BFL is Probably doing fine financially.

[chiropteran]

 A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development?  

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

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[Tehfiend]

I'm sure they exchanged all BTC for USD to avoid the volatile markets from wiping out their funds. I am sure they are funding their operation in USD so it would be smart as nobody can promise that BTC won't be worth $2 tomorrow.

[BBQKorv]

A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development? 

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

It depends if "they" holding plenty of BTC is BFL or the inviduals behind it. Most likely Josh&Co won't pump their private funds into BFL if they have a change to shut it down cleanly with bankruptcy and blaim that on trolls and massive refunds.

BFL would be dead many times already if they didn't continue the fraudulent advertising with impossible delivery date promises.

Refunds are hitting them hard already, thats a partial reason to the increased prices. "All sales are final" is completely aimed to avoid refunds in the future.

[chiropteran]

I'm sure they exchanged all BTC for USD to avoid the volatile markets from wiping out their funds. I am sure they are funding their operation in USD so it would be smart as nobody can promise that BTC won't be worth $2 tomorrow.

I'm not talking about orders, I'm talking about holdings and investment.

If BTC crashes down to nothing or close to nothing, BFL is finished anyway: nobody will pay thousands of dollars for an ASIC that mines BTC worth pennies.  They were already betting on BTC success through millions of dollars worth of investments, would it makes sense for them to bet on bitcoin with a least a few thousand dollars worth of actual BTC holdings?

>I am sure they are funding their operation in USD so it would be smart as nobody can promise that BTC won't be worth $2 tomorrow.

If BTC was worth $2 tomorrow, they would be finished- nobody is going to buy an ASIC to mine $2 coins.  They lose no matter what if BTC crashes, so they might as well have bought some when it was low.

[dogie]

A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development? 

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

If they had 10 million bitcoins, why would they bother failing at this? Why would they invest in generating more bitcoins for other people to devalue their $200 million in coins they hold themselves?

Get a clue, they're f*****

[Tehfiend]

I'm not talking about orders, I'm talking about holdings and investment.

Yeah, me too.

If BTC crashes down to nothing or close to nothing, BFL is finished anyway: nobody will pay thousands of dollars for an ASIC that mines BTC worth pennies.  They were already betting on BTC success through millions of dollars worth of investments, would it makes sense for them to bet on bitcoin with a least a few thousand dollars worth of actual BTC holdings?

If BTC was worth $2 tomorrow, they would be finished- nobody is going to buy an ASIC to mine $2 coins.  They lose no matter what if BTC crashes, so they might as well have bought some when it was low.

Not true IMO. While they might not take any new orders, they have plenty of existing orders to fulfill. If they held onto BTC and market crashed THEN they would be in trouble and unable to fulfill any orders/refunds. If they exchanged to USD then they simply fulfill the massive amount of existing orders and then close up shop if there is no longer interest in their product.

[chiropteran]

If they had 10 million bitcoins, why would they bother failing at this? Why would they invest in generating more bitcoins for other people to devalue their $200 million in coins they hold themselves?

Get a clue, they're f*****

Maybe you are not good at math.  BFL announced the ASIC devices when BTC were $8 each.  They could have picked up $100k worth of BTC as a side investment ($100k being a small percentage of their total capital required to manufacture ASICs) in their market, which would be worth $2.8 million today.

Also, if you think ASIC will devalue bitcoins, you need to look at some history.  Difficulty increases have resulted in value increases EVERY SINGLE TIME.  Not once has the difficulty skyrocketed while price crashed, never.

[dogie]

If they had 10 million bitcoins, why would they bother failing at this? Why would they invest in generating more bitcoins for other people to devalue their $200 million in coins they hold themselves?

Get a clue, they're f*****

Maybe you are not good at math.  BFL announced the ASIC devices when BTC were $8 each.  They could have picked up $100k worth of BTC as a side investment ($100k being a small percentage of their total capital required to manufacture ASICs) in their market, which would be worth $2.8 million today.

Also, if you think ASIC will devalue bitcoins, you need to look at some history.  Difficulty increases have resulted in value increases EVERY SINGLE TIME.  Not once has the difficulty skyrocketed while price crashed, never.

Can't use preorder money like that, its fraud. In the same way I can't sell you a computer delivered in 6 weeks and gamble it all in the mean time.

Because of outside factors.... supply and demand rules stay the same. If people love bitcoins and they want to invest, which scenario is going to hold a higher value... The one with 100m coins in circulation, or the one with 200m coins in circulation.

[chiropteran]

Can't use preorder money like that, its fraud. In the same way I can't sell you a computer delivered in 6 weeks and gamble it all in the mean time.

