Bitcoin Forum

It would not let me post and forced me to re-type (maybe an omen)?
I am curious what NEW people (ie. people only THINKING about mining but seriously considering it) think about BFL and whether they are legitimate (and slightly incompetent) or if they are just continuing on the path toward recidivism.
Would like to really know WHY you believe what you believe.

I will list the "facts" as I perceive them and you can agree or disagree.

1.  CEO was convicted of a lottery scam that ripped off mostly the elderly.
2.  The amount of cash BFL has likely collected is in excess of $20 million USD.
3.  The amount of expenditures to get this money (including the pictures of that equipment and the leasehold improvements on the offices at the construction company building and the $2500 they paid to make a barely functional website is likely less than $1M.
4.  Josh (the apparent face man of the company) never debates anyone in a rational manner nor does he seem indifferent when questioned, he goes ballistic or threatens people.  This is something you see from criminals all the time.   When someone asks why you brought a box to CES, an honest person would reply with an explanation of the development process and say it is so people can see how it will be packaged and start thinking about how they will cool it and hook it up.   Does he have a record or only some civil stuff against him?  It does seem coincidental that a Josh Zerlan of KC, MO was listed as a defendent in a DIRECT TV US federal case that they seemed to have won?   http://www.gpo.gov/fdsys/pkg/USCOURTS-ksd-2_03-cv-02287
5.  What would the justification of not posting people with updates on the testing process and the schedule of production in the past week.   When I go to the boards on their site, I feel like it is a therapy session for very smart people who are in denial of being scammed.

I never knew he was convicted of lottery scam. Are you able to back that up? If it's true then it's a good thing I haven't placed an order with them yet. I was actually considering!

BFL "face man" Josh Zerlan defended his involvement in it trying to make it seem like a semantics thing, then they used PR to try and diffuse the topic (which is weird when you have sent out another minion to cop to the crime but try to make it sound like it is NOT a crime).
http://codinginmysleep.com/interview-with-sonny-vleisides/

Thanks for the info! I appreciate it!

I just want to understand what the people that gave them money are thinking?
http://ca.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20100915_0004129.CCA.htm/qx

That maybe someone that has the same name as someone that was busted for ripping off DirectTV gets together with someone who has the same name as someone that was convicted of scamming the elderly and between the two of them they have the technical know how to build something quite complicated that can make people the money they paid for this device back in NINE DAYS?   And, because both these people who have the same names (and are from the same state) as these two other guys that are crooks are REALLY NICE guys, they want to actually ship a group of unknown and greedy strangers this highly technical machine.

Does that seem to sum it up?   

Avalon has supposedly shipped ASIC devices, so the technology is available.
I highly doubt that BFL designed anything other than the housing for their product.
I do NOT mean that as a slight.
I believe that they contracted pretty much everything involved.
Unfortunately, that means that BFL was given promises of delivery and they passed along those promises.

 

BFL has alot of skeptics for a reason. Many of them posted above.

There's no sensible reason to take such an unnecessary risk to do business with folks with this type of reputation. I would turn your attention to Avalon Asics.

I think it is almost 98% probability that Avaolon has shipped, that the technology is viable and available does not answer the only question that I have?
For the people that still believe in BFL, why do you believe?   What makes you think that the two people who have the same names and live in the same state as two criminals will actually ship you the golden goose (assuming with their tech bare resumes they can even outsource the production of a golden goose) instead of keeping it for themselves and printing coin that is untraceable?
Ever think the decision to locate this "business" in MO might have been decided by their court ordered probation and not by their own free will?  Hmmmm, if you wanted to flee to the caymans or portugal (no extradition), it would be good to have machines paid for by others that print untraceable money to go along with the 20MM you stole, wouldn't it?

Anyone seen Josh in the last two days and has an Iphone to snap a photo?
I mean anyone in MO.    It will be more interesting seeing the photos of where him and sonny really are now.

What about the FPGA devices they shipped last year?  Is that part of the "scam"?

do you have a good reason why it should not have been?   it is a small investment to make 20 mm tax free.
what do you think is going on then?   they have not shipped in 9 months after taking the money and avalon ships after two and a half??

Well if that's your logic then why don't they ship ASICs and then make $40m by scamming whoever pre-orders the next generation of devices?

I'm not sure Avalon isn't scam either. There is still chance of scheme like this:
Each Avalon unit really costs 10k$ (because they are using semi-ASICs like Altera HardCopy), they ship 100 units and take several M$ in pre-orders for batches #2 and #3 then run with money.

Avalon has shipped, you can check on other topics here. But as r.willis said, it could be a scam to get future orders.

I think the difficulty factor will show whether such high-power devices are out there mining in the next couple of weeks.

BFL on the other hand is a scam, a giant ponzi scheme. You can see their banners all over the net!

