And some more delays in BFL shipment plans / no shipment before 14th Jan 2013

[creativex]

They didn't lie, they had unexpected setbacks.  There's a difference.

I quite simply don't believe that. Josh is not stupid, he's a bunch of other things I won't get into right now, but he's not dumb. Therefore IMO continuing to suggest or even implying up until last week that BFL has any chance whatsoever to ship finished ASIC products in 2012 is intentional deception in my book and Josh/Inaba is not the only BFL employee that was misleading potential customers at that time. You're welcome to write your own book, but don't leave out the chapter about their FPGA launch, which was very similar to this one.

[greyhawk]

I wouldn't worry. If that whole "producing our own chips" thing doesn't pan out, they can now always buy them from ASICMINER, because tadaa, their wafers are done:

https://bitcointalk.org/index.php?topic=99497.msg1394701#msg1394701

Merry Christmas.

[creativex]

That'd be an absolute hoot after all the ranting Josh has done about how BFL's design is so very efficient and everyone else's is just junk.

[DutchBrat]

There are now 2.

bASIC and Avalon (and that project by Yojan).

(Deepbit and ASICMiner where are you?)

ASICMiner is here:

Update

There are several news:

1. The process of our rest layers are significantly faster, we are now in QC and expecting to have the wafer arrived at our packaging service next week. Then the slicing, packaging, and testing will start immediately.

Looks like my shares will be worth a lot thanks to BFL delaying and delaying and delaying and....  

[elux]

They didn't lie, they had unexpected setbacks.  There's a difference.

But what I mean by my statement is that they aren't leaving to Cuba, or anywhere else for that matter.  If they were planning to leave with customers' money, they would have done so long ago.  Right now, they are issuing refunds, probably in greater quantity than any additional sales they are making at this point.  Which means it wouldn't make sense to stick around, since they would be losing money.

EITHER failing to deliver OR running with the money looks like a very real possibility.

Tick tock goes the clock. This feels more and more like waiting for BTCST to blow up in late July/early August.

Payments made for pre-orders of ASIC based products now under development should be considered non-refundable until products begin shipping or 1 January 2013, whichever is earlier

If BFL is going to implode, and in the worst possible way, it should happen shortly before this date.

Time will tell soon enough. If they ship, Inaba will have his apology.

[PuertoLibre]

On second thought, don't talk to me Inaba.

Talk to me when you actually have delivered 100 [ASIC] units of a product your company sells. Until that time shooo....I disown you as a legitimate vendor. Begone from my sight!

Edit: and uh, best of luck.

Wonderful PuertoLibre, does this mean you will leave this BFL thread and go to the actual ASIC vendor's thread? We will be deeply saddened by this loss.

It just means I no longer see BFL as a credible vendor of ASIC devices.

Nothing has changed other than telling Inaba to go and send his customers some lots to regain his [vendor] credibility.

The second wave of refunds are about to start (IMO). This is the dangerous side of refunds IMO.

Unless their VC invested into BFL for the sake of massive orders of hardware....well, there is only so much in terms of refunds that BFL can afford. [Speculation]

---------------------------

Think of it this way, you are in the reps position and represent your company. You pay the fab for a 65nm process node and all the perks including a few "bullet runs". (matrix bullet time, not real speedy bullets).

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

The bill comes out to 1 or 2 million (theoretical speculation). Great, they start the job, they use some fab techniques to keep their costs down. When they are sure it works, they go full throttle.

Problem, the throttle doesn't work, the Fab is evasive, the time grows longer and longer each day. Then you have your first round of refunds. That money backing your company as profits and as repayment to the VC is shrinking.

Lets say you lose only 750,000 in the first round of refunds. Great, the loss is minimal. But you have to cover operating costs and dozens of other smaller expenses. Lets say you use VC money and not refundable customer money. (Think of it as two different pools)

Then, there is a screw up at the fab. The timeline shifts drastically with no end in sight. People lose confidence (rightly so IMO).

The second round of refunds come in. This time you lose 1.5 million.

-----------------------

You can only lose so much before you can't even pay back the VC. The VC won't come from BFL's own pockets but from their profits. Correct? Or am I mistaken?

People seem to think that panic should only start if 100% of the refunds go back into the hands of the customers.  That would implode BFL.

But is that really the case?

Keep in mind they are paying money to their employees and the fab and everyone else in the pipeline (parts/location/ etc).

How much of their current customer pool can they refund before their debts outweigh the intake?

