You need to distinguish between what is possible and what is fair. BFL also had the capability to deny refunds. Because Bitpay allowed BFL to deny refund requests, does that give BFL the moral, ethical, and legal right to?

Using gold for a transaction would be using barter. It doesn't matter how you describe the amount of gold ($1500, 1 ounce, 1 bar, etc). For the refund to be full, you must refund everything the customer gave to you. Giving them half a bar after they gave you a full bar would constitute a partial refund. It doesn't matter that you at some point are going to convert the gold to USD, or GBP, or RUS, or RMB, or BJs. It doesn't matter when you convert it. To make your customer whole, you must give them back what they gave you (or enough money for them to buy a replacement of what they gave you). If you only give them enough USD to buy half a gold bar, they will take you to court.

Ok, but a lot of other people in the thread have. Sorry if I confused your position with theirs.


Again, BFL also had the choice to deny refunds. Since BFL has the ability to deny refunds though Bitpay, would it be acceptable for them to deny all refunds to all of their customers who used Bitpay?

Nobody mentioned the B word.

Yes. This is exactly what I was referring to. Everyone has been saying that BFL was forced by Bitpay to convert to USD and could only refund in USD.
That is not true. Thank you for finding that for me.

BFL had the choice whether to convert the purchase from BTC to USD. We don't know what they did, they might have kept it all in BTC.
BFL had the choice as to whether to refund in USD or in BTC. They chose USD.

BFL's Paypal customers who pay with something other than USD and ask for a refund get made whole using the exchange rate at the time of purchase.
BFL's BTC customers only get back some of their BTC using the exchange rate at the time of refund.
All I am asking is that BFL (who claimed they were not spending their customers money to do development) treat their BTC customers the same way they treat their PayPal customers.

Excellent link, I will add it to my list. The quote you bolded stands out.
Or in the number of Bitcoins paid.  Bitpay made it possible for BFL to issue refunds in Bitcoins for the number of Bitcoins paid. BFL chose not to.


This is the root of the problem. That example you gave is a contract by barter. If you dissolve such a contract (by telling them to take a long walk off the pier), you have to give the party back what they gave you. That means either all the gold, or enough money to buy the amount of gold they gave you. You can't just give them some of their gold back because you think you deserve some based on current exchange rates.

It isn't fair to give customers who used Paypal back their money with the original exchange rate and the customers who used Bitcoin back their money using current exchange rates just because the current exchange rate now favors BFL.

They said that all pre-order funds were segregated from their operational funds. They did not detail how many accounts were used. I don't see why it would be difficult to have BTC in a wallet at the same time they have USD in a bank account.

You keep saying the product was priced in USD. There is clear photographic evidence of Bitpay providing a price in BTC. BFL's operational expenses are denominated in USD. It is only an awkward situation for BFL because they took the full price of the product at pre-order instead of a deposit.

If BFL took a 5% deposit that is non-refundable, that would be much better for the consumer. They are only risking 5% of their capital with BFL and BFL doesn't have to worry about currency risk.

Yes. Why does that matter exactly? It doesn't matter to Paypal. Paypal uses the exchange rate at the time of purchase to calculate refunds. It doesn't matter to the customer what the product is "priced" in or how that price is calculated. If you accept gold bars as payment, you had better be prepared to refund in gold bars and not Zimbabwean dollars.

Avalon seemed able to sell product in BTC. They delivered it too.
Alpaca stores in Peru post prices in Neuvos Sol, and I am able to purchase those products using my USD via Paypal, the exchange rate is calculated automatically based on the current day's exchange rate. When I ask for a refund, I get back USD from Paypal.

If BFL owed 200BTC back to a customer, they could send however many USD it would take to purchase 200BTC. That only works for customers in the US though. International customers might be pissed off (some countries have capital controls on other currencies)

Do this (assuming you are from the US):
Go to an online store in England and find a product "priced in" GBP that accepts Paypal.
Buy the product, and pay for it with USD.
Ask for a refund and see if you get USD or GBP back.

(spoiler alert: you will receive USD back even though the price on the product page was in British pounds. The amount you get back should use the exchange rate at the time of purchase.)

@QuestionAuthority My entire post was typed using only one hand  

Not really, real engineers are not driven by sales figures.

Actually, its quite the opposite. Modern ASIC design tools employed by competent engineers usually produce working products. It is only in areas where you are pushing the boundaries of what can be done like GPUs and CPUs that is fraught with failure. SHA256 is not pushing any design boundaries. They are using a well established geometry at 28nm. It should be a layup. BFL pretended to have expertise in ASICs and you should not judge actual engineering firms (OrSoc) by BFL's track record.

Please prove that OrSoc & KNCMiner have no chip testing methodology. Links to posts where they say they are "employing no chip testing" would be sufficient.


The product does not yet exist. They are being careful about setting expectations. They don't want to "BFL" their customers.

I am sure after the product exists, they will document what it can do. Right now they are releasing estimates.
You confuse absence of evidence with evidence of absence and post no evidence of your wild conjecture.
Please provide citations for your statements in the future.

The volatility shouldn't matter if they are putting pre-order funds into an escrow account like they claimed. If they can't deliver for 12 months, then yes they have 12 months of currency risk that they should hedge. This is only a bizarre circumstance because BFL took the full amount in pre-orders (which is not usual) and held it for 12 months, but supposedly did not spend it.

BFL should have taken non-refundable deposits instead. Then there is no currency risk they need to hedge.

