To my knowledge, there has not been a mass refund (yet). BFL has not suffered catastrophic reputational damage. We know there are people in the world who have more money than sense, you don't need to post an auction to prove it.

Do you see people still investing in Bitcoin Savings and Trust?
Do you see people still putting their money in Bitcoinica?
Do you see people still putting their money in Mybitcoin.com?
Do you see people still buying bASIC devices?
All those companies imploded. Why didn't customers pile in to save them?


As long as you cling to the idea that BFL has unlimited money, you will never see them at risk of imploding.
Clearly you believe they have segregated all of their customer orders in an escrow account and spawned by magic the operating funds for a 20 person company (plus consultants) over the last 11 months.
Here is Inaba/Josh saying back in July 27, 2012 that the BFL singles were being prepped to ship and mini-rigs were being assembled.
https://bitcointalk.org/index.php?topic=90333.msg994223#msg994223
Clearly, their business plans at that time did not include an additional 10 months of operating costs. Where did that money come from?
No venture capital group or private equity group has claimed to have invested in BFL. No angels have claimed them either.

You say that you are not their accountant and therefore you are unconcerned by any financial details of BFL. That my friend, is what is called willful ignorance.

There is already good competition in the ASIC community. More is on the way.
Bitcoin would have been better served if BFL had never existed, that money would have been spent on Avalon and ASICMiner (and perhaps other ventures). Of course, BFL was great for people who already had mining equipment (and did not order from BFL). BFL kept millions of dollars from being invested in actual hash rate and increasing the profit margin of every existing miner.

Glad to see BFL doing something they promised to do for a change.

Walk that talk for a while, then come back and try to sell it.

That may be true.
1) You have a fundamental lack of understanding of reputation risk
2) You are unwilling to question the veracity of statements BFL has made.

I suppose you are type of person to walk into a burning movie theater because you see all the other customers fleeing. You figure you will get good seats for the show since all the other customers left!   

I am just glad they had $120,000 worth of BTC.

If Sonny was caught soliciting investors it would be a violation of his parole. Therefore there are no investors, only people who gave BFL capital to develop a completely new product line. Weirdly, that might satisfy the law. I'll have to hit up the lawyers in the legal subforum.

No, I am comparing two situations that are absurd. One is that 2+2 can equal 5. The other is that BFL already possesses "hundreds of TH/s of equipment". You have already confused GH/s and MH/s. Let me write that number in MH/s so I can be sure you understand. BFL is claiming to have at least 200,000,000 MH/s. The entire Bitcoin network hash rate is 100,000,000 MH/s. It would take sixty thousand Jalapenos to generate that much hash power.

You make the assertion that "market forces" would appear and rescue a failing company drowning in bad press. That is magical thinking.


You think that getting hit with a wave of refunds will help BFL. That is the absurd part of this thread. You say you don't care about BFLs finances and won't bother to examine them because you are not their accountant. That is the root of your fallacy. You think BFL could survive a wave of refunds because magical "market forces" will appear with bags of money to save them. Unless you dispel that notion, every criticism of BFL will seem absurd to you since with infinite market support they are bound to produce your product eventually. You should take a good look at the top level of the Custom Hardware forum and note that it is filled with threads about buying ASICs from companies other than BFL. BFL has competition. Their product is not the top performer like they claimed it would be. The market forces are unlikely to benefit them.

You noted that ASICMiner products are selling, but so are KNCMiner products. KNCMiner are pricing 175GH/s at $3800. BFL is pricing 50GH/s at $2500. Neither company has shipped that product yet, or demonstrated a working prototype of that product. Your market forces are indeed present, but I don't think they are on your side.

Ah. Finally, we get to the root of the problem. You do not understand a hypothetical construct in logic.

You could say that hypothetically speaking given 2+2=5, that BFL is right and I am wrong.

I will rightfully point out that 2+2 does not in fact equal 5 and there is no circumstance under which it would. Then I would ask why are you bringing up some random nonsensical hypothetical to derail the thread.

Inaba said that hypothetically speaking, given that BFL has hundreds of TH/s of equipment, if everyone canceled their order BFL would be happy.

It was rightfully pointed out that it was an absurd hypothetical
you dont have the (hundreds of TH of mining equipment ) because if you have it why you are delaying it and not shipping for the buyer?
and then you jumped to his defense.

Explain why that hypothetical situation was in any way relevant to the OP's plan.

Fine. The list is bullshit. You never claimed BFL is shipping in volume. My apologies.

Please provide evidence BFL has shipped more than a couple of dozen Jalapeno's or let us assume that they have not since there is no evidence to suggest it.
If you cannot provide that evidence, then please explain the following:
Why 66 days after their first unit shipped they are still unable to ship units in volume.
Explain why $5 million in pre-order cancellations would improve this situation.
Explain where their operating capital for the last 11 months and the next few weeks came from.