-----------------------

The only way out of this vicious circle is that BFL may have (speculation) a contract with the VC to provide them repayment in hardware. Or money _and_ hardware.

If that is the case, the true hash rate is probably much higher than what the forum facing side realizes.

OR

It could just be that BFL ends up giving too many refunds and they decide to fold up long before they hit 100% returns.

If they spend 2.1 million on the fab and all other expenses.

If they take in 3.1 million from customer orders.

What happens when they have refunded up to 1.5 million? What do they do at that point? Continue to operate at a staggering loss? Even if they still retain 1.6, who wouldn't close up shop?

This is why I am starting to imagine they have a different deal set up with the VC. Otherwise the VC would get helluva nervous won't they?

[MrTeal]

What venture capitalist views every investment as a sure thing?

[elux]

What venture capitalist views every investment as a sure thing?

There is no way in hell that BFL has VC backing. Not with Vleisides on board. No chance.

Yes, yes I've read the press release.

An "Anonymous Private Equity Group" is in the realm of the possible,
if that's what they call the "missing" i.e. non-recovered gains from the $19M lottery scam.

Either every little expense is out of the customers pocket, or that mixed with criminal proceeds from the fraud-ring.

[2GOOD]

I wouldn't worry. If that whole "producing our own chips" thing doesn't pan out, they can now always buy them from ASICMINER, because tadaa, their wafers are done:

https://bitcointalk.org/index.php?topic=99497.msg1394701#msg1394701

Merry Christmas.

Haha Merry Christmas to you too, sad I own only 5 shares at ASICMINER

[wdBTCtrader]

Your defense of them seems to be that they're dishonest, naive idiots, but not scammers. Have I summed that up about right?

This isn't an attempt at a defense for BFL, it's an accurate accounting of what is going on so that people can use good information to make their business decisions. The problem with a lot of the comments in this topic, is that there is no temperament to reality. It's "BFL are scammorz, har har" which doesn't help anyone.

I think that the two key words in the quoted section are dishonest and naive. BFL has shown themselves to be dishonest through ommission about their delivery dates, allowing customers to continue to believe that chips would be arriving in late November when they knew that they were making clock buffer adjustments that would delay at least until mid-December. Because of the competitive environment for ASICs, it is understandable why they would do this, but it's important to know that they did this when deciding whether or not you can trust them regarding future statements. Essentially, if BFL says on January 8th that the chips will arrive soon, this aspect of dishonesty justifies a person to ignore the information until there is provable evidence that the chips are in BFLs hands. I would even go so far as to say the chips need to be integrated into a working prototype, and yochdog and the other guy go there and see it and report positively. Only does it makes sense to plan around a promised BFL shipping date.

The other word is naive and it does seem that they have some experience to gain with respect to business relationships. This is pretty normal for a new company though, and as such I think it is overboard to label anyone there as an "idiot". From what I've seen, the people at BFL are pretty smart.

As far as being a "scammer", I still feel it is highly doubtful that the intention here was to collect preorder money and then run with it with no product. However, I still feel a scammer tag is warranted and I've laid out the case for that here.

It has previously been established that one of BFLs managers is convicted for running a scam defrauding little old ladies for 20 million USD.

I read those documents and I think you may have misunderstood what they said. Sonny was just part of an illegal lottery. People were still paid out. It seems that some people focus on the idea that they didn't buy tickets, but that was a strong feature of their lottery. If they bought tickets from the government, then the highest payout they could expect is half of what they put in. This is because government lotteries are not used as wealth redistribution, but for funding government programs (typically schools). So, instead, they offered tickets with a higher payout that would be validated by the government lottery. The people got paid as according to their voluntary agreements, and they actually got paid much better than if they participated in the government sanctioned lottery.

However, the government HATES it when you muscle in on their turf. The business model is essentially the equivalent of selling book orders in Bugsy Segal's backyard. The fact that they were giving people a more fair game while cutting out funds that should have gone to the public treasury was pretty much infuriating to the AG. That's why the hammer fell. The fraud argument from the government is that Sonny's company was supposedly representing themselves as a sanctioned government lottery. Maybe they were, I don't really know because the document lacked evidence, and the government's motivation is suspect. But this has nothing to do with defrauding little old ladies.

very informative and well worth reiterating.

[TheBible]

And now every single BFL thread has been dumped into the german off topic forum.  Wonder which admin got paid off for it, and how much it cost.

