How exactly could it crash the exchange rate?  There are only 3600 coins generated per day (not 3600 hundred which would be 3,600,000.)  25 every 10 minutes.  That's not a constant I know but an average based on the difficulty - which is only adjusted every 2016 blocks.  NOT every 2 weeks.  So if the hash rate were to DOUBLE in one day due to a huge influx of new BFL boxes.. all those blocks would be found much faster.. theoretically twice as fast.. but still there wouldn't be any EXTRA coins out there.  The difficulty would just raise after about a week instead of 2 weeks.

How would that crash the exchange?


If anything.. the exchange rate baseline should raise with the difficulty.  Because new coins generated now require more work and more power.  If the value of coins doesn't raise considerably after the insurgence of BFL boxes, it would no longer be profitable to mine.  When miners can't break even because the difficulty is so high that a $2500 50GHs miner doesn't produce enough coinage - they'll stop mining.  Why power a rig that isn't producing enough coins to pay the electric bill.  Why purchase a $2500 miner if there's no way to recoup the cost of the miner?

So therefore the coins that those miners do produce they will not sell for less than enough to pay for their troubles.  This changes the supply and demand ratio.  As new people become interested in BTC, want to use it for commerce, want to buy it and invest in it, the more BTC we need in circulation to support that demand.  So that would theoretically drive up the price - or cause the need to move a decimal point.  Maybe we no longer care how much 1 BTC trades for but what .01 BTC trades for.  But the raise in demand for new BTC in circulation is supposed to be supplied by miners.  So the value has to go up with the difficulty.  Not necessarily a 1:1 relationship, but there is a practical relationship between the two.

Yeah I think you're right.  Although if they went bankrupt now they wouldn't finish the boxes, and there'd be nothing to go to KS to buy.

I suspect it's not that they can't easily disclose it, but that they don't want to.  I'm just praying that there are a lot of cancellations and not 40,000 units about to be shipped.  Also that it takes them a little while to ship.  That they don't actually produce 400 units a day.  Here's why: the slower the total hashrate rises, the better for those of us who purchased.  The early adopters will get more time to recoup with their boxes.  If they ship in order anyway, the hash rate will be the same when I get my box (barring what is added from other sources) whether they ship slowly or quickly.  But if they ship slowly, and that speed stays slow after my box is shipped, the total hash rate won't rise as fast AFTER I get my box and I too will have more time to recoup.

Not to mention that when these DO ship there will be MORE new orders as people jump on the band wagon thinking that it's a get rich quick scheme.  So I'd rather people stay skeptical for a while. 

Why all the negativity?

Because those who are mining with older tech are hoping and praying that BFL is a scam so they can keep mining at the current difficulty.  Cause otherwise their mining days are numbered unless they buy some ASICs also.  Even if BFL were a scam (and it's not) those days will soon be over anyway.  The total hashrate (and therefore the difficulty) will be exponentially higher within 6 months.  No doubt about it.  If it's in the 70TH's today it will be no less than 700 or 1000TH's in 6-9 months.

The REAL problem is that BFL is NOT a scam.  That's a bigger problem.  In 9-12 months, paying $2500 for 50GH will be a losing proposition unless the value of BTC hits $500 US.  It's going to be hard to break even when 50GHs is a tiny % of the processing power.  The difficulty is about to skyrocket.  The value of BTC has to rise with the difficulty or mining won't make sense.  <- remember this

Most of the people who paid and then got pissed off for not receiving anything have already demanded a refund.  Might still be pissed and feel screwed, but those aren't the one's here complaining.

And to all those who keep questioning if BFL is just mining with the gear.. gawd!  I'm a noob and I know that's not happening.  It would be easy to tell.  Do some investigating on blockchain.info or something.

And finally, who got an email saying that they're not shipping until october?  Really?  Cause I didn't get mine yet.  Did they only send it to some people who ordered?

confirmed huh?  Sounds like a troll to me.