You most certainly have not been discussing it, but I am glad you finally agreed to address my original post instead of bouncing all over the place. Inaba's hypothetical was wrong because they do not have hundreds of TH/s of mining equipment. There is barely 100TH/s of mining equipment in operation today. You have been defending an obvious falsehood on Josh's part and Dogie was right to call him out on it. Since one of the givens in the hypothetical was obviously false, it is irrelevant to this conversation.

I will address the rest of your wall of text in a second post. 

I tried. You resorted to misquoting me and then fell on your own sword trying to discredit the data supporting my position. You cling to your absurd notion that $5 million of refunds asked for in a public campaign would help BFL. In short, you have offered little actual evidence to demonstrate that any of your criticisms of the OP hold water.


Yes. I have noticed that instead of addressing what is said, you address who is saying it. Thereby you neatly sidestep having to deal with actual evidence and data.

The list at http://bfl.ptz.ro/ was very convenient for people who want to prove that BFL is shipping in volume (yourself included). But as soon as that list demonstrated something that you didn't like you attack it as invalid or tainted data. You can have one or the other, but not both.

Either demonstrate alternative proof that BFL is shipping in volume, or stop claiming it. Until then, either accept the list as a statistical sample from which general characteristics of BFL's order book can be inferred. Or stop claiming that BFL is shipping any sort of volume because that is the only evidence external to BFL that they are.

You miss quoted me leaving out the key information which says that you are insisting that people will cancel instantly. I bolded the entire quote and I repeat it here for you now:
your latest scenario contends that all the people cancel instantly
I have been contending that people would not in fact cancel instantly as you have now twice proposed. Your misrepresentation of my position reveals more about you than it does me.


Their profit margin would be improved by a flood of refunds, but right now they would have to sell more units for that to matter. Who in their right mind would add a pre-order now to wait another 90 days (according to Josh) to get their shipment? The only way it would work is if BFL admitted that the entire Bitcoin marketplace had lost faith in them and every single person asked for a refund. Your contention is that this would be a good thing, and that people would view that as a sign of strength and add their pre-orders to the pile. Nonsense.

My contention is that it would not matter, they would be out of business since their cash to buy parts would be gone, their cash to pay salaries and rent would be gone. While they might be able to mine with a few dozen units they showed in a photograph. They haven't shipped enough units to realize any profit, they have 11 months of burn rate to make back. If they haven't spent any of their pre-order money then where did the last 11 months of operating funds come from? Not that imaginary private-equity group, that has been debunked and even BFL doesn't bring it up anymore.

You keep bringing up the OP. You should read it again. He doesn't say every BFL order should cancel, he says everyone on these forums who complain about BFL should organize a "mass refund exodus". That means a lot of BFL customers, not all the BFL customers. Hit BFL in the pocket book for $2 million or so and see what happens. BFL will still have months of back-orders to fill and be faced with a $2 million tab and a lot of bad press.

The more you post, the more I realize that you are blind to BFL's actual statistics and are skating by on hope alone.

I am using the data that the BFL fanbois have used to "prove" BFL is shipping in volume. If you want to discard that dataset, you must also discard the idea that BFL is shipping in volume since that is the only source external to BFL that demonstrates volume shipping. I was giving you the benefit of the doubt by using that data, if you don't want that benefit I will be happy to ask you to prove that BFL is shipping in volume.

You will be left with 10 "I got my Jalapeno" forum posts, and a picture of Jalapeno cases posted on BFL's website.

I have always been focused on how order cancellations could negatively affect BFL's business.


Again, your latest scenario contends that all the people cancel instantly and all the potential customers know exactly how many orders are left in BFL's queue. A mass of order cancellations is not going to inspire people to line up for BFL. Quite the opposite in fact:

1) They would not be at the front of the line given there might be 10,000 people still in front of them at any given time. BFL's order book is not public, we can only guess with statistical sampling.

2) With no ship date for the first version of the SC and Mini-rig products and a wave of refund requests hitting a company with murky financials. Only a complete optimist would order a product from BFL given the alternative products available from Avalon, ASICMiner, and even KNCMiner (since we are talking about pre-production units).

About 3 weeks ago, Avalon was rumored to have sold roughly 20,000 BTC. It moved the market significantly and set off riots in #bitcoin-analysis until someone figured out it was Avalon selling. The evidence was circumstantial, but it would explain why there are no samples yet. I don't think 3 weeks is not enough time to turn around.

$8 Million, woof.

