[2014-9-29] Ars Technica - FTC: Butterfly Labs mined bitcoins on customer miners

[CoinMode]

source: http://arstechnica.com/tech-policy/2014/09/feds-butterfly-labs-mined-bitcoins-on-customers-boxes-before-shipping/

Butterfly Labs also custom-ordered red foam pitchforks/torches that made fun of their customers and Asian people. See picture below.

[ebliever]

Interesting. A similar article on Coindesk mentions a "2 day" burn-in instead of a planned 10-30 minute burn-in. During the burn-in testing the machines were mining with the profits going to Butterfly. 2 days is excessive. We do 2.5-4.5 hour burns on safety-critical automotive modules (airbag crash sensors and braking control modules, etc.), for comparison. 10-30 minutes seems hardly worth the bother though, so that figure might be off.

I'm a quality engineer in the automotive electronics industry. Burn-in is an absolutely standard process. It is simply where you run a newly produced piece of equipment to try to force any manufacturing defects to fail before you ship to the customer. In my industry you typically run it over a temperature cycle (-40C to +85C, or +105 or +125C depending on a component's location in a vehicle) to further exercise the device.

I've always assumed that (1) all mining manufacturers did burn-in, and (2) that they did real mining during the burn-in and kept the profits. I mean, why throw away an opportunity? That said, every manufacturer should publicly share the duration of it's burn-in process and it should be documented for verification in ISO9000 and similar industry audits. The opportunity for abuse here is too obvious, so demanding some transparency and asking auditors to pay attention to this detail of their operations is a reasonable demand. And by the same token, customers should request/demand that the manufacturers be ISO9000 certified or equivalent, to provide an opportunity for 3rd party auditors to verify the process is not being abused.

[POM]

Interesting. A similar article on Coindesk mentions a "2 day" burn-in instead of a planned 10-30 minute burn-in. During the burn-in testing the machines were mining with the profits going to Butterfly. 2 days is excessive. We do 2.5-4.5 hour burns on safety-critical automotive modules (airbag crash sensors and braking control modules, etc.), for comparison. 10-30 minutes seems hardly worth the bother though, so that figure might be off.

I'm a quality engineer in the automotive electronics industry. Burn-in is an absolutely standard process. It is simply where you run a newly produced piece of equipment to try to force any manufacturing defects to fail before you ship to the customer. In my industry you typically run it over a temperature cycle (-40C to +85C, or +105 or +125C depending on a component's location in a vehicle) to further exercise the device.

I've always assumed that (1) all mining manufacturers did burn-in, and (2) that they did real mining during the burn-in and kept the profits. I mean, why throw away an opportunity? That said, every manufacturer should publicly share the duration of it's burn-in process and it should be documented for verification in ISO9000 and similar industry audits. The opportunity for abuse here is too obvious, so demanding some transparency and asking auditors to pay attention to this detail of their operations is a reasonable demand. And by the same token, customers should request/demand that the manufacturers be ISO9000 certified or equivalent, to provide an opportunity for 3rd party auditors to verify the process is not being abused.

Interesting..

[mercistheman]

The BFL financials should be very interesting... my guess is huge amounts of btc has been transferred until the dust settles.

[vancsj]

I've always assumed that (1) all mining manufacturers did burn-in, and (2) that they did real mining during the burn-in and kept the profits. I mean, why throw away an opportunity? That said, every manufacturer should publicly share the duration of it's burn-in process and it should be documented for verification in ISO9000 and similar industry audits. The opportunity for abuse here is too obvious, so demanding some transparency and asking auditors to pay attention to this detail of their operations is a reasonable demand. And by the same token, customers should request/demand that the manufacturers be ISO9000 certified or equivalent, to provide an opportunity for 3rd party auditors to verify the process is not being abused.

Good point.
Here's my 2 cents: The coins mined during burn-in belong to the customers if the shipping is already delayed.

[ebliever]

FWIW, one other piece of info: when I ordered my mining rig from CyberpowerPC, I do recall being greatly annoyed when I learned they were taking 2 days to do a burn-in, according to their status emails. (I paid $160 in expedited shipping charges based on the mining profits/day at that time, only to find that the "ship time" they listed didn't include the 2 day burn... then UPS failed to deliver after knocking on a side (garage!) door rather than our front door while 5 people were home, then a snowstorm delayed delivery 2 more days... but I digress.)

