Here's my response to you, and, again, I don't have a dog in this ring.

There must be hundreds of "common folk" among the readers and posters of this forum.  I don't have any count, but it looks to me that most of the reports of hardware are from first-day adopters, luminaries, bitcoin insiders, or opinion makers such as bloggers.  I may be wrong in that, but if so, someone could easily show a list of "I got mine" posts from "just folks."

Nothing you state changes the perception of a company with serious cash flow problems.  As some one posts here, without the need for tin foil hat, it is very plausible that the announced chip sales is an attempt to get sufficient pre-sale capital to pay for the shipment of production chips. 

There is, in the real world, something termed counterparty risk.  I means the risk that the other side of your transaction either fails to deliver, or, more precisely, fails.  About ten days ago, there was stress in the Chinese banking system, and the overnight bank-to-bank lending rate hit 25%!  The reason was simply a deep concern that one or more large banks might be on the brink of failure.  None did, not surprisingly, and the market unfroze again. 

There is, here, with BFL, very well delineated counterparty risk; anyone can see it.  From this, detractors will extrapolate to ruin, supporters will explain and excuse the actions causing that perception.  The perception, though, is real enough.  If there is, in fact, a new restriction on refunds, some will see that as a defense against a "run", which will only add to the perceived risk.     

Man you nag on

So why all the secrecy? Why not just answer some of the easy questions in the article?


Who are the owners of BFL?

What do Chris and Sonny actually do?

Who owns the Bitcoin Development Fund?

What is its official status?

When are you going to donate 1000 BTC to actual charities?

Jesus finally got to the end of the thread - had to skip most of K9's otherwise would have been here all night - besides there's never anything new in a K9 post.

@OP - you should have took the 20k on ebay - I doubt you'll get near that on bitmit.

Just got my refund for a 50GHs unit cleared through PayPal. And it was ordered at the end of April.
The prospect of making a ROI started to look grim after the last two difficulty jumps, so I decided to bail out. Asked BFL nicely about it and they obliged with no fuss.

I can't tell if that statement is for buying a USB miner or against.
But here's the facts for those that don't know.

The value of BTC is irrelevant to the ROI of hardware. If hardware does not return the BTC it costs to purchase. You are better off just buying BTC from the exchange and holding it.

If difficulty rises too high people stop buying hardware and inefficient hardware drops out.  Difficulty corrects.  End of story until the next price bubble hits.

So that big dive just went back on... thoughts?

Did someone trip over the ASICminer plug yesterday?

For the lolz: https://forums.butterflylabs.com/bfl-forum-miscellaneous/3521-bfl-doesnt-refund-anymore.html

Consider the following counter-question:
If you spend 11 BTC ($1,200) to buy a device that will produce 1,000 BTC ($100 after a huge market crash), will you make any profit?

That's why I assume no change in exchange rate, and why I look at profit in terms of USD and not BTC.

Anyway, assuming no change in value, I don't see how a BFL ASIC ordered now would NOT turn a net profit eventually (in both BTC and USD), unless there are additional delays beyond their projection of shipping all current preorders by September.  

But, back to the profit.  Let's say that you are correct, that difficulty is 60,000,000 by the time you receive your shiny new 50GH/s BFL miner.  

You spent 24 BTC on it.  The miner, at 60,000,000 difficulty, makes 12.74 BTC/month.  Also have to assume that difficulty is continuing to rise, and I'm not going to do the calculus, but just assume that difficulty went up 25% and you manage to pull out 10 BTC of the first month.  Next month, same thing - difficulty went up 25% over the course of the month, and you get another 8 BTC.  Etc, etc, making 6.5 BTC, 5 BTC, 4.5 BTC in the following months.  After just the first 3 months, you've already recovered your original BTC amount.

The only reason difficulty would continue to go up is if people continued to buy miners.  The only way people would continue to buy miners is if they deem it to return a reasonable profit.  Do you think 4.5 BTC/month (and potentially declining) on a 24 BTC purchase is a reasonable profit?  I do, but many people certainly don't - not in the volatile world of Bitcoin, anyway.  So people like would start dropping out of purchases of miners when the singles start only making 6 BTC a month, or 4.5 BTC a month, or whatever number you want to use.  But that still leaves the people who did buy them a net profit after 6 months or less, and it means difficulty would largely stagnate and stop increasing.

I would even wager on a bet that a BFL SC Single would eventually pay itself off in either USD or BTC, electric costs included, if purchased today.

Well, no one told me we were looking at profitability with regards to BTC.    That's a whole different ballgame, and all bets are off if you look at it that way!  If the price drops drastically, you could see a net profit in BTC quite easily while maintaining a net loss in USD, but if the price increasing drastically, you'd likely never see a profit on your investment vs just investing in BTC directly, while your USD profit would be through the roof.

Sure, I agree with you - people will only continue to buy them while they produce a reasonable amount of profit.  But my point still stands - people will stop buying them when they produce an unreasonable profit.  Which means they will always make a reasonable profit, notwithstanding improvements in the technology that give lower costs or more efficient mining.  Even with newer technologies, these older ASICs would likely still be profitable, just not reasonably profitable.

What you consider a reasonable profit and what a large scale mining operation with cheap electricity in another country consider a reasonable profit are completely different.

If your SC Single is only making a dollar a week, is it profitable for you? Probably not, but it might be for someone else who has 10,000 singles running for nearly free electricity.

Even at 400M difficulty and .15 $ per kwh you'd only have to theoretically produce 29GH/w (more if you use a pool) to cover electricity costs, the Jalapano gets around 133GH/w so the 50GH unit probably has 120-130 GH/w efficiency due to more chips and stuff.

So there is no reason for them to stop taking orders as their units will be useful for a while.

You're wrong.

People will stop buying new miners when new miners stop being profitable.  But as I calculate it right now, it would take 818,325 of BFL's SC Singles to be in use before mining becomes unprofitable at $0.08/kwh, not taking into account any unit depreciation.  Given that BFL only had 75,000 chips produced in their first run, and that those 75,000 chips would only be enough to produce 4,687 SC Singles, I'd say that we're quite far from that happening even when taking all the other ASIC vendors into account.

Sure, we're moving away from the prospect of making ridiculous daily amounts of Bitcoin from one device, but we are still very far above the level of a reasonably sane return on investment.

New group buy price for the USB block erupters is about 1 btc (not advertising for them, just sayin).

So, at the new price, assuming starting current difficulty, you'll make 1 btc in 5-6 months, depending on difficulty increases all the way to 40 million ish...

After that, my crystal ball gets cloudy, grasshopper.

Cool.

Should I sell on ebay? lol