Code was in my email this morning.

PM me for an address and we can make a deal.   

[The first experience new people are having is being ripped off.]

As the influx of new people to Bitcoin continues, I am noticing a troubling pattern.

The first experience new people are having is being ripped off.  This is often partly their fault for being greedy and/or reckless, but it is not a healthy situation for Bitcoin.  In the interest of reducing the rate of muggings being part of the introduction to Bitcoin, I am creating this thread to cover some of the obvious traps, and grind a few axes of my own  .  I will occasionally point ads to this thread.

mods give me a few days grace to get this into shape

1.  Never buy bitcoin from individuals without trusted escrow.  There may be honest sellers for moneypak, etc., but there are enough thieves using the demand for bitcoin to scam that you should assume any transaction with an unknown party will be a scam.  Meet face to face in a secure location with online wallets on each side, or use escrow.  

2. Butterfly Labs.  Billions of bytes have been wasted documenting the massive pile of fail these clowns are.  Giving money to them today is a great way to lose it. Nine months of order backlog ahead of you guarantees that even if they ever get their shit together and ship a working product, you will get your fancy gold mine right in time for the difficulty to be 100x higher than it was when they announced their 'product'.

3. Control your keys.  Don't store funds on exchanges, trading sites, or anything that pretends to be a bank.  You can't know if they are short selling your bitcoin to cover expenses or just take huge profits.  Don't use 'convenient' online wallets like instawallet that are completely insecure.  Learn how to use paper wallets securely bitaddress.org.

4. Stay away from Bitfloor they are insolvent, owing over 25 000 BTC to customers. Eventually one of their customers is going to get tired of the entire facade and file to force them into bankruptcy.

5. Never borrow or lend bitcoin.  Bitcoin is unique as a currency that has a finite limit of total currency units available.  Over enough time, any amount of interest will exceed the available amount of currency.  There are 100 more practical reasons not to borrow or lend but I will leave it at that for now.¹

6. Don't buy 'perpetual' mining bonds.  When the history of Bitcoin is written, the issuers of these instruments will be remembered as the most brazen of rogues.  Selling a call on the dividends generated by a set hashrate as if the dividends will continue in perpetuity was stealing candy from babies.  On top of that, most of the 'perpetual' bond holders defaulted within 6 months.

7.  Don't trust yourself.  Bitcoin has enormous potential, and has proven itself to be robust and effective.  This is the gold rush phase, and people are getting giddy.  If you imagine you're going to get rich quickly and easily, it is easy to deceive yourself into ignoring the obvious warning signs of being ripped off.  Entrusting money to a convicted felon is just a less efficient way of throwing it into the wind.

¹  I have lent BTC to people I believe are trustworthy.  The loans were for bitcoin mining hardware and the terms were 0% interest.

I have purchased on slot in next weeks ad round for an ad warning newbs about BFL.  I am looking for suggestions on content, and formatting.

My first thought is the following text:

WARNING:  Butterfly Labs has a long history of failing to deliver as promised.  Paying for their incomplete ASIC could be a huge money loser.

Anybody know some HTML to make that pretty?

Any other suggestions?

Coins sent to 1LuyJib375mAcyQLBJtT9sMNoQzKp2jcSx  will be used to bid on future ad slots.

I am seeking enough Bitfloor debt to make pursuing action against Bitfloor and Roman worthwhile.  Please see this thread.

https://bitcointalk.org/index.php?topic=159221.0

Mods, I hope you will tolerate the cross post since miners are the most likely to have been burned by Bitfloor and may not monitor the service forum.

I have decided it is very unhealthy for the Bitcoin community to allow failures to continue operating.  In my opinion Roman is a scammer for operating an exchange and holding both bitcoin and US currency for customers when his company is insolvent.  Zombie banks are bad enough in the fiat world.  We are fools if we allow such things in Bitcoin.

Since I know he will not be tagged in this forum, I am considering taking action in the real world.

