Butterflylabs Huge SCAM

[charleshoskinson]

Right. Please explain how BFL lying for months on end about shipping dates and power consumption to make more money does not equal a scam. Bait and switch is a real verifiable scam mechanism.

http://en.wikipedia.org/wiki/Bait-and-switch

Even if the previously convicted felon that runs BFL does not abscond with the loot this is still a scam. People pre-ordering now will not break even because they'll not receive their products for several months, at which time difficulty will be several times higher than it is now. That is why FTC prompt delivery rules exist in the US. BFL is a US based company and is very clearly in violation of these rules.

http://business.ftc.gov/documents/alt051-selling-internet-prompt-delivery-rules

First, they are a small company developing a ASIC without any support from established manufacturers. The final product will vary as it has with every crowdfunded product.

Second, after ASICs take over the market. What will you mine with? Currently the ASICs on market are very expensive and difficult to get. BFL is the new AMD 5850. 

[roy7]

Second, after ASICs take over the market. What will you mine with? Currently the ASICs on market are very expensive and difficult to get. BFL is the new AMD 5850. 

I'm interested to see how small ASICs do, say, 1 year from now. Will everyone running GPU miners today own ASICs? Will GPU miners all move to litecon, leaving fewer actual people mining bitcoin?

[creativex]

Right. Please explain how BFL lying for months on end about shipping dates and power consumption to make more money does not equal a scam. Bait and switch is a real verifiable scam mechanism.

http://en.wikipedia.org/wiki/Bait-and-switch

Even if the previously convicted felon that runs BFL does not abscond with the loot this is still a scam. People pre-ordering now will not break even because they'll not receive their products for several months, at which time difficulty will be several times higher than it is now. That is why FTC prompt delivery rules exist in the US. BFL is a US based company and is very clearly in violation of these rules.

http://business.ftc.gov/documents/alt051-selling-internet-prompt-delivery-rules

First, they are a small company developing a ASIC without any support from established manufacturers. The final product will vary as it has with every crowdfunded product.

Second, after ASICs take over the market. What will you mine with? Currently the ASICs on market are very expensive and difficult to get. BFL is the new AMD 5850.

First, they are a small company developing a ASIC without any support from established manufacturers. The final product will vary as it has with every crowdfunded product.

BFL claims to have 22 employees, which constitutes a much larger company than any of their competitors. The final product can "vary", no problem, but the final products from BFL "vary" by hundreds of percent and mysteriously never in their investors' favor. BFL's FPGA products consumed 400% more power than advertised and their ASIC products will follow this trend and consume 5-6x the advertised 1w/Gh/s. Meanwhile BFL's much smaller competitors are somehow able to get their estimates nearly spot on.

Second, after ASICs take over the market. What will you mine with? Currently the ASICs on market are very expensive and difficult to get. BFL is the new AMD 5850.

I will mine with the Avalons I have on order. The ASICs on the market are very expensive *BECAUSE* of BFL's off the charts fail. Avalon batch one was $1299, Avalon batch two was $1500, Avalon batch three was priced in BTC after numerous Avalon pre-orders were auctioned on eBay for many times their original sale price. Seeing a trend? This happens because BFL has captured a huge portion of the market by lying for several months.

BFL is not even equal to an obsolete 5850, if you put your mind to it you could likely locate and purchase a 5850 for immediate shipping right this second, this is not true of BFL vaporware which cannot be purchased right this second from anywhere. Time to delivery is all that has mattered in the ASIC mining hardware market for several months and BFL and BTCFPGA are the only companies that have failed utterly to deliver. BTCFPGA folded.

[charleshoskinson]

BFL claims to have 22 employees, which constitutes a much larger company than any of their competitors. The final product can "vary", no problem, but the final products from BFL "vary" by hundreds of percent and mysteriously never in their investors' favor. BFL's FPGA products consumed 400% more power than advertised and their ASIC products will follow this trend and consume 5-6x the advertised 1w/Gh/s. Meanwhile BFL's much smaller competitors are somehow able to get their estimates nearly spot on.

I've worked on several VLSI projects and I can tell you firsthand that the CEO sent a very robust benchmark that is incredibly difficult to achieve. It was probably a mistake in hindsight; however, my AMD 7950 consumes over 100 watts of power and produces 500 MH/sec. They are offering a device that consumes about 30 watts (and yes the number is verified in my youtube link from a working unit) and has an order of magnitude higher hash rate.

I will mine with the Avalons I have on order. The ASICs on the market are very expensive *BECAUSE* of BFL's off the charts fail. Avalon batch one was $1299, Avalon batch two was $1500, Avalon batch three was priced in BTC after numerous Avalon pre-orders were auctioned on eBay for many times their original sale price. Seeing a trend? This happens because BFL has captured a huge portion of the market by lying for several months.

