Please use imgur.  For some reason, some other image hosting services don't display for people using certain browsers/living in certain countries.

If my bank is saying that I will not be able to access my funds for 90 days and that they'll make a "best effort" to return my funds if my balance is above an arbitrary limit, I'll be contacting the CEO, the board of directors, the Banking Ombudsman, ASIC (regulator for financial services licences) and the media within minutes of reading that article and you can guarantee the Ombudsman will be verifying their claims about any reports to law enforcement and any internal investigations (and will ultimately make his findings public).

Banks typically don't publicly disclose the exact nature of intrusions or the amounts lost to their customers for security reasons.  As their deposits are insured and customer access to their funds is rarely affected by such intrusions (on the rare occasions when it is, banks here typically refund any out of pocket costs suffered by their customers such as dishonour fees or penalties charged by other institutions), it's not really a comparable situation.

Avalon has contacts at the fab (if you've never done business with Asian companies, it's difficult to grasp how critical this is).  They have made no secret of this.  Avalon also does a great deal of stuff themselves which BFL contracts out (which is one reason Avalon's batches have been so small to date).  They have had problems sourcing some components (an issue which they appear to have resolved now).

The small run thing is not conjecture.  Josh has posted about the problems they had with the facilities (including US facilities) they were using not considering their order "urgent" even though they were paying extra to expedite their order.  Hell, they had problems even getting information about where their order was really up to.

Yes, there are thousands of factories in Asia.  Many of them only offer specific processes (this is one reason why people were able to take an educated guess at which fabs the ASIC vendors were using).  Which facilities are reliable?  More importantly, which facilities does your personal representative have relationships with (because nothing is getting done without leveraging a relationship - you can't just pick a factory out of the yellow pages and hope for the best)?

Using third parties for assembly requires impeccable timing.  They don't want your components sitting around in their facility for weeks while they wait for one last manufacturer to deliver a component so they can process your order.  If you miss the "window" they'd set aside for you, there may not be another available for weeks.  Idle machines and idle workers cost them money so they aren't just sitting around waiting for your order.  If you're not ready when they're ready for your order, they'll just go ahead with someone else's and fit you in wherever.

Companies which have their shit together make all of this stuff look effortless.  It isn't.

Small custom runs are extremely expensive.  Even finding a company willing to do them can be a hassle.  Your pissy little order for 50,000 units is going to be squeezed in when they have time and that might be months after you wanted the product because they will always give priority to rush orders from their big customers.

No ASIC vendor is big enough right now to have much leverage with suppliers, so they can't even go the Dell "just in time" route and have all the components delivered at the same time for assembly by a third party.

The "normal" companies you're talking about order chips, boards and cases by the millions and their orders are enormously important to their suppliers.

Avalon has been open about needing the pre-order money to produce the units (it's extremely unlikely that they made sufficient profit on Batch 1 and Batch 2 to fund Batch 3, if they made any profit at all).  It's not ideal, but they're not taking unlimited pre-orders for a product which exists only on paper.  They're producing limited batches which have a known delivery date.

BFL has always maintained that pre-order money wasn't being used to fund development.  If they don't actually need pre-order money to cover expenses, then it makes no sense for them to continue taking pre-orders at the moment (pre-orders should be a liability on their books) - or at least it doesn't make sense for them to still be requiring 100% payment upfront for a product which will not ship for many months under the best case scenario.  A financially stable company doesn't need to do that - you can use non-refundable deposits to maintain people's places in order queues.

If there is one question all companies doing the pre-order thing should be explaining, it's how pre-order money is being used.  

More than any of this, the first company to abandon the pre-order model will succeed.  The time from payment to delivery is still absurdly long and that gap needs to be closed.  Vendors either need to start taking a non-refundable deposit of 10% of order value with the balance payable when they're ready to ship, or they need to bite the bullet and sell on a purely FIFO basis once they have units available for delivery.  

That none of them are doing this almost a year into the ASIC game is worrying because it suggests that they don't have adequate financial backing and are relying too heavily on pre-order funds to meet current costs rather than using the profits from pre-orders to fund production of the next batch (allowing the never-ending pre-order cycle to be broken).  

I can access it.  It gives an incident number so it should be easy to verify its authenticity.

One worrying thing about the report is that it says the intrusion occurred between 1 March 2013 and 31 March 2013 - which suggests they don't know exactly when it happened.

It just allows you to confirm that a report has been made.  There are many reasons why it might be undesirable for the actual information in the complaint to be made public but those who've been affected by this incident need a way to reassure themselves that appropriate action has been taken.

