Perceived value of order position really only applies to those who ordered very early, though.  It doesn't explain the willingness of people to order now, knowing that they'll be waiting at least 2-3 months to receive their units and it doesn't explain those who can't wait to use their discount vouchers (having already waited 9 months for their first units, they're willing to order more and wait months to receive those - knowing that the hash rate will have risen considerably by the time those units arrive).  

The only way BFL ASICs are going to be delivered in a reasonable amount of time is if production greatly outstrips the rate of new orders - and that's not likely to happen any time soon given that people have only 60 days to use their discount vouchers once BFL ships.  No-one at BFL is even giving an estimate on when they expect to have caught up on back-logged orders any more, but it's not likely to be in the first half of this year.  As things stand now, it's going to be a very long time before BFL has ASICs available for immediate delivery and anyone who can step in to fill that gap has the chance to take market share away from them. 

Why not both?  Why not a prohibition on exchange deals in Newbies and tougher criteria for starting threads in Lending/Goods/Currency Exchange?

BFL being in violation of FTC prompt delivery regulations helps customers how?  They can't be directed to deliver a product which doesn't exist.  They can be directed to give refunds but to date they've been doing that voluntarily anyway.  They can likely be fined, but that doesn't directly benefit customers (administrative penalties generally don't).

BFL would argue that failure to request a refund amounted to consent by the customers to the delay.  Customers would argue that they failed to cancel because BFL repeatedly led them to believe that delivery was imminent.

When dealing with regulatory agencies, one of the first questions you need to ask is what you want them to do?  

Legal action for what?  There's a massive difference between a company breaking some regulation and being potentially open to fines and customers having a viable lawsuit against them.  To date, they haven't refused anyone a refund.  While I think that their marketing has been extremely deceptive (which may - in itself - be of interest to consumer protection agencies), what are anyone's actual, provable damages at this point?  What - exactly - makes BFL customers entitled to more than just a refund?

On the one hand, BFL's repeated assurances over the past few months that delivery is only a few weeks ago have no doubt been relied upon by some customers (despite repeated evidence that such assurances cannot be relied upon).  On the other hand, customers have actively chosen not to cancel their pre-orders as the price of Bitcoin rose - they have essentially done nothing to mitigate their "damages".  

While BFL may be technically on the wrong side of consumer law in this situation, that's not necessarily any great advantage to their customers until and unless they start refusing refunds.


You forgot greed.  People aren't cancelling their orders because they want to be among the first to mine with ASICs.  If someone else was offering large quantities of ASICs available for delivery right now, I suspect BFL would see a lot of cancelled orders.  Batch 1 and 2 customers might still hang in there, but I suspect that many people who can't expect to see a BFL ASIC until mid-year even if there are no further schedule slips would jump ship.

They're definitely going to run into cash flow problems at some point if the gap between payment and delivery doesn't close significantly.  A combination of mass cancellations and few new orders would hurt them.  Interestingly, their website still says "pre-order now" so they're not in a great position to play the "all sales are final" card.

This had to come.  Once they have a working product, new sales are pretty much back orders rather than pre-orders.  Should "two months or more" blow out to 6 months, it's doubtful consumer protection laws would be on the side of BFL, though.

Once they commit to their bulk order, they don't want people cancelling their orders if some new player enters they market who can supply ASICs off the shelf.  While that makes a lot of business sense, "two months or more" is way too vague and I don't think anyone trusts BFL to get on top of their delivery times any time soon - so this may actually discourage new orders as people envisage the nightmare of ordering now and being unable to cancel their orders even if they haven't been fulfilled in 6 months.

Recent communications from Jody to customers requesting refunds have indicated that their new attitude is "all sales are final but we will still consider refund requests on an individual basis".  This is a major shift away from her previous "we understand some of you may not be able to wait - drop us a line if you want a refund" position.  

That said, it's clear that quite a lot of people have relied on the previous refund policy as some kind of hedge and were planning on cancelling their BFL orders if they could acquire ASICs from someone else sooner or if the hash rate rose "too much" before they received their ASICs.  BFL should probably give people with old orders one last chance to cancel before instituting a harsher refund policy and make the no-refund period explicit.

This is just going to increase forum clutter and encourage twenty threads on the same topic.

Only those who placed orders between June 23 and July 23 2012 are included in the "lottery".  The 1/3 shipping plan wasn't developed until after that time so it neither encouraged nor discouraged sales.

Will these same withdrawal limits be applied by CoinLab?

While this is undeniably true, things which change your financial projections are a big deal and can have massive implications for the future of your company.  While reducing the number of chips per device doesn't significantly reduce the cost per unit of those devices, it does allow you to build significantly more devices at $1300 each (or to fill more orders which have already been paid for).  If they can scavenge 16,000 chips out of the 74,000 by reducing the number of chips per unit, that's 2,000 more Single orders which can be filled without having to order additional chips - that represents an $2,600,000 in revenue for the first production run, which is significant by anyone's criteria.

