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Author Topic: Butterflylabs Huge SCAM  (Read 376078 times)
Twerka
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April 07, 2013, 09:12:06 PM
 #361

Why should i sell to the public a machine capable of giving me the same amount of money it cost in only a month?

The only reason is, if the investigation cost to produce is very high, selling SOME machines before they are ready give them money to keep investigating. After the machines are ready, I deliver the ones I sold and keep all the rest I can produce.

Example:
I can create a machine which produce 10 dollars a day. It cost me 10 dollars to create it (investigation), and 1 dollar to ensamble). I have only 1 dollar.
I sold 10 machines at 2 dollars each (you can recover the money in less than 5 hours).
Now I have 21 dollars, pay 10 for "one time investigation", and 11 to create 11 machines.
I deliver 10 machines (already paid), and keep one machine.

Now I have 0 dollars, and a machine capable of giving me 10 dollars a day. Produce each machine cost me 1 dollar. So I can keep producing machine FOR ME (no sense to sell them).
The people, (buyers) has his machines (10 machines sold) and are incapable of buying more, because I'm not selling.


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The only way to say I'm wrong is if the developer thinks the bitcoin is a bubble and it's going to explode, so prefer the dollars over the bitcoin produced by machines.

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jml
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April 07, 2013, 09:30:02 PM
 #362

Why is it a mistake in pulling back on a pre-order? You have been charged for something that doesn't exist yet.

You are given 45 days to open a claim with paypal.

https://www.paypal.com/helpcenter/main.jsp?t=solutionTab&ft=homeTab&ps=&solutionId=163596&locale=en_GB&_dyncharset=UTF-8&countrycode=GB&cmd=_help&m=BT

Quoting from the website

"You can open a dispute in the Resolution Centre of your PayPal account within 45 days of payment if:

-You don’t receive the item
-You receive an item but it’s significantly different than the description on eBay or on the seller’s website.

Notes:

-Generally buyers must wait at least seven days from the date of payment to escalate a dispute for an item not received
-If you don’t resolve or escalate a dispute within 20 days it will be closed. When this deadline is approaching, we will remind you by email
-A closed dispute cannot be reopened or escalated to a PayPal claim
-Only one dispute may be opened for each PayPal payment
-Where an item has not been received, please ensure you have given the seller enough time before opening a dispute, you have up to 45 days from the day of transaction to do this."


In my case, I did not receive the item and I was already close to my "limited 45 days" with no signs of life from BFL. Power requirements have changed and there is nothing explicit being mentioned on what are the power requirements for the ASIC's. Because there is a change in power requirements, this changes the contract conditions of what you paid for; i.e. 1 GH / 1 Watt.

Take this website as an example: http://www.toywiz.com/ourpreorpol.html

They have a policy that if you order a product, you will not be charged until the item is ready to be shipped. I understand that in this context, we are not dealing with toys, but the same applies to any product sold by any merchant. Ideally, a customer's money should be withdrawn until the item is ready to be shipped.

Amazon has a pre-order policy:

http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=10338651

"You can place an order for one of these items in the same way as you'd order anything else. We won't charge your credit or debit card until we dispatch the order."

Start up companies such as pebble smart watch (started with crowd sourcing via kickstarter) and the neptune smart watch which are expensive pieces of technology accept pre-orders and will invite reserved customers to pay for their watches:

http://getpebble.com/
http://www.neptunepine.com/

So my question is, why can't BFL do the same?

"Everything is a matter of degree"
miner5831
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April 07, 2013, 10:43:35 PM
 #363

Correct me if I'm wrong (seriously, please do - I don't remember where I read this) but isn't there a law in both the US and Canada that effectively states it's illegal to charge someone for a product until it's ready to ship? Or perhaps it was more to the effect of it's illegal to use preorder payments to fund the manufacturing of a product.

I have no source to back myself up on this, I just vaguely remember reading at one point. But *if* that happens to be the case, and that's what BFL is doing, isn't that a wee bit of a problem?
jml
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April 07, 2013, 10:54:33 PM
 #364

@miner5831

http://wiki.answers.com/Q/Is_it_legal_to_charge_a_credit_card_before_shipping_the_product

It says the following:

It is technically legal, but it isn't good business!! Most companies only charge when they ship. It is against VISA and MasterCard's regulations for a merchant to bill their cards prior to shipping.

Contrary to what some sources indicate, the Fair Credit Billing Act does not address if it is legal for a company to charge you before shipping the product. Instead, it makes it illegal to not ship within advertised time period (or 30 days if no expected shipping date is mentioned in the agreement). If a merchant says "this item takes 90 days to ship", then they may bill right away and not have a legal problem if they ship before the 90 day window.

You might want a US based lawyer to confirm this though, but reading on this, BFL have been breaking the Fair Credit Billing Act as they have delayed shipping dates.