I know you all think I'm something of a dinosaur when it comes to management styles, but this is the kind of situation in which management needs to come out very publicly and allow themselves to be subjected to scrutiny.  I've previously suggested that a public letter from the auditors investigating this incident would be appropriate.  Users essentially want some kind of confirmation that this incident is being investigated from a third party who is unlikely to lie and it's within Paymium's power, and certainly in their best interests, to provide that.

The same amount of BTC are mined every day regardless of whether they're mined with ASICs or not and regardless of difficulty.  BFL (or any other ASIC vendor) delivering in quantity will increase the overall network hashrate and reduce the profitability of existing hardware, but it's not going to affect the overall supply of BTC or demand for them.

Are you sure Stephen?  I'm pretty sure MtGox is never a counter-party to any trade on their platform and that the individual markets are quite separate.  Bitcoincharts seems to confirm this.

http://bitcoincharts.com/markets/

They usually give updates in their newsletter.

How gauche.

But hey, now that you're no longer a millionaire perhaps you'd like to start a thread comparing penis size.

We already know that the product isn't going to perform as advertised, but lack of competition means that people will forgive that.  Nobody else is mass producing ASICs at this point.  BFL may have to lift their game when other players enter the ASIC market but until that happens they have a virtual monopoly on ASIC sales.

As with everything else Bitcoin, it's not a great idea to spend more on ASICs than you're willing to lose. 

If you've only been dealing with them for three months then you ordered in January.  At this point, no-one has any idea when people who ordered BFL ASICs this year might receive them.  The chips they have in stock right now won't fill very many orders at all and there's been no mention of what is happening with the bulk order of 63,000 chips (from which the majority of existing pre-orders would have been filled).

So yes, they might be able to deliver some sub-spec units to June/July orders soon but there's no indication at this time when the revised design will be completed and when those who ordered after July can expect to receive their units.  It's not even clear whether the second 6 wafers have been completed or whether BFL is just going to use the wafers they have on hand to fill whatever they can with lower specs and everyone else will have to wait for the redesign.

MtGox already has lag that bad so people are already used to dealing with it.

Like it or not, as Bitcoin adoption grows the forums are going to attract a lot of users who have little interest in intellectual discourse and even less interest in reading what others have written.  Many of them will have no interest in discussing concepts.

Other boards handle this by having dedicated forums with tougher rules.  The problem with that here is it takes a great deal of pro-active moderation to enforce and there's neither the will nor the resources to do that effectively.  This particular messageboard has an over-arching philosophy of minimal intervention by moderators and that's probably not going to change.

Yep, this is the problem.  "Instant" services are effectively lending you funds for a day or two so you can trade before the money hits their account.  This requires significant reserves on their part and it means they can run into liquidity problems when demand is high (as happened with BitInstant last week).

Good luck to Avalon and users waiting on Batch 2 orders.  Hope it all goes smoothly.

No-one knows.

The 5,000 chips they have on hand (suspected to be 4,000 now because wafer 2 is the one which returned the crappy power results) won't fill very many orders.  The next 6 wafers were supposed to be completed once testing was completed on the first 6 but no-one seems to be talking about when they'll be completed any more (it was supposed to be only a few weeks after the first 6 wafers were done).

Perhaps more importantly, no-one's talking about the bulk order for 63,000 chips - from which the majority of pre-orders were likely going to be filled.

This leaves a lot of uncertainty about when customers who ordered after August can expect delivery because it doesn't sound like they're going to have the chips on hand to fill those orders any time soon even if they can manage to get sub-spec units out to June/July pre-orders in the next month.

I think people who are hanging in hoping that BFL will ship "soon" are assuming that once they start shipping everything will be fine.  But BFL has actually said nothing recently which suggests that they have enough components on hand to fill anything except the very early pre-orders.  Those with orders placed after August really need to start asking questions about what's happening with the bulk chips because delivery of their orders could still be months away even if June/July orders get filled soon.

They should also know with absolute certainty by now how many of each unit they are going to produce from batch 1 (which affects the likelihood of a particular order being filled from batch 1 because of their stupid 1/3 shipping plan), but that's something else they're not disclosing.

BitInstant has already conceded that they're having liquidity problems at the moment due to increased transaction volume.  They probably need to put a freeze on new transactions until everything is caught up and their reserves are balanced once again, which will no doubt cause even more bitching and moaning but it will prevent an even bigger backlog developing.