Those are pretty bad examples because they generally don't have a network effect (except to a minor extent phones and tablets although the ease of cross platform development has diminished that).

Some examples of early first mover products with network effect would be:
ebay - sure ebay sucks but competitors really couldn't break in because more users = more value and that is hard to beat.
paypal - same thing.  people love to bash paypal but surprisingly there is no paypal killer (not talking about Bitcoin just some "better" or less sucky centralized alternative.
gold - picked as commodity money for its properties (divisibility, inert, malliable, etc) however among commodities it is far from the most rare but it lasted due to inertia.
TCP/IP - what a clunked together protocol.  horribly ill suited for modern networks (the overhead of small packets of gigabit speed WAN links is insane) but it remains because it would be disruptive to change.
POTS (plain old telephone) - ancient, insanely expensive, low tech and although it is dying (slowly) it lasted decades despite the possibility of something superior replacing it.

All of these benefit from a network effect.  The more people using it, the more valuable the system becomes.  Bitcoin isn't software, it isn't even a service. Bitcoin is a protocol.  There is software than runs the Bitcoin protocol, and there is services which use that software but as a protocol Bitcoin simply needs to be useful enough to lay the foundation.
 
As far as Bitcoin being nothing but mining.  I would point to things like bitpay.  bitpay is one of those behind the scenes "boring" companies which unlock value.  It allows people to accept Bitcoins easily.   That adds to the network effect.  If a company can use bitpay to accept Bitcoins easily and other alternatives are harder and almost every potential customer who has "a" cryptocurrency has "the" cryptocurrency then there is little value in accepting alternatives.  It reinforces that compounding network effect.

I often get misquoted so to be clear.  I am not saying Bitcoin can't be replaced.  It certain can.  The network effect is a barrier to entry it isn't a force field.

Who said include a PSU?  Just make the case large enough to fit a PSU (preferably with ATX PSU mounting bracket/plate).  Then ship without a PSU and let the buyer supply their own.  I mean come on that is a silly rebuttal.  Right?  We are talking a case made of the exact same material (probably by the same company) that just happens to be 3" wider and can mount a user supplied PSU.  Better make it rackmount chassis dimensions so it can be properly mounted in a rack without the need for shelves.   Are you really going to argue it would be worse to do that? 

Or as an option supply a barebones kit (just ASICs and control board, user supplies everything else for $200 less and reduced shipping).  I probably am a weirdo but this option would be awesome.  Let the user supply "off the shelf" what can be supplied off the shelf.  Brings some of the hobbyist aspect back.  I would imagine there would be a lot of threads on best parts, designs, etc and includng additions to the always popular "photos of your mining rig" thread.

Anti-flame disclaimer:  I am not saying KNC sucks, this means they don't know what they are doing, don't buy it, or it can't work with an external PSU.  It just seems like an oversight, and one which has a rather simple solution.

on edit: modified for clarity and brevity

I think this is an important distinction.  While the term miner is casually used if you are a worker for a traditional mining pool you really are a contracted provider of computing power, nothing more.  You provide x units of computing power and in return the pool provides you a contracted reward (based on pools reward method). 

Using the term "miner" to refer to both those creating the coinbase tx (and rest of block structure) and those who merely attempt to find a solution to that problem is vague at best.  This may have implications beyond just network security.  FinCEN's guidance on miners (as illogical as it may be) puts a distinction on the entity "creating" currency units.  A legal argument could be made that Satoshi created all the currency units and miners (true miners, pools, solominers, p2pool members) are merely being rewarded them for block completion.  However even if that argument fails it would seem that pool workers wouldn't be creating currency units regardless.

KNC doesn't use water cooling* and they decided to make the case too narrow to fit a PSU inside. I guess making the case 3" wider would have put it over budget.


*Well not stock although if it can be cooled by a standard air-cooled CPU heatsink then swapping it out for water cooling should be pretty trivial. 

When you try to spend then the wallet continually reports it will be included in a block "in two weeks (TM)".

A collision with reality?

Luck of the pool will affect the pools overall earning.  If the pool is earning less then your 'split' of the pool's reward will be less too.

There is no such thing as the "correct price".  The correct price is what the market is willing to pay.  I do think that demand is going to dry up in face on the reality of ever increasing difficulty. I wonder if AsicMiner can still move them in volume if they cut the price to 0.1 BTC ea and if so are they making a profit at that price.

As for the $5 being the "correct" price are you willing to sell me your BE for $5?  I get the feeling when people say things like "this ASIC should be $x" they only mean they would buy not sell at that price. Of course if that truly is the correct price they would be happy to sell theirs off at fair value. 

Why wouldn't you persue recourse through state's attorney generals office or FTC?  With a private lawsuit the best you could hope for is "winning" in 3-12 months where winning means spending more in legal fees than you could ever hope to recover.

In a sane world you would be right but sadly I think you will be wrong.  My guess is they get enough pre-orders within a week.

7970 is 250W,  7990 is 375W.  They are also designed by AMD with 3 decades of experience.  The 7990 was delayed 6 months due to issues AMD had with power/cooling.

What is spurious about BFL having to respond to unlawful attempts to deny refunds.   BTW BFL doesn't have to respond to FTC investigations they can simply comply with the UCC and offer refunds on uncompleted orders.

BFL saying "all sales are final"* is fine however under the UCC a SALE involves the transfer of ownership of the contracted good (in this case mining hardware). If you take contracted funds and haven't yet delivered** the goods then a sale hasn't yet occurred, you only have a funded sales contract.  A company can't choose to both not complete the sale and refuse a refund on the unfilled sales contract.

So the idea that BFL would be held hostage is silly.  If they are held hostage to the FTC it is only by their own choosing.