Please see the link below if you are one of Roman's victims.

https://bitcointalk.org/index.php?topic=159221.0

As many of you know, I have been bitching about Roman's decision to seize bitcoin from his customers at Bitfloor for a long time.  Roman continues to refuse to show any plan that would result in his involuntary creditors being reimbursed in this decade.

I am considering legal action, but would need to hold more debt in order to make such action worth my time.  This post is seeking holders of Bitfloor obligations that would like to transfer those obligations to me.

I am offering 2 possible payments:

• A flat 0.05 BTC per 1.0 BTC of current Bitfloor debt
• Payment of 0.01 BTC per 1.0 BTC of Bitfloor debt, plus 20% of any funds recovered from Roman and Bitfloor less expenses for the recovery.

You will have to provide absolute proof of ownership of any debt, and sign legal documents attesting to both your ownership of the account and transferring control of the debts to me.

If you are interested, please PM me with the subject BITFLOOR, and give this thread a bump.

I have put 6 quad spartan-6 CM1 boards that underperform the 760 MH/s specification up for auction here:

https://bitcointalk.org/index.php?topic=159052.0

The reserve bid is 3 BTC, which is a bargain compared to the 2 spartan-6 X6500s which have been selling for 5.3 BTC

I have 6 Cairnsmore boards that hash, but not up to standard.

Two of the boards kick out 50% hardware errors, resulting in an effective hashrate of ~400 MH/s
3 boards have one pair operating below standard for hash rates ~600 MH/s
1 board was programmed with 170 MH/s bitstreams, so it is running at ~680 MH/s

All of these are less than one year old, so the Enterpoint warranty should apply.  I don't have the time to chase returns so I haven't pursued that option.  It is also possible that re-programming the boards with HashVoodo, or Makomk's faster bitstreams with give you substantially better results.  I haven't had the time to try.

All boards are up for Auction sale.  When the auction closes I will ship the boards from best to worst in order of the highest bids.





Terms of Sale
Payment in BTC only
Escrow with John K.
Orders of 2 or more will ship stacked for side cooling and include up/down cables
Buyer pays shipping 0.3 BTC within USA, cost plus 0.1 BTC international
Auction Closes Sunday at 12 PM Eastern time Escrow payment due within 24 hours, shipping will be ASAP from confirmation of escrow payment

Avalon's facility pictures

http://imgur.com/a/KPBTl/noscript

Shipment would be from Arizona, USA.  Escrow with John K. for a fee of 0.1 BTC / board.  Shipping is extra, 0.2 BTC in the US for up to 6 boards.  International shipping at my cost.

Typical board performance is >800 MH/s, but I will only guarantee minimum of 760 MH/s.  Boards can be shipped as singles with top mounted fans or stacked with pairs in Master/slave configuration so only 1 USB is requird for each pair of boards.  A 12V power supply is needed, and not provided.  The boards have PCI-E, Molex, and barrel connectors for power input.

If you purchase 6 or more, I will discount the price to 5.75 BTC.  

Note that these boards have 2x the hashpower of the X6500 units currently being offered for 5.2 BTC each.

Sales in BTC only with escrow!

If you are bargain hunting, I have an auction for some less than stellar boards here:
https://bitcointalk.org/index.php?topic=159052.0

Bitfloor is remarkably invisible on these forums.

It has been many months since his pitifully small return of coins to his victims.  I say his victims because the loss of coins was 100% Roman's fault, but it is the customers with coins on account who actually took the loss.

I challenge Roman to come here and define a schedule of releases for held coins, and to create a market for exchange of those coins.

I find myself in the inconvenient position of being an involuntary creditor to Bitfloor and Roman Shtylman in the amount of 103 BTC.

I am taking offers for the purchase of this debt and all related legal rights.

[a market leader in microprocessor design]

Let's just see what we can learn by reading...