While BFL is a bit of a black box in terms of information regarding its funding sources, nothing they have said suggests that they have access to a bottomless well of cost-free money.  One way or another, these delays are costing them significant money and they have to find that money from somewhere - whether it's from pre-orders, selling equity, or loans.  Whatever money they're spending now on unanticipated costs is money which won't be available for something else in the future.

I agree that Josh has appeared not to know a lot of material information until the last moment, but it's been obvious for months that Josh is not directly over-seeing this project and that he gets much of his information second or third hand.  Josh being unaware of something doesn't mean that those actually involved in the step concerned had incomplete or inaccurate information (hell, Josh seemed surprised to learn that piddly little orders aren't going to be given priority when it comes to facilities allocating production time at short notice).

BFL customers have been somewhat over-involved during the last 9 months.  How many chips were being produced/had been ordered is not information which would normally be shared with customers, especially when no information has been given about how many of each unit type are going to be produced from the first 5,000 chips and the following 6,000.  People have reacted to this over-sharing by feeling entitled to have a voice in the business decisions made by BFL.

They can fill less orders with 74,000 chips than with 100,000 chips, so their financial projections and their break-even point are going to be significantly affected by the diminished "first run" revenue.  A 25% reduction is revenue is huge and it needs to be offset as much as possible as it's very likely some of that revenue was earmarked for meeting costs associated with the second mass production run. 

Ordering another 100 wafers requires having the money to pay for them (and the cost of packaging and assembling them).  We simply don't know whether any funds from existing pre-orders have been spent over the last 8 months or the amount of revenue from first run sales which was earmarked for the second production run.

No, you're the one missing the point - I'm a pretty vocal BFL critic - but even if every single Batch 1 customer cancelled their order, all that would happen is later orders moving to the front of the queue.

Where BFL is vulnerable is their bulk order.  Once they commit to production of those 63,000 chips, they need to be able to sell them.  If Batch 1 has been delivered and works as advertised, this won't be a problem.  Despite the ridiculous delivery times, people will continue to pre-order from BFL because there's currently no-one else from whom you can order ASICs in any quantity you like, any day of the week.  BFL originally expected to have 100,000 chips, which would have made X number of units producing revenue of Y dollars.  They will now have 74,000 chips, which will make J number of units producing revenue of K dollars. That's a non-trivial deficit which needs to be offset, and there's probably no way to offset it with the first 11,000 chips - so sales from the bulk order will be critical.

Personally, I believe BFL should stop taking pre-orders until they've caught up on the backlog of existing orders and can offer an order turnaround time of less than two weeks - but as long as the community is willing to wait months for delivery of their order, BFL has no real incentive to abandon the pre-order model and do whatever it takes to close the order : delivery gap.

Why are you so certain that BFL hasn't borrowed money to develop ASICs and/or fund their operating expenses?  It's pretty certain that the months of delays have blown their budget to hell, but that doesn't mean there was never any source of funds other than pre-orders.  It's highly possible that they have lenders and investors breathing down their necks right now as well as customers (and from a practical point of view, they're more accountable to those stakeholders than they are to customers).

SEPA gets bottlenecked quite often, as does Dwolla.  There's not a lot MtGox can do about the transaction limits imposed by their bank.  As a customer, the best you can do is search the forums and see whether there are any current SEPA/Dwolla delays before submitting your withdrawal request.  If there are, you might be better off withdrawing Bitcoins to your personal wallet and selling them OTC.  

Don't ever leave funds on an exchange that you're going to need at short notice for essential expenses.  Never leave more than you can afford to lose on an exchange because the return of your funds is not guaranteed.

They haven't just sacrificed one wafer, though.  The combined impact of various decisions made by BFL since late last year means that instead of Batch 1 plus their bulk order yielding 100,000 chips, Batch 1 plus their bulk order will now yield 74,000 chips. 

You cannot make the same number of units with 74,000 chips as you can make with 100,000 chips unless you use less chips per unit - and the response to Josh mentioning that possibility suggests that BFL will lose orders if they reduce the amount of chips per unit.  It's hard to know how many people would follow through and actually cancel their orders as many customers have previously stated that they'll bail "if X occurs" and then not done so, but it's very clear that a non-trivial amount of customers planned to over-clock the fuck out of their units and are deeply unhappy about that possibility being removed or diminished.

The Terms and Conditions of your debit card account will detail the extent of your liability for unauthorised transactions.  These are updated fairly often and you agree to any changes by continuing to use the card.  

Anything we told you would just be a guess based on our own experience and our local banking regulations.  You need to sort this out with your own bank and if they say they're not going to cover the loss, then get them to put their reasons why in writing.  You may have some recourse through a banking regulator if they're in breach of their general obligations but it's also possible that your bank's Terms of Service impose specific obligations on you in order for you to avoid liability for unauthorised transactions.