Here's the part where you all struggle to defend the obvious scam even more.

[TheBible]

Your defense of them seems to be that they're dishonest, naive idiots, but not scammers. Have I summed that up about right?

This isn't an attempt at a defense for BFL, it's an accurate accounting of what is going on so that people can use good information to make their business decisions. The problem with a lot of the comments in this topic, is that there is no temperament to reality. It's "BFL are scammorz, har har" which doesn't help anyone.

I think that the two key words in the quoted section are dishonest and naive. BFL has shown themselves to be dishonest through ommission about their delivery dates, allowing customers to continue to believe that chips would be arriving in late November when they knew that they were making clock buffer adjustments that would delay at least until mid-December. Because of the competitive environment for ASICs, it is understandable why they would do this, but it's important to know that they did this when deciding whether or not you can trust them regarding future statements. Essentially, if BFL says on January 8th that the chips will arrive soon, this aspect of dishonesty justifies a person to ignore the information until there is provable evidence that the chips are in BFLs hands. I would even go so far as to say the chips need to be integrated into a working prototype, and yochdog and the other guy go there and see it and report positively. Only does it makes sense to plan around a promised BFL shipping date.

The other word is naive and it does seem that they have some experience to gain with respect to business relationships. This is pretty normal for a new company though, and as such I think it is overboard to label anyone there as an "idiot". From what I've seen, the people at BFL are pretty smart.

As far as being a "scammer", I still feel it is highly doubtful that the intention here was to collect preorder money and then run with it with no product. However, I still feel a scammer tag is warranted and I've laid out the case for that here.

It has previously been established that one of BFLs managers is convicted for running a scam defrauding little old ladies for 20 million USD.

I read those documents and I think you may have misunderstood what they said. Sonny was just part of an illegal lottery. People were still paid out. It seems that some people focus on the idea that they didn't buy tickets, but that was a strong feature of their lottery. If they bought tickets from the government, then the highest payout they could expect is half of what they put in. This is because government lotteries are not used as wealth redistribution, but for funding government programs (typically schools). So, instead, they offered tickets with a higher payout that would be validated by the government lottery. The people got paid as according to their voluntary agreements, and they actually got paid much better than if they participated in the government sanctioned lottery.

However, the government HATES it when you muscle in on their turf. The business model is essentially the equivalent of selling book orders in Bugsy Segal's backyard. The fact that they were giving people a more fair game while cutting out funds that should have gone to the public treasury was pretty much infuriating to the AG. That's why the hammer fell. The fraud argument from the government is that Sonny's company was supposedly representing themselves as a sanctioned government lottery. Maybe they were, I don't really know because the document lacked evidence, and the government's motivation is suspect. But this has nothing to do with defrauding little old ladies.

very informative and well worth reiterating.

This place absolutely never fails to defend major scammers just before they steal everything and split.  I mean never; it happened with pirate, Patrick, Nefario, Zhou, the list just goes on. 

It boggles the mind how you can get scammed so many times and not learn a goddamned thing.

[wdBTCtrader]

I do believe he prefaced his accounting with...

This isn't an attempt at a defense for BFL...

[Fjordbit]

This place absolutely never fails to defend major scammers just before they steal everything and split.  I mean never; it happened with pirate, Patrick, Nefario, Zhou, the list just goes on. 

It boggles the mind how you can get scammed so many times and not learn a goddamned thing.

This is an interesting response to a post that links to an argument for giving BFL representatives a scammer tag, while calling them dishonest and naive. I think you would do well to try to understand a post before commenting on it.

[MPOE-PR]

I wonder where the foul mouthed BFL spokesdude has gone too. The silence is deafening. Hello? If you miss your daily quota of personal attacks and trolling accusations, this is going to reflect badly in your performance review under the "productivity" section. Please think of the children and save Christmas.

He's busy doing math.

BFL sure likes to blame the fab since being unknown they can't come here and defend themselves.

The conversation probably went like this:

BFL: We want to do a fully custom ASIC.
Fab: Have you ever done ASICs before?
BFL: Sure, we programmed FPGAs. That's the same thing, right?
Fab: Uh, no. Very different.
BFL: Well, how long will it take?
Fab: Someone with experience can do it in 6 months, but since this is your first attempt, expect 1-2 years.
BFL: Ok, great, thanks.

BFL to public: We'll have a finished product in 6 months, guaranteed! The fab said so.

Sounds possible, if we accept they actually talked to a fab.

