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881  Bitcoin / Hardware / Re: BitForce SC - full custom ASIC on: May 28, 2012, 04:53:13 PM

No, seriously, this pre-announcement will pull the rug out from underneath all other vendors - the Icarus/Lancelot guy in mainland China, Stefan in Germany, the British guys, the American guys with their 6500 board, even the genius-level bitstream guys like EldenTyrell and Bitfury.

It's going to be a bloodbath.

I am certain that is the general effect they are looking for with this particular announcement.  Let's consider some facts, and how they might pertain to BFL's business model.

1)  Enterpoint, a professional FPGA design and build house enters the market with introductory pricing competitive with the single.  They communicate openly and credibly on the forums, report progress and problems, and are keeping to their promised schedule so far.

Q1)  How does this impact the rate of new orders for BFL singles?

2) Enterpoint does not require any payment until product is ready to ship.

Q2) How does this affect orders for any BFL product when they are expecting payment up front with indefinite shipping times? Will customers continue to be willing to supply BFL with their working capital?  (that means being an uncompensated investor since without escrow, their funds are being used for general operations)

3) Eldentyrell promises an announcement on his custom code for Spartans.  Initial claims are 25%-50% faster than current bitstreams.  The single will not benefit as they use a different FPGA.  At the most optimistic levels, cost per hash on shipping quad boards could be lower than mini-rigs that still are not shipping.

Q3) How does this affect new orders for singles and mini-rigs?

Now as an exercise for the reader; imagine that you are running a company that relies on the cash from your order book to continue operating.  Now imagine that the rate that new orders arrive suddenly declines.  As you ship product off your order books you are losing working capital.  Eventually this will result in a negative cash balance at your bank, even though you have a functioning business model.

What would you do?

Would you perhaps announce an imaginary future product even though you haven't shipped your previously announced product?  Would you offer a trade in guarantee on existing products to try to refresh your order flow?

Personally, I would find investors to properly capitalize my business.  Others might choose a path that exposes their customers to the risk of complete losses on their orders.

882  Bitcoin / Hardware / Re: BitForce SC - full custom ASIC on: May 28, 2012, 03:32:25 PM

http://en.wikipedia.org/wiki/Bait-and-switch

Bait-and-switch is a form of fraud, most commonly used in retail sales but also applicable to other contexts. First, customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available and are "switched" to a costlier product.

Take out "price" and put in "power consumption". However power consumption is a cost (unless you get free power and then you would use GPUs)

Ngzhang has a lot more trust and respect than you guys will ever have. There is no reason to try to bring down his name. Uncalled for!


In business school we learned the name for people who pay for products that are still in development: unsecured creditors.  Google that to see your future if you are paying BFL 60+ days in advance for products.  This thread is essentially a confession by BFL that they used the cash from mining rig buyers to build ASIC masks.

Honest businessmen go out of business every day for cash flow reasons.  If that business happened to be using your money for working capital, it is gone and you will never see a nickel of it.

This entire market is fascinating to watch develop.  There seems to be a real lack of understanding of basic business and economics in play.  Mining is a closed market.  If I get more, someone else gets less.  And if a lot of other people get more too, I get less than I anticipated and maybe never recover my investment.  

Given stable exchange rates, the total revenue for mining in the next year will be ~$9.5M.  If new investors come in and double the hashing rate they could expect to capture $4.75M of that.  Buying mining rigs at $0.64/GH that would cost $7M.  $7M to capture less than $5M / year, and that revenue stream will rapidly decay as future investments in miners come online.

If ASIC masks really cost $3M it is simply impossible for both BFL and their customers to profit.
883  Other / Beginners & Help / Re: Newbie Silver for BitCoins... on: May 26, 2012, 05:21:52 AM
I can provide 1 Oz uncirculated Silver Maple Leafs.  How much of a premium are you willing to pay?
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