Who needs FUD? One can simply quote stats from the same website that demonstrates BFL is shipping product to also demonstrate that after 2 months of shipping, they have shipped 0.63% of the hash rate that they promised. With no ETA from BFL on when the products that comprise 93% of BFL's promised product will come out of design and enter production, I would say that nobody needs to make up FUD.

Supporting links and evidence:
1) 93% of BFL's orders (when measured by hash-rate here http://bfl.ptz.ro/) are in singles and mini-rigs. By BFL's own admission none of those have shipped yet.
2) By BFL's own admission, the 1st of 11 months of Jalapeno pre-orders have shipped. That is roughly 9% of 7% which is 0.63% of the total hash rate that they owe their customers.
3) By BFL's own admission, they do not have working singles or mini-rigs that they can ship and there is no firm ETA on when 93% of their pre-orders can actually begin shipping.

1) 93% of their orders (when measured by hash-rate here http://bfl.ptz.ro/) are in singles and mini-rigs. By BFL's own admission none of those have shipped yet.
2) By BFL's own admission, the 1st of 11 months of Jalapeno pre-orders have shipped. That is roughly 9% of 7% which is 0.63% of the hash rate that they owe their customers.
3) By BFL's own admission, they do not have working singles or mini-rigs that they can ship and there is no firm ETA on when 93% of their pre-orders can actually begin shipping.

If the bulk of single and mini-rig sales cancel but the bulk of Jalapeno's stay, BFL could see $6-7 million dollars suddenly vanish from their coffers. They would still need weeks to ship all the Jalapeno's they owe.

People would have to know the refunds took place in order to realize that BFL's order queue had cleared. So BFL would have to come up with the "$5 million" and send it out and then declare that all pre-orders were cleared. If BFL tried to say they had no more obligations to pre-orders before actually paying them all off, people would declare on these forums (and others) that they had not received their refund yet. So no, BFL would not instantly gain back "$5 million" in market pre-orders (I doubt their website and back office could process that many in so short a time).

Any mass refund scenario would obviously play out over weeks as momentum and awareness of it built.
Your scenario depends on every single BFL order refunding all at the same time and then $5 million of new pre-orders appearing instantly to fund the refunds. I do not think that likely or even possible.

Your supposition fails if a significant portion of those old customers could not get their refunds because BFL ran out of money. People will not pre-order from a company that has to declare bankruptcy. BFL will not get to mine or ship to new customers if the old ones don't get their refunds.

Your argument only works if you assume that BFL has tons of money. Your only evidence of this is a statement by Josh that they still have all of the pre-order money. The original purpose of collecting the pre-order money was to fund the development of the ASIC device (which took 7 months longer than planned). Magically, at the end of this extended development cycle no money was spent.

BFL cannot sell their ASICs for that price since they set a far lower price months ago. They have to plow through ten's of thousands of pre-orders before they can jack the price up. Right now, BFL would make more money mining with Jalapeno's than shipping them because they have already collected the cash. Shipping does not affect their bottom line until they reach the end of pre-orders. The latest target for this is 90 days.

ASICMiner did not lock themselves into a contract price months ago and are thus able to capitalize on BFL's failure to deliver.

FYI,  BFL is not shipping 5,000 GH/s units.
They are shipping a trickle of 5GH/s units.
They have not even delivered 1TH/s of hash power yet.
They have shipped no singles or mini-rig units yet, they do not have an operational prototype for those units yet.
The bulk of their hashrate ordered is for singles and mini-rigs. If those customers canceled their orders but there were still hundreds of Jalapeno's in queue, they would be faced with a cash crunch and still have obligations to continue operations.

You assume that BFL did not use the pre-order money to fund operations. Bad assumption. BFL stated specifically that they were soliciting the pre-order money to develop the ASIC. Then magically after 11 months of development they didn't spend a dime of pre-order money? Not likely. The only evidence to support BFL in this is Josh's statement to the contrary.

What did Bear Stearns say right before they went bankrupt? "We are fine, we are profitable, your money is safe, we are doing great".
What did Lehman Brothers say right before they went bankrupt? "We are fine, we are profitable, your money is safe, we are doing great".
If BFL would be bankrupted by a run on refunds, they surely would not admit it here. Such a statement could precipitate a run on their operating funds and put the company out of business.

The hypothetical is what the company will do. A given was that the company is holding hundreds of terahashes worth of equipment.
Tigerfree was correct in pointing out the entire hypothetical was irrelevant because the given was not true.

Josh could have also said:
Hypothetically, what do you think a company, faced with a call to cancel pre-orders yet having delivered 100% of orders is going to do?
You would be correct in pointing out that the hypothetical is irrelevant to the current discussion of BFL because they have not delivered 100% of their pre-orders. It is not a troll to point out a flaw in a rule for a hypothetical.