Point being, there may be some basis for a longer burn in consumer electronics, though why that should be the case baffles me. Anyone with experience in consumer electronics assembly care to comment?

[hacknoid]

I've always assumed that (1) all mining manufacturers did burn-in, and (2) that they did real mining during the burn-in and kept the profits. I mean, why throw away an opportunity? That said, every manufacturer should publicly share the duration of it's burn-in process and it should be documented for verification in ISO9000 and similar industry audits. The opportunity for abuse here is too obvious, so demanding some transparency and asking auditors to pay attention to this detail of their operations is a reasonable demand. And by the same token, customers should request/demand that the manufacturers be ISO9000 certified or equivalent, to provide an opportunity for 3rd party auditors to verify the process is not being abused.

Good point.
Here's my 2 cents: The coins mined during burn-in belong to the customers if the shipping is already delayed.

That is exactly what should happen - if the coins are ever recovered.  I would love to see the "discovery" of 10s of thousands of BTC in BFL wallets.

It certainly should be possible (if they were found) to determine the shipping delays and the product ordered, and use that as a basis for ratios of coins to be distributed to customers.

Ooo how this whole thing makes me angry!

[vancsj]

That is exactly what should happen - if the coins are ever recovered.  I would love to see the "discovery" of 10s of thousands of BTC in BFL wallets.

It certainly should be possible (if they were found) to determine the shipping delays and the product ordered, and use that as a basis for ratios of coins to be distributed to customers.

Ooo how this whole thing makes me angry!

So you ordered products from them ?

[LiteCoinGuy]

they can go on with scamming! wohoo!

http://www.coindesk.com/butterfly-labs-resume-limited-business-operations/

[hacknoid]

That is exactly what should happen - if the coins are ever recovered.  I would love to see the "discovery" of 10s of thousands of BTC in BFL wallets.

It certainly should be possible (if they were found) to determine the shipping delays and the product ordered, and use that as a basis for ratios of coins to be distributed to customers.

Ooo how this whole thing makes me angry!

So you ordered products from them ?

No, of course not - I'm just an innocent bystander!     I would have had to have been an IDIOT to actually order from these guys...

Fool me once...

[ebliever]

I've always assumed that (1) all mining manufacturers did burn-in, and (2) that they did real mining during the burn-in and kept the profits. I mean, why throw away an opportunity? That said, every manufacturer should publicly share the duration of it's burn-in process and it should be documented for verification in ISO9000 and similar industry audits. The opportunity for abuse here is too obvious, so demanding some transparency and asking auditors to pay attention to this detail of their operations is a reasonable demand. And by the same token, customers should request/demand that the manufacturers be ISO9000 certified or equivalent, to provide an opportunity for 3rd party auditors to verify the process is not being abused.

Good point.
Here's my 2 cents: The coins mined during burn-in belong to the customers if the shipping is already delayed.

I like that idea. It would be a good "customer-friendly" initiative that would really score well with people, if when ordering a mining rig the company asked for a BTC address, and then arranged for that address to receive the proceeds of the burn-in cycle. It would be fairly simple to implement and would make any company that did it really stand out from the competition, until they all gave in and did it. Plus if there are delays due to any quality issues that resulted in multiple burn-in cycles, the buyer would receive some compensation for the delay.

[vancsj]

No, of course not - I'm just an innocent bystander!     I would have had to have been an IDIOT to actually order from these guys...

Fool me once...

I tried to order once, but failed to pay...should I rejoice that I didn't have enough money at that time? lol...

[vancsj]

I like that idea. It would be a good "customer-friendly" initiative that would really score well with people, if when ordering a mining rig the company asked for a BTC address, and then arranged for that address to receive the proceeds of the burn-in cycle. It would be fairly simple to implement and would make any company that did it really stand out from the competition, until they all gave in and did it. Plus if there are delays due to any quality issues that resulted in multiple burn-in cycles, the buyer would receive some compensation for the delay.

There's not much future goods in mining rig market now, mostly spot goods, so the burn-in cycles doesn't matter much I think:)

[hacknoid]

No, of course not - I'm just an innocent bystander!     I would have had to have been an IDIOT to actually order from these guys...

Fool me once...

I tried to order once, but failed to pay...should I rejoice that I didn't have enough money at that time? lol...

In a word... yes.    If for no other reason than you avoided all the drama involved!

[vancsj]

In a word... yes.    If for no other reason than you avoided all the drama involved!

I knew little about bitcoin back then!