More information can be read here http://www.consumer.ftc.gov/articles/0219-fair-credit-billing

Complaints
The Federal Trade Commission (FTC) enforces the FCBA for most creditors except banks. If you think a creditor has violated the FCBA, file a complaint with the FTC. https://www.ftccomplaintassistant.gov/

You also can sue a creditor who violates the FCBA. If you win, you may be awarded damages, plus twice the amount of any finance charge — as long as it's between $500 and $5,000, or higher amounts if a pattern or practice of violations is established. The court also may order the creditor to pay your attorney's fees and costs.

If possible, hire a lawyer who is willing to accept the amount awarded to you by the court as the entire fee for representing you. Some lawyers may not take your case unless you agree to pay their fee — win or lose — or add to the court-awarded amount if they think it's too low.

"Everything is a matter of degree"
Gator-hex
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April 07, 2013, 11:00:04 PM
 #365

If they don't deliver the goods soon you could use this law.. http://en.wikipedia.org/wiki/Mail_and_wire_fraud

You might also like the research the criminal history of Sonny Vleisides https://bitcointalk.org/index.php?topic=110786.0

One count of mail fraud, parole ends September 2013, I believe.

jml
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April 07, 2013, 11:03:04 PM
 #366

True, but isn't the CEO already convicted of mail & wire fraud?

"Everything is a matter of degree"
big pete
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April 07, 2013, 11:05:39 PM
 #367

If the don't deliver the goods you could use this law.. http://en.wikipedia.org/wiki/Mail_and_wire_fraud

You might also like the research the criminal history of Sonny Vleisides https://bitcointalk.org/index.php?topic=110786.0

the BFL's are never coming out, and by the time they do (if they do) they will be as useful as mining as a atom netbook

at least with ATI's you can play games with them when mining becomes too hard Smiley
jml
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April 07, 2013, 11:10:15 PM
 #368

I think I'll stick with FPGA mining for now; far safer than ASIC's!

"Everything is a matter of degree"
btcminer021
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April 07, 2013, 11:34:34 PM
 #369

If you pay with credit card, you can call the CC company and dispute the charge. They will credit your account and the amount will be removed from your next bill (or they can mail you a check after their investigation). The seller (merchant) almost never wins in an investigation.

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jml
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April 07, 2013, 11:52:17 PM
 #370

So what about the customers who have paid with bitcoins? Can anyone offer some input on this if BFL has issued refunds for those who have paid in BTC?

"Everything is a matter of degree"
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April 07, 2013, 11:54:20 PM
 #371

If they are scam why would they no longer accept mini rig orders? That's their biggest pay day.

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jml
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April 08, 2013, 12:03:41 AM
 #372

They state that all minirigs have been sold out. Personally, I think the minirig is out of the reach of many typical miners and perhaps they focused more on cheaper variants. But do they exist?

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April 08, 2013, 12:14:23 AM
 #373

I know. But if they were scam why would they stop taking mini rig money? A scam company would want to bring in a much as possible till the very end. Especially if we're talking about 30K a pop.

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Minor Miner
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April 08, 2013, 12:16:23 AM
 #374

They state that all minirigs have been sold out. Personally, I think the minirig is out of the reach of many typical miners and perhaps they focused more on cheaper variants. But do they exist?

They probably pulled the mini rigs because they are not physically possible to make.   Think about how much heat would be coming from 9000W inside that little tin box.    The fans would do nothing (other than fan the flames so to speak)


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jml
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April 08, 2013, 12:37:09 AM
 #375

Yes, possibly due to that they underestimated the power needs of a minirig and has poor air circulation. Its just a box with fans Cheesy

"Everything is a matter of degree"
alexh
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April 08, 2013, 12:49:55 AM
 #376

I hope they aren't. A friend of mine acutally purchased stuff for nearly $5000.
jml
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April 08, 2013, 01:01:27 AM
 #377

I would never have invested that amount of money with such large risks. Did he pay via cc or btc?

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April 08, 2013, 01:20:35 AM
 #378

They state that all minirigs have been sold out. Personally, I think the minirig is out of the reach of many typical miners and perhaps they focused more on cheaper variants. But do they exist?

They probably pulled the mini rigs because they are not physically possible to make.   Think about how much heat would be coming from 9000W inside that little tin box.    The fans would do nothing (other than fan the flames so to speak)


Yep, it's likely due to cooling issues.  I'm planning on running mine via an exotic cooling setup, without the box cover.  Leaning towards an aquarium setup using mineral oil, something like this

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jml
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April 08, 2013, 01:51:39 AM
 #379

Nice fish tank! Maybe you can add battery operated fish that swims around for an extra hashing power! Tongue

EDIT
====
http://www.amazon.com/Petquarium-Battery-Operated-Animated-Fish/dp/B002NEWCC0

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April 08, 2013, 02:31:33 AM
 #380

Yep, it's likely due to cooling issues.  I'm planning on running mine via an exotic cooling setup, without the box cover.  Leaning towards an aquarium setup using mineral oil, something like this http://images.bit-tech.net/content_images/2010/12/mod-of-the-year-2010/g1-1280x1024.jpg

Isn't the problem with mineral oil that you can't cool it off after it heats up, making it a bad idea for a 24/7 machine like a miner?
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