Just confirmed by Josh:

https://forums.butterflylabs.com/bfl-forum-miscellaneous/519-10-dec-2012-bfl-asic-update-4.html#post7983

If they didn't have such a history of saying whatever seems to work at the time that might carry a lot more water. They could have said this at any point prior to it becoming a critical save.

I respond to posts with verifiable information.

Cute.

BFL has shown themselves to be dishonest through ommission about their delivery dates, allowing customers to continue to believe that chips would be arriving in late November when they knew that they were making clock buffer adjustments that would delay at least until mid-December..

They had no idea they were making such adjustments until it became necessary for it to be announced at which point it was announced. Exactly like they have no idea currently as to location of their production facility. It will become known once circumstances force the bs team to say something definite on that topic. And then it'll move.

The people got paid as according to their voluntary agreements, and they actually got paid much better than if they participated in the government sanctioned lottery.

Maybe I've missed something but afaik the ~19 million is still unreturned.

[pazor]

interesting

next delivery time 14.01.2013

 

[TheBible]

This place absolutely never fails to defend major scammers just before they steal everything and split.  I mean never; it happened with pirate, Patrick, Nefario, Zhou, the list just goes on. 

It boggles the mind how you can get scammed so many times and not learn a goddamned thing.

This is an interesting response to a post that links to an argument for giving BFL representatives a scammer tag, while calling them dishonest and naive. I think you would do well to try to understand a post before commenting on it.

I did.  He talked about giving them a scammer tag, and I reminded him that bitcointalk has a long and proud tradition of defending their scammers. 

[repentance]

interesting

next delivery time 14.01.2013

 

I doubt that's an estimated delivery time.  Until they've got test chips in their hands and have made a working prototype, they're not going to give the go ahead for the production run proper.  From what Josh has posted, even the test chips don't exist yet.  Hell, he hasn't even said that the masks are complete yet.

[Fjordbit]

The people got paid as according to their voluntary agreements, and they actually got paid much better than if they participated in the government sanctioned lottery.

Maybe I've missed something but afaik the ~19 million is still unreturned.

Yeah, you're missing, I think, the whole point of the indictment. Look at the statements from the postal inspector:

According to the indictment the victims were purchasing “positions” in tickets for lotteries that would be grouped together or “pooled” to buy larger blocks of tickets thereby increasing their chances of winning. Funds received from victims were not used to purchase tickets, but to pay “winnings” to other victims, to fund the scheme and to benefit the defendants. Victims were sent checks falsely represented as lottery “winnings,” however the amount of the alleged “winnings” was far less than the amount the victim had sent in.

The total amount collected from selling the tickets was $25 million. That's not net, it's gross, and it's what the government projects as "the fraud" as. From the perspective of the government, any money sent to the lottery scheme is fraudulent. Their argument is that because the lottery company was representing themselves as being a pass through to sanctioned tickets, that all of the people were defrauded. Like I said, maybe they were, maybe they weren't. I don't really know because the documents don't detail any evidence that indicates this either way. I'd like to see what this company actually sent to people in their advertising in order to make a judgement. But even assuming that this is the case, it seems to me that they made these statements in order to evade prosecution while running an illegal lottery.

But what is clear is that they were running a lottery and they were paying the people who were participating according to their positions. Some people might be hung up on the statement that "the amount of the alleged “winnings” was far less than the amount the victim had sent in" but that's how a lottery works. The payouts are less than the draw. This wasn't a charity, it was a for profit business.

So this can come down to a debate as to whether or not lotteries themselves are moral. I personally don't care to debate this: I feel they are moral as long as the payouts are as agreed. I respect and understand the arguments towards the opinion that all lotteries are immoral. I cannot accept a position that lotteries are moral when run by the government, but immoral when run by individuals. Whatever your opinion on lotteries is, though, judgement of Sonny should be made based on the fact that he was part of an illegal lottery, and not that he "defrauded little old ladies." Little old ladies know what they are getting into when they buy a lottery ticket.

[DutchBrat]

It's not about old ladies buying lottery tickets... it's about a company alleging that they are a pass through to a legal lottery, wheras in fact they never purchased any lottery tickets, but used money from new players to pay off old players.

They weren't running a lottery, they were running a ponzi scheme and the moment someone had bought a jackpot winner they would have never payed our as they didn't have the funds to do that.

That's why people are upset, not because they ran a lottery....but because they did not run a lottery, so there was no chance you could ever get payed a huge prize....