More generally, I've noticed a lot of banks are becoming much tougher on the customer liability issue, especially with regard to chipped cards.

If you haven't done so already, you should cancel your card and have a new one issued.  You should also change any passwords/PINs/secret questions, etc associated with the card.  You might want to consider setting your account to require a one-time SMS token for every transaction until such time as this is sorted out.  For the moment, assume everything is compromised and ensure that transactions can't be authorised without something only you can provide (SMS token or Yubikey authentication).

So why haven't you cancelled the remaining order?

Coinbase has nothing to do with this.  It's Coinlab who will be servicing MtGox's US and Canadian customers.

It's also MtGox who has decided they don't want to deal with the crap associated with USD transactions - they want out of the US market, so this is just part of that process.  I suspect people would be whining even more if MtGox closed off their services to US customers entirely rather than transferring those customers to an intermediary.  At least this way they can insulate MtGox itself and its non-US customers from the risks associated with servicing the US market while still allowing US customers to trade on MtGox.  It would have been far, far worse for US customers had they just withdrawn from the market entirely.

I do think they'll eventually deliver Batch 1 and probably Batch 2 (not so sure about how they're going to fund mass production given how much they must have already over-run their budgets).  I think that the delays have allowed expectations to build to unrealistic levels and that there'll probably be a new round of dramas when people eventually get their BFL units because BFL kind of encouraged those expectations in order to keep the masses quiet.  Customers were repeatedly given shit sandwiches - bad news packaged with hints of "something extra" to reward them for waiting.

I don't have the answer for those still holding on.  Obviously those people regard being one of the first ASIC miners as terribly important.  Historically, buying Bitcoins has tended to bring a better return than buying hardware to mine them but obviously some people think even if the window of opportunity for good returns from ASICs is very small, it's still worthwhile.  I'd like to see people stop placing pre-orders until BFL has not only delivered Batch 1 and Batch 2 but until they've caught up on back orders and the order turnaround time is only a week or two.  I think the only thing which is going to make BFL lift their game - assuming that they're capable of doing so, and that's far from certain - is disrupting their revenue stream.  They should be doing everything in their power to ensure that back orders are cleared - even if that means they have to pay contractors to assemble everything until they catch up - but they're clearly not planning on doing that and consider a 3 month wait for orders placed today "acceptable".  They'll continue regarding it as "acceptable" for as long as customers keep placing new orders.  

I don't think Batch 1 and Batch 2 customers have much capacity to "send a message".  It's Batch 3 customers who have the real power here.

Don't get me wrong.  I believe that BFL first of all mislead customers in order to obtain market share and now continue to mislead customers in order to discourage people from cancelling their orders and seeking refunds (more people would likely have sought refunds if told "another couple of months" than have sought them with each "another couple of weeks" update).  That said, if everyone with Batch 1 and Batch 2 orders cancelled, there are still likely enough other orders to use all of the 11,000 chips from those batches. 

Once BFL commits to the mass production run of 63,000 chips, it needs to be able to sell them.  That it's still taking pre-orders for that batch suggests it needs the cash flow from those orders (I doubt that their venture capitalists are throwing unlimited additional money at BFL to cover blow-out in overheads due to months of delays in delivering a product).  Nobody can even estimate at this point when BFL will be able to fulfil orders as they're placed and that is very concerning because their biggest cash flow crunch could actually come after the first couple of batches have been delivered.

But even now, people who've been waiting 8 months for their first units are posting about how many units they're going to order with their discount vouchers - knowing that it will be months before they can hope to receive those units.  While some of that may be "brand loyalty", in many cases it's likely a matter of "ASICs at all costs". 

Nobody should excuse the way BFL has handled this - and they especially shouldn't excuse BFL's "strategic" updates - but customers have chosen to let this particular bet ride long after there was plenty of evidence that the horse wasn't even fit to run.   Those people are prioritising being an early ASIC user above certainty of delivery date, performance, etc.  They've had many opportunities to change their priorities as the context in which they originally placed their orders has changed and have chosen not to - they've chosen to remain BFL customers and the responsibility for that choice rests with them alone until such time as BFL starts refusing refund requests.

A lot of Bitcoin services seem to be focused primarily on the US market and there's definitely a significant amount of distrust towards American business outside of the US.  I'm not sure how that will relate to Bitcoin in particular, though, apart from people being worried about Bitcoin and Bitcoin services being more vulnerable if they are US-based/US-focused.  It's not likely the US government will be trying to gain advantages for Bitcoin via free trade agreements any time soon in the same way that it currently tries to bully other countries in respect of other industries.

That there are currently no crypto-currencies which are competitive with Bitcoin doesn't mean there won't be in the future or that having multiple, competing crypto-currencies isn't desirable.  Bitcoin isn't some sacred cow or holy grail.  It's an experiment and there are lessons to be learned from its evolution to date.