They shipped 2 of their 5GH units to beta testers.  They are not a "scam".  Now, whether or not you'll be able to break even.  That's yet to be seen.  If they ship all the units people have ordered the hash rate will grow so much (the difficulty will rise so much) that you won't me able to mine much more with a 50GH unit than you can today with a decent video card.

I guess that depends on what conversion price you're looking at between gold, BTC, and USD.  Right now the above link shows gold at 1414.64, on MtGox the value of BTC is 128. but that's the last sale.  The 24 hr weighted average is only 108.  And the price of a 1 oz gold bar at coinabul is BTC12.0447.  So that's actually not a bad price at all.  It's giving you $1414 UDS worth of gold for BTC12.0447, or a BTC to USD exchange rate of 117.4.  That's fairly between the current market price and the 24 hour average.

My bigger question is: Has anyone ever dealt with coinabul?  I'm really curious how they deliver and keep the gold safe and insured?  If I were to spend my BTC on gold what does that transaction look like?  Anyone ever done it?

Nope!

Yes that number has been mentioned before.  Here is one example: https://forums.butterflylabs.com/bfl-forum-miscellaneous/1736-tour-bfl-offices.html#post23453

Your second question.. that's another key thing.  It's what we were guessing here (full post on my blog like below):



Multiply each guess by the number of units and you have total hash rate.

If you're in the early batch, post a pict of your order receipt with the order number on it.

Here's how I know the OP is full of it...


Couple of things.  First, why did you include the time in hours, minutes, and seconds of when the order was placed.  That information is not on the pdf receipt I got with my order.  Only the order number and the date.

Next.. you don't know that order number 12315 will ship with the first batch in 2-4 weeks.  You could have 1000's of orders ahead of yours.  Also, look at the 1/3 shipment part of the faq:

http://butterflylabs.com/faq/

I re-read that faq page.  It wasn't on THEIR faq but the forum faq and that's why it was a guess.  The real faq is where I had seen the thing about July:


And this one which I don't completely understand:


I don't get why they can't "easily" disclose this.  This information is critical to knowing what the mining capability of these boxes are.

Taking them at their word for a minute (which is probably highly optimistic on their part).  Maybe we can reverse engineer how many unit orders they really have.  If they think they're going to produce 400 units a day - that's 2000 a week.  So if they are expecting to be able to ship today's orders by (the end of) July.  Starting 2 weeks from now.  That would be about 8 week to do all the orders.  So 16,000 orders.

That's a lot but it's also not near as many as I had feared when my order number was close to 40000.

I'm not saying they're going to make this schedule.  That's not my point.  But if they were using math to come up with those dates (which people like that do) maybe we can come close to guessing what the numbers in the math were.

We did it as a shared google doc.  We'll either figure a way to share that with everyone or I'll make an excel doc with it.  But then you can put in any amount for added non-BFL.  And you can put in your order number and see a graph for you.

I was chatting with some other ppl today who said that BFL's first batch was 21TH.  But honestly that would only cover about 700 x 25GH units.  By that measure, they'll be sending one of these "batches" every day or two.

I thought I had heard that BLF-Josh said that anyone who had ordered in the last two weeks would get theirs by July.  But now I can't find that quote again.

I did find this on their website: https://forums.butterflylabs.com/showwiki.php?title=FAQ:Real+Shipping+Estimate.


This falls more in line with the guessing that we did.  I'm going to write them and ask some direct questions.  Note that this was a while ago.  They're up to order number 40000 now and I doubt that the 1000 orders a day they're getting now includes ANY cancellations.

Yes but a guess.  The spreadsheet takes into account the current has rate, which includes some asics already, and was guessing about 20 Ths more by the time BFL ships.  I'll make excel files available soon. I have a better calculation that I plan to post soon.