Butterfly Labs Announces Next Generation ASIC Lineup
PRWebPRWeb – Sat, Jun 16, 2012
Largest SHA256 Hardware Manufacturer Acquires Venture Capital Funding
(PRWEB) June 15, 2012
Butterfly Labs (BF Labs Inc.), a market leader in microprocessor design, is unveiling today the technical specifications for three of its next generation SHA-256 processor based products:

This is great!  Already we have a claim that can be independently verified.  That is gold for the wise reader.  So, market leader in microprocessor design... {googling....}  Intel, Samsung, ARM, AMD, Texas Instruments...  Well maybe they meant specifically for bitcoin.  Nope, AMD...
Well ok, so they talk out of their ass a bit.  Still there's gotta be something here right?

1)    BitForce SC Jalapeno: a USB powered coffee warmer providing 3.5 GH/s, priced at under $149

They have so little confidence in the value of their product, that they pair it with the most useless USB novelty item ever?  Is it April 1st?  

2)    BitForce SC Single: a standalone unit providing roughly 40 GH/s, priced at $1,299
3)    BitForce SC Mini Rig: a case & rack mount server providing 1 TH/s, priced at $29,899

Well the verifiable facts are starting to look thin on the ground here.  Maybe some more will come up later.

It's fascinating that the headline reads ASIC, but nowhere in the text does that term get mentioned.  And neither does the process node these miracle devices will be built on, or the foundry partner that will actually build them.  I wonder if they even have a clue how long it will take to build and debug the silicon.  Then you have to package it, and build a device around it.  Maybe that's why there are no dates here.  I'm sure it won't take long though.  Making semiconductors is easy right?  I probably should build a couple in my garage next weekend.

"Butterfly Labs has always considered itself a serious manufacturer in the SHA-256 hardware industry and our customers are leaders in providing hashing services for some of the world’s great technological challenges,” noted Nasser G, BFL CTO. “We see the BitForce SC lineup as the natural next step in continuing to meet our customer's needs.”

Hi Dad!  I'm a CTO now! Oh yeah, the truncated last name... It's a hip-hop thing, you wouldn't understand.  I'm not ashamed of you Dad! It's my COMPANY.

Because our first and second generation equipment is expected to be outpaced very quickly by the new hardware, customers who have purchased earlier generation products will be able to trade them in at 100% of their value toward the purchase of SC-generation hardware.

Osborne Computer company.  Google it, kids.  A unique way to try to dodge Osborning yourself, but what's in it for the buyers?  Do you get priority just for owning the old junk?  It doesn't say that here.   These things are going to sell like ice cubes in the desert! I wonder what priority a business would give to a trade in versus a full cash buyer?

Venture Capital Funding Acquired, Record Rate of First Quarter Growth

Butterfly Labs, the largest market provider of SHA-256 hardware, is now backed by private venture capital, and looking forward to continuing its operations in what some have recently labeled the “Silicon Prairie” of the Midwest.

Not a word about how much funding they got, or from who.  Usually both those details are trumpeted in releases announcing completion of funding.  Maybe they thought explaining how Inaba and Giga raised a pile of bitcoins for them would just confuse people.

Retail sales have continued to grow strongly, and with exponential month-to-month sales increases, the decision to back BFL was made easily. “Butterfly Labs has strong fundamentals indicative of the kind of rapid growth company we support,” the private equity group notes. “Having made bold investments in new technology, they’re poised to redefine the landscape for SHA-256 hash verification.”

No names for this 'group'.  I wonder if the 'group' was behind a screen with one of those voice scramblers they use on 60 minutes when they gave this quote.  

It's funny too how the reported order queues in this forum don't support the claim of exponential sales increases.

Founded in 2011, Butterfly Labs is a worldwide leader in SHA-256 hardware products. The company offers a range of products and consulting services in semiconductor design.

“Butterfly Labs” and “BitForce SC” are trademarks of Butterfly Labs Inc. in the United States and/or other countries.

Nick W.
BF Labs Inc.

And once again we have someone afraid to give his full name.  I'm proud of the business ventures I'm involved in.  Why would Nick here want to conceal his name?

I can think of a few reasons a person would conceal his name.
 - felony convictions
 - SEC violations
 - previous bankruptcies
 - history of civil lawsuits over business practices
 - registered sex offender status

I wonder what Nick and Nasser's reasons are?