Butterflylabs Huge SCAM

[becoin]

Can you elaborate a bit on the "long con" game reference?

It seems that BFL must have made a substantial investment
in producing a functiong ASiC and usable product.

From the very first days this startup started with a lie. They lied they have attracted VC!

I have never witnessed another "business" taking pre-orders ONE YEAR ahead, lying they have attracted venture capital, using customers money for R&D and treating their customers like investor to share the risk but without investor rights, refusing full bitcoin refunds, now they stopped all refunds, and lying all the time month after month that what they need is just two more weeks and everything will be okay! Have you?!

[1715021922]

1715021922

[1715021922]

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[becoin]

Channel your anger somewhere positive!

I'm positive. A lot of uninformed BTC world newcomers must be protected from BFL scam.

Just let go, you're feeding the monster!

Please, explain? Do you imply that crooks must rule bitcoin community?

[lucasjkr]

Can you elaborate a bit on the "long con" game reference?

It seems that BFL must have made a substantial investment
in producing a functiong ASiC and usable product.

From the very first days this startup started with a lie. They lied they have attracted VC!

I have never witnessed another "business" taking pre-orders ONE YEAR ahead, lying they have attracted venture capital, using customers money for R&D and treating their customers like investor to share the risk but without investor rights, refusing full bitcoin refunds, now they stopped all refunds, and lying all the time month after month that what they need is just two more weeks and everything will be okay! Have you?!

Sock puppet here. Except I'm unaffiliated and not getting paid. Buy that's besides the point.

BFL seems to be the only complany to date that put sizable numbers of Fpgas in miners hands. And even today, they are the only company that have shipped price competitive Asics in any large quantity.  Asicminer has shipped thousands, yes , but at price points where people can't ever hope to earn back their investment. Even BFLs units that haven't shipped have more of a chance at one day paying for themselves than those USB block eruptors. As for Avalon? Limited availability, much high price per hash and signficant delays as well. It's endemic. But BFL has been the only company with a track record of getting hashing power into miners hands at a reasonable cost. Delayed? Yes. Obviously. But making progress without doubt. I got mine, and if they weren't shipping at all, their forums would be ablaze with people saying they hasn't gotten their order from dates that BFL claimed to have shipped already.

[jordaninthesky]

Sock puppet here. Except I'm unaffiliated and not getting paid. Buy that's besides the point.

BFL seems to be the only complany to date that put sizable numbers of Fpgas in miners hands. And even today, they are the only company that have shipped price competitive Asics in any large quantity.  Asicminer has shipped thousands, yes , but at price points where people can't ever hope to earn back their investment. Even BFLs units that haven't shipped have more of a chance at one day paying for themselves than those USB block eruptors. As for Avalon? Limited availability, much high price per hash and signficant delays as well. It's endemic. But BFL has been the only company with a track record of getting hashing power into miners hands at a reasonable cost. Delayed? Yes. Obviously. But making progress without doubt. I got mine, and if they weren't shipping at all, their forums would be ablaze with people saying they hasn't gotten their order from dates that BFL claimed to have shipped already.

FPGAs, yes.  Your second point is deceptive.  They aren't the only company that have shipped price competitive ASICS, and definitely not in a large quantity.  I know right now it seems like BFL is the only choice for a few...  But since I've invested, BFL has always been too good to be true.  Maybe they built up stock and released a bunch in a day or something like that, but they are not yet at all consistent in any other terms than dissatisfying people, but still keeping them hanging on, learning to let go of the original opportunity they've signed up for.  Maybe they'll become consistent in a good way at some point, but don't think the nightmare is over yet for a lot of people.  As time progresses there will still be yet even more dissatisfaction, until all that is left are investors who signed up, knowing that BFL was already delayed for months to a year.  Who, maybe after months to a year, will be biting their tongue.

I was signing up with BFL when I had a window into Avalon's ASICs batch 1.   There are many who fell into BFL because of it its prominent advertising and its "reliability" on having released FPGAs.  

[Ytterbium]

"Never ascribe to malice, that which can be explained by incompetence."

I don't think that's a very good rule overall.  It's entirely possible for people be both incompetent and malicious at the same time.

Also, people can feign incompetence in order to get away with malicious behavior.  Look at how politicians say incredibly stupid things all the time. But most of them aren't actually stupid.  They're pretending to be stupid so they can get away with whatever it is they actually want to do.

[zumzero]

I wouldn't go as far as saying that BFLabs is a scam, however their inability to honour orders and feeble PR is somewhat annoying.  I have conceded that my 60gh single may only serve as a potential museum piece one day and will not turn out to be magic wand I fantasised about when I placed my Paypal order.

[jordaninthesky]

Nobody who is responsible can be scammed.  Nobody who is scammed, will want to admit they are scammed.  What BFL is doing is clever, interesting, and very much evil in the name of good.

[tinus42]

Nobody who is scammed, will want to admit they are scammed.

Reminds me of the guy who bought the Eiffel Tower from master con artist Victor Lustig.

