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Author Topic: If you preordered a BFL ASIC rig back in August and paid for it in Bitcoin...  (Read 3697 times)
bitcoindaddy
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December 10, 2012, 02:38:04 AM
 #41

Why collect 100% of the cost of pre-order units so many months in advance then? Why not a 10 - 20% earnest deposit? That would've given the company an accurate measure of demand and protected them from unfunded commitments. Are these funds just sitting under a mattress or collecting interest somewhere? The whole thing is just shady and unprofessional, and yes I'm aware other companies have done this too, though I do not believe any of them have sat on other people's money for such an extended time frame.

then it would be much easier for people to jump ship or pre-order something else

bfl has the best a business strategy, get your money the earliest
FTFY. It's called a lock-in. The same thing happens in marriage.

Not really lock-in if anyone can request and receive a refund anytime they want.
Jutarul
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December 10, 2012, 02:54:53 AM
 #42

Why collect 100% of the cost of pre-order units so many months in advance then? Why not a 10 - 20% earnest deposit? That would've given the company an accurate measure of demand and protected them from unfunded commitments. Are these funds just sitting under a mattress or collecting interest somewhere? The whole thing is just shady and unprofessional, and yes I'm aware other companies have done this too, though I do not believe any of them have sat on other people's money for such an extended time frame.

then it would be much easier for people to jump ship or pre-order something else

bfl has the best a business strategy, get your money the earliest
FTFY. It's called a lock-in. The same thing happens in marriage.

Not really lock-in if anyone can request and receive a refund anytime they want.
Yes it is a lock-in. Because you have to give up on the FULL amount and cannot use that to place orders elsewhere. Otherwise I could place pre-orders for a larger number of units and/or place orders with competitors.

Please know that a lock-in is not necessarily a bad thing. It protects the manufacturer from getting an inflated pre-order list.

The ASICMINER Project https://bitcointalk.org/index.php?topic=99497.0
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kwoody
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December 10, 2012, 06:32:47 AM
 #43

In September when the price was bouncing around $10-$11, i pre-ordered bASICs when there was a spike up to $12.6. I was happy because it dropped back down to $11ish shortly after. probably was the best time to buy into the first batch of bASIC preorders
bitboyben
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December 10, 2012, 06:59:16 AM
 #44

First press release.

Why did I sell at $5! Come back to me my old bitcoin! 1GjeBGS4KrxKAeEVt8d1fTnuKgpKpMmL6S
If you don't like the price of BTC come back in 8 hours.
420
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December 10, 2012, 07:29:30 AM
 #45

First press release.

where?

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Gatorhex
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December 10, 2012, 02:34:36 PM
 #46

Quote
... Is this in any way relevant?

Quote
Not really.

It's relevant if you ever expected to get a BTC refund  Wink
Fjordbit
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December 10, 2012, 05:29:53 PM
 #47

This could be said for anything really. If you bought a house in August instead of buying bitcoins then you also lost out on the capital gain. Or if you kept your money in the S&P instead of bitcoin, then you lost on those gains. It's just nonsense to try to make BFL look bad for your decision.

At the same time, you can't expect hardware vendors to act as hedges for bitcoin investors. If BFL gave refunds in btc, then it would just make sense to purchase a ton of hardware with btc. Then if the btc price goes down, you still have the value of the hardware. If the btc price goes up, you request a refund and get all the gains with no risk. It's selfish and makes no sense to ask for such a thing from a hardware vendor.
creativex
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December 10, 2012, 05:44:48 PM
 #48

Only applicable if you bought a house in August and you're sleeping on a park bench in December. Otherwise the BTC invested in the house were well spent protecting you from exposure.

Rassah (OP)
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December 10, 2012, 05:55:33 PM
 #49

This could be said for anything really. If you bought a house in August instead of buying bitcoins then you also lost out on the capital gain. Or if you kept your money in the S&P instead of bitcoin, then you lost on those gains. It's just nonsense to try to make BFL look bad for your decision.

The difference is that when you buy those things, you get a product. It's an even exchange at the time, and you have the chance of your product either making you money, or growing in value itself. That's how exchange rate risk is avoided: quick exchange. Here, people paid for the product, but got nothing in return. The decision was bad, but it wasn't "yours." It was a decision influenced by BFL with their delivery claims, and the opportunity cost to the buyers is entirely their fault.