BFL is not even equal to an obsolete 5850, if you put your mind to it you could likely locate and purchase a 5850 for immediate shipping right this second, this is not true of BFL vaporware which cannot be purchased right this second from anywhere. Time to delivery is all that has mattered in the ASIC mining hardware market for several months and BFL and BTCFPGA are the only companies that have failed utterly to deliver.

I suspect a large chunk of the preorders went to develop the ASIC. Ever hear of kickstarter? Maybe the Ouya console? I agree with you that they are slow and poorly managed, but I do not believe they are a scam. BFL is positioned to own the ASIC market if they deliver. If they don't, I like everyone else who preordered will seek restitution and I will also launch a kickstarter to get ASICs designed in the open domain.

[yakka34]

They will ship someday, I'm sure of that. And when it happens difficulty will skyrocket through the roof. Destroying all non asic miners.

[sartech]

i dont think is a scam, they show us the jalapeno working.they will delivery all products to custumers

[charleshoskinson]

They will ship someday, I'm sure of that. And when it happens difficulty will skyrocket through the roof. Destroying all non asic miners.

And that's my point. ASICs will become the new GPU. With any market you have many players and some succeed, some fail. Remember Zilog?

[aandcmedia]

They are starting to send out developer units so it seems to actually be turning out semi-legit, although they have no idea what time tables are.

[jml]

Second, after ASICs take over the market. What will you mine with? Currently the ASICs on market are very expensive and difficult to get. BFL is the new AMD 5850. 

I'm interested to see how small ASICs do, say, 1 year from now. Will everyone running GPU miners today own ASICs? Will GPU miners all move to litecon, leaving fewer actual people mining bitcoin?

I reckon that the way things are going, bitcoin miners will be for those enthusiasts who has enough capital to fund ASIC devices ($1000+ p/m) (and future ASIC generation developments) or pay mining companies that are centralising hashing power which can be a bad idea; ref, 51% attack.

GPU technology was a slow market in terms of getting higher hashing rates so a miner was not threatened to upgrade within a short time span of acquiring the new hardware. With ASIC developments, it looks like it will be game changing.

Current GPU miners will be so disadvantaged that they may turn into litecoin mining or even force development of other crypto currencies that utilize GPU resources that ASIC's and FPGA's don't have.

[creativex]

I've worked on several VLSI projects and I can tell you firsthand that the CEO sent a very robust benchmark that is incredibly difficult to achieve. It was probably a mistake in hindsight; however, my AMD 7950 consumes over 100 watts of power and produces 500 MH/sec. They are offering a device that consumes about 30 watts (and yes the number is verified in my youtube link from a working unit) and has an order of magnitude higher hash rate.

Again...how is this not a bait and switch? BFL's original power consumption simulations were not "difficult to achieve", they were impossible to achieve across an entire product line. This is how one could tell it was pie in the sky fairy tale nonsense. Why do you seek to compare an unreleased ASIC vaporware product to a current GPU? BFL is not competing with AMD, they're competing with Avalon and ASICMiner, the two ASIC vendors that began their projects after BFL but have both deployed and/or shipped working ASIC mining gear well before BFL.

I suspect a large chunk of the preorders went to develop the ASIC. Ever hear of kickstarter? Maybe the Ouya console? I agree with you that they are slow and poorly managed, but I do not believe they are a scam. BFL is positioned to own the ASIC market if they deliver. If they don't, I like everyone else who preordered will seek restitution and I will also launch a kickstarter to get ASICs designed in the open domain.

They're clearly a scam. Funding a kickstarter project is known to carry risks. BFL investors were never properly informed of those risks. These pre-orders were sold as finished products with a clearly defined performance level(1Gh/s@1J) and delivery date(October 2012). Not only have they failed to meet either of these goals, they've repeatedly lied to investors to prevent competition and to slow the flow of refund requests. This is not mismanagement or incompetence it's fraud.

[creativex]

They will ship someday, I'm sure of that. And when it happens difficulty will skyrocket through the roof. Destroying all non asic miners.

Difficulty is already going through the roof due to Avalon and ASICMiner. The world does not wait for BFL investors who will see losses even if they eventually receive a product.

http://bitcoin.sipa.be/

[jml]

Difficulty has doubled since the beginning of March 2013 from approx 4*10^6 close to 9*10^6; meaning I am getting half the amount of bitcoins. The trend does look indeed that it will grow at a much faster rate as new ASIC miners hash away.

[charleshoskinson]

They're clearly a scam. Funding a kickstarter project is known to carry risks. BFL investors were never properly informed of those risks. These pre-orders were sold as finished products with a clearly defined performance level(1Gh/s@1J) and delivery date(October 2012). Not only have they failed to meet either of these goals, they've repeatedly lied to investors to prevent competition and to slow the flow of refund requests. This is not mismanagement or incompetence it's fraud.