Lustig took the men to the tower in a rented limousine for an inspection tour. It gave Lustig the opportunity to gauge which of them was the most enthusiastic and gullible. Lustig asked for bids to be submitted the next day, and reminded them that the matter was a state secret. In reality, Lustig already knew he would accept the bid from one dealer, Andre Poisson. Poisson was insecure, feeling he was not in the inner circles of the Parisian business community, and thought that obtaining the Eiffel Tower deal would put him in the big league.

However, Poisson's wife was suspicious, wondering who this official was, why everything was so secret, and why everything was being done so quickly. To deal with her suspicion, Lustig arranged another meeting, and then "confessed". As a government minister, Lustig said, he did not make enough money to pursue the lifestyle he enjoyed, and needed to find ways to supplement his income. This meant that his dealings needed a certain discretion. Poisson understood immediately. He was dealing with another corrupt government official who wanted a bribe. That put Poisson's mind at rest immediately, since he was familiar with the type and had no problems dealing with such people.

So Lustig not only received the funds for the Eiffel Tower, he also collected a large bribe. Lustig and his personal secretary, a Franco American con man Robert Arthur Tourbillon also known as Dan Collins, hastily took a train for Vienna with a suitcase full of cash.

Surprisingly, nothing happened. Poisson was too humiliated to complain to the police. A month later, Lustig returned to Paris, selected six more scrap dealers, and tried to sell the Tower once more. This time, the chosen victim went to the police before Lustig could close the deal, but Lustig and Collins managed to evade arrest.

http://en.wikipedia.org/wiki/Victor_Lustig

Be foolish enough with your Bitcoins and you might also be remembered in history as a gullible idiot like Andre Poisson.

[darkmule]

tl;dr for wall of text:  just cause people aren't suing BFL doesn't mean they're 100% legit.  Also they're not a total scam, at least not yet.

Nobody who is scammed, will want to admit they are scammed.

Reminds me of the guy who bought the Eiffel Tower from master con artist Victor Lustig.

Con artists are not necessarily individually very clever, but there has been a lengthy evolutionary process that determines which scams "survive" to be re-used, that is, the scams actually work and get money from people but the scammers don't get prosecuted.  The Nigerian scams and their evolution over time provide a very illustrative example.

First, the initial come-on, you would think, should actually be persuasive and convincing enough that most people don't reject it, but paradoxically, the exact opposite is the case.  Most Nigerian scams are absurd on their face and the vast majority of people instantly laugh and immediately ignore them without paying them a second thought.  

Why should this be?  Shouldn't these come-ons actually be enough to get most people to look?  Actually, no!  They should do exactly the opposite, and that's what they do.  The initial come-on is not intended to convince a "normal" person of its accuracy.  It is a sieving process, where the initial come-on actually weeds out the people the scammer will not succeed with, leaving only the pool of potentially gullible suckers.

This come-on actually serves the purpose of selecting a population for ongoing contact who is actually dumb enough to believe that some person they don't know is just contacting them out of the blue to give them an enormous amount of money for absolutely flimsy and unbelievable reasons.  And dumb enough not to give one chunk of money, but to keep paying more and more over time as the long con continues.

Now, BFL, to the extent it is a scam, is an entirely different one.  The target audience is not stupid.  In fact, the target audience is highly intelligent, since even being able to understand Bitcoin and that it's actually a legitimate thing that is worth real money in the real world requires a high degree of intelligence and knowledge of the technology and math.  

But they also have to be naive enough to believe some company totally out of nowhere, just because it starts out spouting the same rhetoric, taking money in advance for products that don't exist yet, is actually legitimate.  They have to not bother checking the company's principals (like Sonny) and look at how it's actually acting, and be willing to throw money at it in advance.  

This isn't stupidity, like some assholes have said.  There's greed involved, in that people wanted to sign up for this because Bitcoin is a huge money-making opportunity.  That part isn't a scam.  And also, there is absolutely nothing wrong with wanting to make money by getting into Bitcoin and advancing this awesome technology.  The financial reward is literally why this technology is bound to succeed, either in Bitcoin form or the form of some other cryptocurrency.

This is, to the extent it is a scam, an affinity scam, like when religious people rip off people of their own faith.  The "hook" is "hey trust me, I'm like you and I share the same beliefs" with a dash of "let's make lots of money."  This kind of scam is very destructive to a community precisely because it destroys trust.  In this case, BFL might have ultimately done us a favor, though.  Unless they actually waltz off with all the money, it isn't really a scam in the criminal sense.  It is more of a burn.  BFL got money that was better directed at more honest players like Avalon (who have been far from perfect themselves).  BFL got a huge batch of BTC that massively appreciated in value while their purchasers waited endlessly.  It is my belief that most BFL purchasers would have been better off doing nothing than pre-ordering from BFL.

But to get back to the Eiffel Tower guy, in the case of that dude, victims didn't call the police because they were embarrassed at being so stupid.  That is not really the case here.  Here, they actually still want the product, and it is actually still reasonable to believe that it will exist at some point and be shipped.

