BTC at 49.5% and lost *** 11:48:10 *** Alexis (108959) [#111432121] bet 6.4 BTC at 49.5% and lost *** 11:48:11 *** Alexis (108959) [#111432157] bet 12.8 BTC at 49.5% and lost *** 11:51:23 *** Alexis (108959) [#111434528] bet 25.6 BTC at 49.5% and won 25.6 BTC ***

Dooglus rerouted the logs of wins and losses and piped them to the JustDice chat room. This allows the community to give feedback on active games.

11:51:32 (1470) <KLYE> Damn alexis 11:51:44 (108959) <Alexis> ;)

Even though there are players like Alexis are occasionally putting up positive numbers, investors continue to line up for the novelty of being part of the house.