I posted my math on this on my blog. The post is a little long but it shows my method for figuring it out.  Of course (since I ordered a BFL 50ghs) the whole thing assumes that the butterfly lab units will eventually ship. I think they will. If they don't the hash rate won't change much. But if they do ship it changes a LOT.

http://mineshaft.me/2013/04/initial-roi-estimates/

I just signed up for an account there.  I was going to transfer some $ and do some day trading, but every time I check now they're down.  Should I worry?

Anyone else use them?


OH EDIT!!  I just re-read the notice which I posted above.  Sheesh!  The government closed their bank account!?!

Right, but you have to compare it to how many coins you could just buy outright for that investment.  Apples to apples.  If I could buy 25 coins for 2500 vs. how many coins can we mine?  It all depends on that ramp up of total hash rate.  I'll break even on my box but a few months out, it might no longer cover the cost of electricity.

Aren't they only saying that they're going to add another 1.5THs in the near term?  The BFL equipment will add 1000's.  And if you order a unit today by the time it ships the network could be 1000THs.

From the calculations in my blog...

Please let me out of here.  I've been active in this other thread I started in the newbie section, but I really would like it moved to the real mining speculation thread where it will be useful...

https://bitcointalk.org/index.php?topic=176129.0

Thanks!

Thanks.  I have a couple of other posts I'm working on.  I redid the growth rate at a weekly basis, added in the BFL reported initial ship date and the fact that they're saying that all current orders will be shipped by June - to estimate the flow of new ASICs.  For that one we just used the assumption of the mid-line from all of these calculations.  And then charted it.  When I have time I'll post the rest.

Here's the one take away though.  For 2500$ you could purchase X BTC today, right?  Today that would be about 25 bitcoins.  So the break even point on the cost of the miner is 25 bitcoins.  But your time, effort, and electricity have to be worth something too.  If over the life of the miner you can't break even on all of that combined, you might as well just purchase the coins outright and watch movies.

I find the whole thing very interesting.  Because the whole market of BFL miners was that for a relatively low cost you can process a lot of hashes.  But then if everyone buys them, at a fairly quick point they become worth less than that low cost.  BFL responded to the frenzy by doubling the price.  But by our estimated this only encouraged more people (including me) to buy.

Here's a good question...  Would BFL be willing to tell us the total number of THs in all of their orders?  Because this directly relates to the value of their boxes.  If not, why not?  Avalon didn't hide how many THs they were going to be adding to the network.  They let the community know.  But BFL isn't talking.  Their silence makes some think they're not going to ship anything.  I don't believe this.  I think they'll actually ship in a couple of weeks.  I think they are silent because they know they've already reached the saturation point.  And coming out with the info now would stop their sales and maybe get some sales cancelled.

My theory is that instead of saying "hey stop buying" they raised the price to try to get people to stop buying.  But it sort of backfired in one way and not in another, because orders shot up from 600 a day to 1000 a day.  Maybe they need to double the prices again.

I wanted to post this in a more appropriate place but I don't have the forum cred to do it yet.  Admin feel free to validate me and move it where it should go.
========

I should have probably done the proper math before ordering the miner.  But instead I did some quick calculator math and thought that I'd be able to mine a reasonable amount of coins with a 50GHs Butterfly Labs box.  So I placed my order.  THEN I did the full math.  Wow what a difference.

I just started a blog this week where me and a buddy or two will post our mining experiences.  I posted my first round of math there and all the info that backs up my conclusion.  Please check it out and give me your feedback here.

http://mineshaft.me/2013/04/initial-roi-estimates/

Thanks!  Looking forward to the discussion.

Hoping to get on the white list today.  I've got a new blog post with a some math about the butterfly labs gear and wheter or not it's possible to break even with them now.  I want to post it here and get some feedback.  Thanks!

I believe that they are actually going to ship the products.  However, whether or not you'll actually be able to mine any coins with them is another story.  I just bought mine, did the math, and now see that there's going to be a LOT of competition out there.