Paypal currency conversion policy:
https://www.paypal.com/helpcenter/main.jsp;jsessionid=rV0JKsnTq3Z197277Pg2sQ4mJ1HJWQ5xpxnJnzGxvW9J1FhW03yL!-1588418?t=solutionTab&ft=homeTab&ps&solutionId=163394&locale=en_GB&_dyncharset=UTF-8&countrycode=GB&cmd=_help&serverInstance=9012
Refunds are performed using the exchange rate which was current at the time of the original payment.

Bitpay lets you price in Bitcoin, they let you keep the bitcoins.
https://bitpay.com/bitcoin-payment-gateway-api
https://bitpay.com/faq

Most of this argument is a result of misinformation like:
Oh, BFL is just doing it the same as everyone else! False. See above link for how Paypal does things.
Oh, BFL had no choice but to convert into BTC! False. See above link from Bitpay.
Oh, BFL needed to spend the BTC to design the ASICS! False. BFL has stated repeatedly the pre-order funds were/are kept separate and not used for operations.

The claims that "BTC isn't ready for people to buy stuff with it" is extra irony appearing on these forums.

I am trying to get a Vanity Address with "CrazyGuy" and I will send a satoshi to it for luck.
If that doesn't work, I am out of ideas. 

At this point the thread is filled with people (like you) who have not read it, as this was posted earlier to exactly the same comment.
https://bitpay.com/faq
Merchants choosing to keep the bitcoins can be anywhere in the world.

Merchants choose what Bitpay will do with the BTC. Merchants offering to escrow the BTC in anticipation of a refund would choose to receive the BTC instead of converting it to one of 30 different currencies. Merchants choosing to spend the BTC (which BFL promised not to until they shipped) would convert it to USD.

Maybe Korbman will read this post and avoid further embarrassment by posting blatant misinformation. Extra irony that he could refer to earlier in the thread, but not know this.


I love how Erk never actually refutes the evidence against him. He just says "troll" and "smear" a lot. Kind of like a weaksauce version of Josh's LiarDouche Powder (TM).

Most businesses would hold BTC until they shipped the product. It is only too risky for companies like BFL that don't ship for months on end.



Actually, FINCen just issued guidance on this and they do call it a currency, but Bitcoin has not yet been tested in courts. Other virtual currencies have been tested (airline miles, facebook credits, etc) and it is not too much of a stretch to establish them as precedent.
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

A quick google search of Inaba and preorder turned up this post. I provided the relevant quote that they claimed to hold preorder funds in a separate account and did not use it for day to day expenditures.

You can read the whole post to get the context.


Sure, but why would they? If they intended to refund their customers what they paid, why would they exchange the money and take a currency risk with one of the most volatile currencies on the planet (BTC). The only way it makes sense is if they needed to spend the USD, which BFL said they did not need to.

Of course BFL could have kept the Bitcoin paid funds in Bitcoins. BFL promised that they were not touching customer funds to pay suppliers, wages, rent, etc. BFL claimed to have Venture Capital funding to pay for that.

If BFL did not claim to have put the customer funds in escrow and offer them for refund at any time, I would not expect them to. But they did so claim, so I do so expect.  If BFL had just said from the start that they were funding ASIC development with pre-order funds and they had to convert BTC payments into dollars for this reason and that all refunds would be in dollars, I wouldn't have an issue with the way they did refunds.

Paypal is a financial services organization which knows how to hedge currency risk.


Except Bitpay was not the one offering the escrow & refund service, BFL was. BFL claimed they were holding the customer funds in escrow and those funds were available for refund. Paypal offers a similar service, and they use the exchange rate at the time of purchase as the exchange rate for the refund.

You should have received back what you paid, minus any Paypal fees. From their website
Refunds are performed using the exchange rate which was current at the time of the original payment.

According to Paypal's website, you have a grievance.

Exactly, Paypal is acting as an escrow which is precisely what BFL assured their customers was happening with their funds.
From Paypal's website
Refunds are performed using the exchange rate which was current at the time of the original payment.

BFL chose to hold for 12 months instead of 45 days and apparently did not hold their customers BTC in escrow as they promised they would.
BFL should not have promised to escrow and refund every one of their pre-orders. But since they did, they should abide by that promise.

If you paid via Paypal 100 GBP for a product priced in USD and then asked for a refund, you would receive 100 GBP back.

Remember, originally BFL was only going to hold the BTC for 4 months while they designed and manufactured their ASICs (June 2012 to Oct 2012).
BFL offered full refunds, and said they held the funds they received from pre-orders in escrow. How they manage their currency risk due to that escrow is their business.
I am not saying they should hold all their funds in BTC. I am saying they should have held the BTC they received from customers in escrow until they shipped the product. If they want to bet on another currency while holding their customers funds, that is their business. If BFL bet on USD over BTC, they lost and should not pass that loss onto their customers.
If BFL wanted to spend the BTC on operations and parts, they could have said that is what they were doing with it. Avalon does that. Avalon offers no refunds because they are spending the order money on operations and parts. BFL chose to offer full refunds to all customers, so they couldn't very well spend all the money they got.

If they chose pay in BTC, they were shown how many BTC they needed to pay. This wouldn't be an issue if BFL did not claim to have all customer pre-order funds in escrow and offer full refunds to any who wish it. If they spent the money on operations and parts, I would be fine with it if they would just come out and admit it.

Yes.

BFL says they kept the funds in escrow so that if customers wanted a refund they could depend on their funds being there. The only reason BFL would convert them to USD would be to spend them on something which they promised they would not do until the orders were shipped.

The price in bitcoins is shown when you get to the checkout screen having chosen "pay with bitcoins".

Edit: Awesome pic. I am totally gonna hook up with the hottie in the overalls when this thread is over.