You can't tell much looking at difficulty, because BTC is rising and more and more miners turn their GPU rigs on, as they are profitable again.

For a summary, please see: Butterfly Labs CEO 25 Million USD Mail Fraud  (https://bitcointalk.org/index.php?topic=110805.0)

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Please note that: So far, the first wave of customers for the ASIC line have lost 90% of their Bitcoins for nothing in return.

In a nutshell: This means that BFL can, at their leisure, "fail",
then, refund the dollar value of every order placed since last summer,
and walk away with many, many, many million dollars worth of Bitcoin denominated profit.

This bears repeating:

IF BFL FAILS, the owners of the company stand to earn tens of millions of dollars.

Very clever scheme, cery simple mechanics.

At any rate, it's WIN/WIN for BFL. LOSE/LOSE for their customers.

Let the world know!

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Also note that there has, supposedly, been a change in leadership. Nasser Ghoseiri* has, allegedly replaced Vleisides as Chief Executive.
Nasser is a France based Iranian expatriate, currently employed by Société Générale, the bank, in Paris.

Who is charge of day-to-day operations for BFL in Kansas remains unknown, and they decline to answer inquiries into the matter.

Again, please read: Butterfly Labs CEO 25 Million USD Mail Fraud  (https://bitcointalk.org/index.php?topic=110805.0)

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*https://www.facebook.com/nasser.ghoseiri

Because what BFL actually shipped was not that complicated compared to what they are trying to ship.   And, maybe 20MM is enough for them since there are not as many people in on this scam as the lottery scam?   I actually think it is helping Bitcoin and the value and definitely helping minors since a lot of the early adopters have been effectively kept out of this market for 9 months.   It is almost like a bunch of miners got together and thought up a way to keep other miners smaller than they otherwise would be.

Elux;

that is a really good point except I believe BFL took the majority of their money in USD and converted BTC immediately through an intermediary.   So, I think they are left with just receiving around $20 million.   So, I do not think they can "fail", refund the money and walk away rich.   I think they need to stiff everyone if they want to be rich.   If the second point you posted was true, someone should tell SG, because every investment bank in the world has HUGE restrictions on employees working on the side or even investing in businesses.  You have to report every investment you have to compliance and it must be allowed by senior management, all "trades" in securities and FX must be done through a specified account so compliance can monitor that you are not violating SEC rules.

It may be revealed that they converted enough customer funds into dollars to cover their expenses, through BitPay, the intermediary, while keeping the rest in Bitcoin. BitPay should have (but will be unable to reveal this information) except if a judge orders them to do so. BFL, on the other hand, could freely choose to reveal this information, and thus prove their honesty, if they were in fact honest.

Elux;

What about this theory?   Josh and Sonny are moving $1MM pay offs to others in the scam and shutting it down?
https://blockchain.info/tx/eb1a3f97ac4579eb4edec99315fb44c9219bdbf7bc180abc5e09590ec93a2b71

No. That would be overtly illegal and stupid. They are not stupid.

They would need to "fail", i.e. shut down the company first.

3 outcomes: Shut down, go bankrupt or deliver.
Each is a win for BFL and a loss for the customer.

(Yes for sure including delivery.)

Why would they need to pay anyone off? I'm sure they can afford very nice wages.

Everything I've been reading from reddit's bitcoin forum has lead me to believe that the ship has largely sailed on making BTC off of mining. These ASIC devices seem to be ridiculously difficult to produce and only come out a few units at a time, but conversely, increase the mining difficulty by a large amount. So by the time you sit though a long waitlist of customers ahead of you and eventually get your ASIC, you won't be making much BTC per day.

That said, it's not really that big of a gamble to drop $149 on a Jalapeno and just hope that maybe you're able to eke out another $100 of profit out of it. Just be ready for that to not happen and for you to end up with a cool mug warmer :)

I don't know if Butterfly Labs is a scam or not but I find it irresponsible to accept so many pre-orders for such a long period of time without actually having a product to ship.  I believe the pictures you see on their website are nothing more than concept art.

..a challenger appears:

https://i.imgur.com/HxDPndN.jpgm.png (https://i.imgur.com/HxDPndN.jpg.png)

See here for some USB-powered ASIC porn:
https://bitcointalk.org/index.php?topic=99497.msg1819469#msg1819469 (https://bitcointalk.org/index.php?topic=99497.msg1819469#msg1819469)


..want to bet who will deliver first?

http://betsofbitco.in/item?id=1525 (http://betsofbitco.in/item?id=1525)
;-)

Ente

I think it's more than a scam.
I actually think they have a few real working products, but think about it: Why whould you ship a 150$ product to a customer (who's already paid months ago for the device), when you can keep it for yourself and have it mining for months at a few thousands dollars, just by saying: "The product isn't ready yet, be patient" ?

Anyone who's ordered will NEVER see their ASIC, and if some do, It will be because it is not profitable anymore.