I wonder how many people would have preordered back in August if they knew that ASICs would come out in January, WAY after the block reward halving, and the expected rise in BTC value? I'm sure more than a few people were also expecting to get at least a few weeks of 50BTC/block mining as well.
michaelmclees
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December 10, 2012, 07:28:10 PM
 #50

I know I was expecting some 50 blocks.  Now I just don't see the ROI working out.
creativex
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December 10, 2012, 07:54:41 PM
 #51

It could still be okay for BFL pre-orders even if Avalon's first batch beats them to the punch, which BFL_Josh seemed to be preparing his customers for with recent posts. However if both Avalon and BTCFPGA beat BFL out the door I think their customers could be in for a lengthy ROI period.

At any rate the clock is ticking and the premium paid by BFL customers that paid for products months in advance is rapidly losing value.

Fjordbit
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December 10, 2012, 08:52:00 PM
 #52

The difference is that when you buy those things, you get a product. It's an even exchange at the time, and you have the chance of your product either making you money, or growing in value itself.

This really is not the difference you are making it out to be, but if you think this is that important, imagine putting a large contribution towards an Ouya or any number of kickstarter projects.

The problem here is treating bitcoin strictly as an investment, when it is more functional as a currency. I have an ASIC preorder from the first day, meaning I took $800 in fiat that I had sitting in my Mt Gox account and converted it to bitcoins and then bought an upgrade. At that time, I guess I could have bought $800 in bitcoin and sat on it and I'd have over $1600 now, but I really didn't have plans to buy more bitcoin. If I did have such plans, I would have bought the SC upgrade and bought some bitcoin. Fundamentally, though, buying bitcoin as an investment and buying a miner are different actions and it doesn't make sense to comingle their finances any more than comingling the cost of an Ouya with bitcoin.

Quote
At any rate the clock is ticking and the premium paid by BFL customers that paid for products months in advance is rapidly losing value.

I agree with this. Really, it was delivery after the halving that dealt the largest blow to profitability because no matter how many other ASICs were out there, everyone was still getting twice as much.
bcpokey
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December 10, 2012, 09:21:25 PM
 #53

The difference is that when you buy those things, you get a product. It's an even exchange at the time, and you have the chance of your product either making you money, or growing in value itself.

This really is not the difference you are making it out to be, but if you think this is that important, imagine putting a large contribution towards an Ouya or any number of kickstarter projects.

The problem here is treating bitcoin strictly as an investment, when it is more functional as a currency. I have an ASIC preorder from the first day, meaning I took $800 in fiat that I had sitting in my Mt Gox account and converted it to bitcoins and then bought an upgrade. At that time, I guess I could have bought $800 in bitcoin and sat on it and I'd have over $1600 now, but I really didn't have plans to buy more bitcoin. If I did have such plans, I would have bought the SC upgrade and bought some bitcoin. Fundamentally, though, buying bitcoin as an investment and buying a miner are different actions and it doesn't make sense to comingle their finances any more than comingling the cost of an Ouya with bitcoin.

Quote
At any rate the clock is ticking and the premium paid by BFL customers that paid for products months in advance is rapidly losing value.

I agree with this. Really, it was delivery after the halving that dealt the largest blow to profitability because no matter how many other ASICs were out there, everyone was still getting twice as much.

Though I see what you are saying, I disagree. But first I will say that I expect your situation doesn't apply to what was being suggested by the OP (they can correct me if I'm wrong). Taking fiat, exchanging to coin, then purchasing an ASIC is basically buying the ASIC in fiat, you simply used bitcoin as an electronic exchange medium, the same as if you used a credit card. If someone has already gained bitcoin, either through mining, or trading, and has been floating the coins around, for whatever purposes, and used those coins to secure an ASIC order, that is more akin to use as a currency (as you hold dollars in your wallet, until it is time to use them, rather than holding Gold doubloons).

Now on to the separate idea. One of the primary motivations behind investment is the idea (fact?) that your fiat tomorrow will be worth less than it is today. To push fiat out the door in the form of investment, purchase, whatever, is supremely logical, as you will not see such a great return ever again. If you can see potential for your money to be worth more in the future, it only makes sense to save it.

Whether you invest in an Ouya, a house, a prostitute, you are secure in the fact that you made a wise decision buying now rather than later. Bitcoin, clearly not so much, be it an investment, or as currency, the valuation fluctuates wildly such that it is difficulty to know what the wisest course of action is. So in this radically different situation, placing coin down on something now, with the expectation of return later, is not wise as it is with fiat investment. You either need to be using it as you said, as an investment (so in this case it was a poor investment), or as a currency (whereby you receive product for your purchase). As to whose fault it is, I don't know that I can say it is BFLs fault, aside from missed target dates.

The part that I agree with however, is that you *did* make an investment, and a poor one, which has cost you, had you plunked down bitcoin on a promise.
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