I agree completely with what you are saying. BFL needs to deliver soon or else they have committed fraud. I do not have an issue with a delivery date being pushed back. Nor do I have an issue with a group of people building specialty hardware having problems fine tuning it completely. Intel at one point at a 10 GHz processor in their roadmap. The difference between a great company and a terrible company is how they manage setbacks and problems with their product.

As for the investment being impossible to recover. You have no way of knowing that. I ordered a 300 dollar unit. When it arrives, we'll see how much I make.

[jml]

They're clearly a scam. Funding a kickstarter project is known to carry risks. BFL investors were never properly informed of those risks. These pre-orders were sold as finished products with a clearly defined performance level(1Gh/s@1J) and delivery date(October 2012). Not only have they failed to meet either of these goals, they've repeatedly lied to investors to prevent competition and to slow the flow of refund requests. This is not mismanagement or incompetence it's fraud.

I agree completely with what you are saying. BFL needs to deliver soon or else they have committed fraud. I do not have an issue with a delivery date being pushed back. Nor do I have an issue with a group of people building specialty hardware having problems fine tuning it completely. Intel at one point at a 10 GHz processor in their roadmap. The difference between a great company and a terrible company is how they manage setbacks and problems with their product.

As for the investment being impossible to recover. You have no way of knowing that. I ordered a 300 dollar unit. When it arrives, we'll see how much I make.

If you used CC (120 days) or PP (45 days), you can recover the money. I did use PP and asked for refund as I did order a Jally in February. By then, shipping dates where between May/June or earlier like they always say.

[roy7]

If you used CC (120 days) or PP (45 days), you can recover the money. I did use PP and asked for refund as I did order a Jally in February. By then, shipping dates where between May/June or earlier like they always say.

Did they refuse to refund you? I've seen a number of threads here and on the BFL forums by people reporting they had no issues getting a refund from BFL when they requested one.

[creativex]

They're clearly a scam. Funding a kickstarter project is known to carry risks. BFL investors were never properly informed of those risks. These pre-orders were sold as finished products with a clearly defined performance level(1Gh/s@1J) and delivery date(October 2012). Not only have they failed to meet either of these goals, they've repeatedly lied to investors to prevent competition and to slow the flow of refund requests. This is not mismanagement or incompetence it's fraud.

I agree completely with what you are saying. BFL needs to deliver soon or else they have committed fraud. I do not have an issue with a delivery date being pushed back. Nor do I have an issue with a group of people building specialty hardware having problems fine tuning it completely. Intel at one point at a 10 GHz processor in their roadmap. The difference between a great company and a terrible company is how they manage setbacks and problems with their product.

You seem fine with just discounting every lie BFL has told since June of 2012 and coloring them all as miscalculations and setbacks, but saying you've "scheduled shipments" of 1Gh/s/w mining gear nearly every two weeks for months on end is not a miscalculation. Selling dozens of 1.5Th/s minirigs for $30k and then cancelling the entire product almost a year later without ever delivering one unit is not an error.  

As for the investment being impossible to recover. You have no way of knowing that. I ordered a 300 dollar unit. When it arrives, we'll see how much I make.

This is not some voodoo magic. Difficulty is a factor of network hashrate which is growing very rapidly and will continue to grow rapidly for several more months as more and more ASICs are deployed. ASICMiner has started to sell hardware directly to fill the ASIC hardware void(BFL) and has also said they'd deploy 55Th+ over the next couple months. Avalon will ship 600+ 66Gh/s mining units between now and May 5, when they will begin building batch 3 units. Most ominous however is the direct chip sales Avalon has begun to facilitate which will result in huge hashrate increases within months. All of this will ensure that anyone still waiting on their ASIC vaporware will be very hard pressed to ever see a return. This situation would have been bad enough for BFL investors if BFL had shipped what they sold(1Gh/s/w) mining gear, but that will not happen. Instead they'll ship gear that consumes 5-6x that amount of power, ensuring that their gear will become a net money loser and be unplugged much sooner. This fact alone makes it absolutely vital that your gear is in hand now, but that won't happen for months in the case of someone ordering from BFL now because of their backlog.

[tmbp]

Most ASIC companies realize they can mine themselves and spare the competition and only release their hardware once it is no longer profitable...

[charleshoskinson]

I get that you don't like BFL. I honestly haven't spent a huge amount of time thinking about the inner workings of the company. I order a 300 dollar piece of hardware in March. I'll see if it is delivered. If not, then we'll have a class action and the CEO will return to prison for fraud. He overpromised. Round 1 is over. As for the difficulty calculations, you don't know the impact the GPU miners turning off their rigs alongside the price increases the bitcoin experiences will have. I agree the difficulty will go up. But it is a mistake to say no money will come.

[Si Robertson]

Has BFL produced anything

[charleshoskinson]

yes. here is a review

http://www.youtube.com/watch?v=_6mmTRheUzg