And actually taking these clowns to court, even though there is a good chance there's a cause of action (I've analyzed the legal issues fairly extensively here and on other threads), is a miserable option.  Lawsuits are horrendous, boring, expensive, and very often, at the end of them, the only people who made any money are the lawyers.  Be wary of any lawyer who is eager to go to court.  The best legal advice in the world is to stay out of court if at all possible.

While I wouldn't necessarily take my own advice there at all times, people not suing BFL for their endless bullshit does not mean BFL's actions are okay.  

[QuestionAuthority]

darkmule, don't discount the power of groupthink. If I say this is a good deal, you say this is a good deal and 50 other people follow us then the scam will succeed. Pirate earned himself many trips to Walmart using that philosophy. Intelligent, well educated, and supposedly business savvy individuals fall prey to groupthink just as easily as a high school drop out.

[Photon939]

It's beginning to look really ugly for anyone holding onto their BFL order that is not in the first month of orders. Jalapenos seem to be shipping at a decent clip but those who ordered singles/little singles/minirigs are being left in the dust.

BTC ROI for the little single I ordered (first week preorders were available) is now at the 6 month mark from my calculations.

[MyBestCoin]

We have all known BFL is a scam for the longest time

[lucasjkr]

It's beginning to look really ugly for anyone holding onto their BFL order that is not in the first month of orders. Jalapenos seem to be shipping at a decent clip but those who ordered singles/little singles/minirigs are being left in the dust.

BTC ROI for the little single I ordered (first week preorders were available) is now at the 6 month mark from my calculations.

Looks even worse for buyers of USB Block Eruptors. And they've actually received their product. Same for people buying Avalon units on eBay when they appear. The arms race is on and it's killing every devices ROI.

[becoin]

The arms race is on and it's killing every devices ROI.

On top of it, the BFL scam is in full swing killing whats left of their customers ROI.

[jordaninthesky]

That was redundant, but unfortunately also is BFL's strategies.  It seems like now even Josh is starting to play himself as a victim.  Whether or no the has financial incentive to do so, he is a superstar.  Congratulations to him for at least superseding Hollywood, not that it is much of a compliment in terms of efficiency.

[djbooth007]

BFL Not a scam in the true sense of the definition, but a massive disappointment to anyone dealing with this company.

When I finally receive my 4x60GH/s, I dont think I will have a return on the investment. Not while 1 BTC = $100 USD and increasing difficulty.
Will anyone here still continue to mine even if the return is negative? (ie, hoping for prices to increase enough in future to make up for it?)

[becoin]

BFL Not a scam in the true sense of the definition

Not true.

Are you saying that every BTC related scam is not a scam in the true sense of the definition because BTC is not money in the true sense of the definition? Is stealing BTC not a theft in the true sense of the definition because BTC is not money in the true sense of the definition? May be you forget that the "business" of Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, (March 3, 1882 – January 18, 1949) was not a scam in the true sense of the definition (by that time)? However, since then the word "ponzi" became a synonym for finance related scam. In the same way the word "butterfly" will become a synonym for BTC related scam!

...

The definition:

Scam - A fraudulent business scheme; a swindle

BFL is a scam from day one of its existence. It is more than obvious now that it was planned to be a scam from the very beginning.

[2710444516]

BFL has rotten.

[becoin]

It seems like now even Josh is starting to play himself as a victim.

Nothing new under the sun.



Charles Ponzi in 1920

Ponzi's rapid rise naturally drew suspicion. When a Boston financial writer suggested there was no way Ponzi could legally deliver such high returns in a short period of time, Ponzi sued for libel and won $500,000 in damages. As libel law in those days placed the burden of proof on the writer and the paper, this effectively neutralized any serious probes into his dealings for some time.

On July 24, 1920, the Boston Post printed a favorable article on Ponzi and his scheme that brought in investors faster than ever. At that time, Ponzi was making $250,000 a day. Ponzi's good fortune was increased by the fact that just below this favorable article, which seemed to imply that Ponzi was indeed returning 50% return on investment after only 45 days, was a bank advertisement that stated that the bank was paying 5% returns annually. The next business day after this article was published, Ponzi arrived at his office to find thousands of Bostonians waiting to give him their money.

The stories caused a panic run on the Securities Exchange Company. Ponzi paid out $2 million in three days to a wild crowd outside his office. He canvassed the crowd, passed out coffee and donuts, and cheerfully told them they had nothing to worry about. Many changed their minds and left their money with him. However, this attracted the attention of Daniel Gallagher, the United States Attorney for the District of Massachusetts. Gallagher commissioned Edwin Pride to audit the Securities Exchange Company's books—an effort made difficult by the fact his bookkeeping system consisted merely of index cards with investors' names.

On August 11, it all came crashing down for Ponzi. First, the Post came out with a front-page story about his activities in Montreal 13 years earlier—including his forgery conviction and his role at Zarossi's scandal-ridden bank.

Read more!
http://en.wikipedia.org/wiki/Charles_Ponzi#Collapse_of_the_scheme

[MooC Tals]

BFL is the best company to learn a life lesson from. Understand it and most of all study it.

Learn something from this.