Understanding gambling behaviour and risk attitudes using cryptocurrency-based casino blockchain data

Meng, Jonathan; Fu, Feng

doi:10.1098/rsos.201446

Cited by 19 publications

(10 citation statements)

References 15 publications

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“…A third difference is that the crypto market is much more volatile. Prices for single coins can increase over 100% percent in a matter of hours and then drop back down again soon after (Meng & Fu, 2020). Even Bitcoin, the dominant coin, can vary substantially in price (e.g., in February 2021 it lost 20% of its value in 2 days) (Dahham & Ibrahim, 2020).…”

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confidence: 99%

The psychology of cryptocurrency trading: Risk and protective factors

Delfabbro

King

Williams

2021

JBA

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Background and aimsCrypto-currency trading is a rapidly growing form of behaviour characterised by investing in highly volatile digital assets based largely on blockchain technology. In this paper, we review the particular structural characteristics of this activity and its potential to give rise to excessive or harmful behaviour including over-spending and compulsive checking. We note that there are some similarities between online sports betting and day trading, but also several important differences. These include the continuous 24-hour availability of trading, the global nature of the market, and the strong role of social media, social influence and non-balance sheet related events as determinants of price movements.MethodsWe review the specific psychological mechanisms that we propose to be particular risk factors for excessive crypto trading, including: over-estimations of the role of knowledge or skill, the fear of missing out (FOMO), preoccupation, and anticipated regret. The paper examines potential protective and educational strategies that might be used to prevent harm to inexperienced investors when this new activity expands to attract a greater percentage of retail or community investors.Discussion and conclusionsThe paper suggests the need for more specific research into the psychological effects of regular trading, individual differences and the nature of decision-making that protects people from harm, while allowing them to benefit from developments in blockchain technology and crypto-currency.

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confidence: 99%

The psychology of cryptocurrency trading: Risk and protective factors

Delfabbro

King

Williams

2021

JBA

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“…Ethereum [37] is currently the largest smart contract system that is Turing-complete, i.e., allows encoding of arbitrary smart-contract functionality. Ethereum smart contracts have been used or proposed for a range of complex transaction types, including shareholder voting [27], stakeholder-owned investment funds and vehicles [9,13], fair exchange protocols for goods [39], complex key management solutions [38], video games [21], virtual casinos [29], and more.…”

Section: Appendix a Smart Contracts Backgroundmentioning

confidence: 99%

Flash Boys 2.0: Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability

Daian

Goldfeder

Kell

et al. 2020

2020 IEEE Symposium on Security and Privacy (SP)

251

155

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Blockchains, and specifically smart contracts, have promised to create fair and transparent trading ecosystems.Unfortunately, we show that this promise has not been met. We document and quantify the widespread and rising deployment of arbitrage bots in blockchain systems, specifically in decentralized exchanges (or "DEXes"). Like high-frequency traders on Wall Street, these bots exploit inefficiencies in DEXes, paying high transaction fees and optimizing network latency to frontrun, i.e., anticipate and exploit, ordinary users' DEX trades.We study the breadth of DEX arbitrage bots in a subset of transactions that yield quantifiable revenue to these bots. We also study bots' profit-making strategies, with a focus on blockchainspecific elements. We observe bots engage in what we call priority gas auctions (PGAs), competitively bidding up transaction fees in order to obtain priority ordering, i.e., early block position and execution, for their transactions. PGAs present an interesting and complex new continuous-time, partial-information, gametheoretic model that we formalize and study. We release an interactive web portal, frontrun.me, to provide the community with real-time data on PGAs.We additionally show that high fees paid for priority transaction ordering poses a systemic risk to consensus-layer security. We explain that such fees are just one form of a general phenomenon in DEXes and beyond-what we call miner extractable value (MEV)-that poses concrete, measurable, consensus-layer security risks. We show empirically that MEV poses a realistic threat to Ethereum today.Our work highlights the large, complex risks created by transaction-ordering dependencies in smart contracts and the ways in which traditional forms of financial-market exploitation are adapting to and penetrating blockchain economies.1 "Decentralized" exchange is something of a misnomer, as many such systems have centralized components; most systems we call "decentralized" exchanges could more accurately be classified as non-custodial: users trade without surrendering control of their funds to a third party in the process. 2 The average Ethereum block time is roughly 15s at the date of writing [16].

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“…Recent studies have suggested existence of some similarities between cryptocurrency trading and the gambling industry (Delfabbro et al 2021a). These studies have suggested that developments in blockchain technology are intertwined with the gambling industry and cryptocurrency trading may co-exist with gambling disorder (Gainsbury and Blaszczynski 2017, Meng and Fu 2020, Scholten et al 2020. Spekülatif hisse senetleri veya kripto para birimleri söz konusu olduğunda, alınan kararlar sınırlı bilgi, yetersiz strateji veya beceriye dayanıyorsa, sonuçların oldukça değişken ve kontrol edilemez olduğu kabul edilir (Delfabbro et al 2021a).…”

Section: Cryptocurrency and Gamblingunclassified

Kripto Paraların Kumar ve Bağımlılık ile İlişkisi

Çoşar

Arikan

2023

Psikiyatride Güncel Yaklaşımlar

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Cryptocurrencies has been considered as both an investment tool and a great invention that will replace money and change the world order. Although crypto currency trading has been investigated in many aspects, the psychological dimension that directly affects investors has often been ignored. Control of cryptocurrency trading is in the hands of investors rather than a central authority or institution. Thus, the value of cryptocurrencies changes with the reactions of investors. This situation suggests that psychological factors may be more prominent in cryptocurrency trading. Cryptocurrency trading has many similarities with gambling and betting, such as risk taking, getting quick returns, extreme gains or losses. Some significant components of behavioral addiction are also seen in individuals who spend so much time with cryptocurrency trading. The purpose of this article is to provide a better understanding of the psychological effects of cryptocurrency trading, which has entered our lives over a relatively brief period of time and reached millions of investors.

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Understanding gambling behaviour and risk attitudes using cryptocurrency-based casino blockchain data

Cited by 19 publications

References 15 publications

The psychology of cryptocurrency trading: Risk and protective factors

The psychology of cryptocurrency trading: Risk and protective factors

Flash Boys 2.0: Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability

Kripto Paraların Kumar ve Bağımlılık ile İlişkisi

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