* As a contrast here are some legitimate example protected by "all sales are final".
a) a customer waits until BFL ships a product and then asks for a refund because difficulty is too high.  
b) a customer refuses delivery of a BFL product (and hasn't prior to shipping requested the order be cancelled).  
c) customer receives a minirig and realizes (due to lack of customer due diligence) it is too loud or hot and wishes to have it returned for a refund.
d) customer has a BFL single "die" after taking delivery and it is outside warranty period (or BFL isn't offering a warranty)

In these examples BFL would be legally allowed to refer the customer to "all sales are final" clause and the customer would have little legal recourse.  If they didn't like the policy they shouldn't have purchased the product.

** In most cases shipment by the seller to the buyer by a common carrier constitutes a transfer of ownership.  The seller does not need to wait until physical delivery to consider the sale completed.  

Ok chalk it up to a relatively cheap lesson learned.  ASICs are anywhere from 100x to 1000x as efficient as GPUs.  Difficulty is going to keep going up and up and up and up.   Difficulty 1 billion (you will make ~1/20th per day that you do now) is certainly possible and probable over the next 6-12 months.  It all depends on how irrational miners are and how much ASIC manufacturers discount prices, and how efficient (MH/W) the 28nm chips end up being.  Worst case (from miner perspective) a difficulty of 2.5 billion (50x current value) is likely an upper bound (probably won't happen but certainly possible).

This.  A board with lower wattage, hashing power, and cost makes perfect sense in all areas but one.

If BFL needs money flowing in (not out) then offering something like 100 GH/s card @ 87W and $899 won't help.

Someone with a 60GH single ($1500?) would likely hedge their bets asking to upgrade it to 100 GH/s card and get a partial refund.  Even those who truly upgraded to say 2 cards would only mean a token amount of new money $300 coming in.

The stupidly high wattage, high price single offering (w/ 10% upgrade fee as an added insult) is designed to ensure most upgrades will result in significant additional revenue.  This is what BFL needs and why the next gen was offered like this.  It also leaves though who don't upgrade in a tight spot.  If competitors don't make your un-upgraded BFL rig obsolete (and a net negative profit), BFL own 2nd gen product will. 

Damned if you do, damned if you don't.   The smart thing to do would be to seek a refund.  No BFL "all sales are final" have no merit when they haven't yet shipped and have missed their own shipping schedule.  A sale occurs when money AND product change hands.  BFL doesn't have sales, they have orders and the UCC doesn't allow "all orders are final w/ no exemptions for non-delivery".

My guess if BFL is betting that most users will opt to upgrade rather than cancel.

Initially the release said ONLY 5V (as in no 12V connector) which is what resulted in confusion for the first half of the thread.

Yes that is the standard for information security.  Don't follow established practices just do anything you feel like no matter how stupid (and pointless).   The fact that other sites (hundreds, thousands?) have made the same mistake and you can't undo it after the hack should just be ignored.  The absence of a hack means you are secure right?  That works right up until a hack does occur and then it is "oh well in hindsight who could have seen the hacker would decrypt the password list".  

Your statement is like saying you leave your door unlocked with a sign saying "money inside".  You haven't been robbed yet so it must be secure and anyone who says locking your door would be more secure should just try to rob you instead. 

Vampire Squids are the massive to big to fail banking entities (originally referred to Goldman Sach's specifically but now more generally) which exist to suck lifeblood out of the economy.  Not innovating, no creating, not improving the economy rather acting like a tax, a friction, a siphoning off a % of the overall wealth to the detriment of the overall system.   If you are the vampire squid you don't want ANYTHING to ever change.  The only two risks you face are actually killing the economy (sucked too much wealth out of the system) or true innovation allowing wealth to bypass you.

http://www.forbes.com/sites/jakezamansky/2013/08/08/the-great-vampire-squid-keeps-on-sucking/

You can't just compare Avalon's selling price and then triple that and pretend that somehow means anything.

Avalon's chips are only 275MH/s and 15mm @ 110nm.  Moving to 28nm (110/28)^2 would make the same Avalon chip 1/15th the size (or about 1mm2).  Of course nobody makes chips that small but Avalon could make the chip 15x larger and thus have 15x the hashing power for the same SIZE so something on the order of 4 GH/s (15 x 0.275 GH/s) and 15mm @ 28nm.  Still 4 GH/s isn't 500 GH/s.  With Avalon design you would either need to make the chip much bigger (and thus the cost per chip rises but the cost is per mm2) or use multiple chips to get a 500 GH/s miner.  You can't simply say oh Avalon chips are cheap (<$13) so lets triple that cost ($39) and pretend shrinking it to 28nm makes it a 500 GH/s chip and that makes it ($39/500) $0.19 per GH/s.  

You pay per wafer, the wafer is a certain size, the size of your chip determines how many chips per wafer.  Wafer cost / number of chips per wafer = chip cost.  Bigger chip = bigger % of the wafer = higher cost per chip.  The cost per GH/s depends only on wafer cost AND GH/mm2.

Your math was just utter nonsense.  It is like saying a day is 24 hours and a gallon has 4 quarts so the cost of a beer is 4/24 = $0.16, any beer (regardless of if it is a small glass or giant flagon) can't possibly cost more than $0.16.

Until we see Cointerra's dimensions it is hard to say.  As for looking up the price of silicon, make sure you are looking at the cost of a printed wafer.  Blank wafers are used by FABs to print chips.  Those 28nm FABs costs billions to build and have a limited economical lifespan.  The price of raw silicon is pretty irrelevant.

Still I don't really care enough.  If people want to wait for sub $1 per GH/s assembled miners well let them.  I don't own any of these companies.

Your comparing apples to oranges.  Unless you OWN a fab your price isn't a blank silicon wafer, it is a printed silicon wafer.  No company with a 28nm FAB is offering small runs @ $500 a wafer.