Background
SatoshiDice was initialy created by BitcoinTalk forum user FireDuck prior to the user selling the system to another operator. The website was announced on April 24, 2012 and within weeks of launch the website became responsible for more Bitcoin transasactions on the Internet than all other sues of Bitcoin combined. Beginning on August 20, 2012, SatoshiDice shares are publicly traded at MPEx under S.Dice symbol and investors receive monthly dividends.
System
The SatoshiDice Bitcoin game functions with zero confirmations which means during the time it takes for you to send a transaction and then ultimately receive your winnings is near instant. Bets within the SatoshiDice network are analyzed as soon as the broadcast is picked up by the client. The website owners say that this is safe because it will always build the accompanying answering transaction with the distinct output of your bet transaction. Further, this means a blockchain that does not include your bet cannot contain the website's answer.
Operation
Bets on SatoshiDice are placed by sending bitcoins to one of the addresses listed on the homepage in the bet options table. SatoshiDice takes in this information, quickly evaluates win or lose and instantaneously generates a return transaction. If you lose the SatoshiDice bet, the return your bet times 0.005 which will equal a number much lower than your bet. If you win at SatoshiDice, your bet is multiplied by the SatoshiDice prize multiplier and that prize amount is sent back to the address. With this structure, there is an answering transaction fro each and every bet and normally you will see that transaction in your specified client after a few seconds.
SatoshiDice differs greatly from traditional online gaming software because bets with SatoshiDice can be easily sent without access to the SatoshiDice website nor running any client software. As stated to play, a Bitcoin transaction si made to one of the numerous static addresses operated by the service, each static address having distinct and different payouts. The SatoshiDice service determines if the bet is a winner or a loser and immediately sends a transaction in response with the payout . The result is that the game spams the p2p network and blockchain with excessive useless data.
Odds
Each bet address has different and distinct odds and each gives the house of SatoshiDice an edge of 1.90%. This translates to payouts that are 98.1% when including the payout of the losing bets). The SatoshiDice website shows the full list of wager addresses and odds. In order to determine if a bet is a winner or loser the website utilizes a method to produce a distinct number between 0 and 65,535, very similar to how a common random number generator (RNG) would be used. The SatoshiDice service then uses a combination of the transaction hash from the bet transaction fromt eh blockchain and performs an expedient 512 bit SHA2 hash for that distinct trasaction hash using a secret unknown to the player. The first four distinct bytes of that ahs become the SatoshiDice lucky number in determining the winner or loser.
Conclusions
SatoshiDice is certainly an innovative approach to online bitcoin gambling. It's fast payouts and multiple batting options within the "Dice" format make it appealing. The limiting peace of SatoshiDice is that it does not deliver the many popular games most bettors like to take advantage of including sportsbook and traditional casino games. When I wager I like to at least feel like my knowledge will be a factor in my winning or losing that is why I play in the sportsbook or casino games like poker and blackjack. SatoshiDice can be fun and exciting but ultimately you will never consistently win as it is simply odds and not intelligence determining the outcome.