Please indicate where I suggested they use pre-order money to buy bitcoin.  I didn't.  I'm under the impression BFL had *some* capital to start up with, especially considering they had been producing and selling FPGA devices long before preorders for ASIC started.

The one with 100m coins in circulation, or the one with 200m coins in circulation.

Do you have any idea what you are talking about?  How did you even get out of the newbie lock on the forum without discovering the basics of bitcoin?  There will never be more than 21M bitcoin.  Mining produces coins at a very regular rate, thanks to difficulty adjustment, and ASIC certainly won't mine more coins than GPU.  I think you need to go read some basic FAQ about bitcoin before making idiotic statements about them that aren't true.

[KGambler]

Chiro, you aren't making any sense.  Listen to what people are trying to tell you.  Your assumptions are bad and your "guess" that they have 100,000+ BTC is outrageous.

[chiropteran]

Chiro, you aren't making any sense.  Listen to what people are trying to tell you.  

I'm sorry.  My assumption may or may not be incorrect, but I don't see the harm in discussing it rationally.

On the other hand, "dogie" talking about there being 200M BTC instead of 100M because of ASIC is just plain provably false.  It's completely impossible and it just shows that he doesn't have any idea what he is talking about.  Needless to say, if he can't understand the basic rules of bitcoin than I find it hard to take any part of his argument seriously.

>Your assumptions are bad and your "guess" that they have 100,000+ BTC is outrageous.

 I did the math, I wrote clear numbers, I don't understand how you can fail to read it.  $100k worth of bitcoin is NOT 100k bitcoin.  I guess this subforum is just full of trolls that can neither read English nor understand math.

[KGambler]

Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development? 

No.  You argue that their business is reliant on the future of BTC, and then argue that this means they should throw even more of their capital directly into BTC investment.  This doesn't make much sense.

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

This is an outrageous assumption.  It's not really worth discussing.  This forum is full of people who are interested in BTC.  I guess most of us are bitcoin millionaires?  "He like bitcoins...  he probably bought 100K of them and held onto them all!"  Uh, no.  Fail.

[chiropteran]

No.  You argue that their business is reliant on the future of BTC, and then argue that this means they should throw even more of their capital directly into BTC investment.  This doesn't make much sense.

Yes, I understand your opinion, but you need to show WHY you think such a thing.

Here is the chain of logic I am following:

1 BFL is in the business of creating bitcoin mining hardware.
2 Bitcoin is likely to increase in value because of this hardware.
3 Since BFL is in bitcoin related business, they should know this.
4 Since they are directly propping up the bitcoin value, they should take advantage of that and invest some directly in bitcoin.

Your argument seems to boil down to the following: if bitcoin fails, BFL fails, so they don't want to invest in BTC because if it fails now they double fail.  The problem with your argument is there is no such thing as double failing.  A business is either successful or it is not.  If bitcoin crashes and burns and nobody cares about ASIC and BFL fails because of this, the difference between BFL having some cash assets or BFL having some BTC assets is effectively zero- they are finished either way.

This is an outrageous assumption.  It's not really worth discussing.  This forum is full of people who are interested in BTC.  I guess most of us are bitcoin millionaires?  "He like bitcoins...  he probably bought 100K of them and held onto them all!"  Uh, no.  Fail.

Sounds like you have some sour grapes.  You *don't* have any bitcoin investments?  I think you might be in the minority if you don't.  Sorry to hear about your loss.  Looking at your post history I can confirm you are just an anti-BFL troll, I guess you think your lack of personal investment wisdom carries over to everyone else.

[tbd]

What you are describing sounds remarkably similar to a pump and dump scheme (http://en.wikipedia.org/wiki/Pump_and_dump).

[chiropteran]

What you are describing sounds remarkably similar to a pump and dump scheme (http://en.wikipedia.org/wiki/Pump_and_dump).

No, it's the Wegman's strategy. 
http://articles.businessinsider.com/2011-09-19/strategy/30174700_1_wegmans-supermarket-customers
They buy up real estate, build one of their awesome stores, and make money leasing the surrounding real estate.  They add value to something, so it just makes logical sense to purchase it at the previous low value and sell at the high value.  It's been incredibly successful for them.  ASIC do the same thing for bitcoin. 

Pump & Dump implies adding no real value, but simply hype.  That is not what is going on here.

[glendall]

What you guys talking about?  BFL shipped last week!

/heavy sarcasm

[dogie]

Can't use preorder money like that, its fraud. In the same way I can't sell you a computer delivered in 6 weeks and gamble it all in the mean time.

Please indicate where I suggested they use pre-order money to buy bitcoin.  I didn't.  I'm under the impression BFL had *some* capital to start up with, especially considering they had been producing and selling FPGA devices long before preorders for ASIC started.

The one with 100m coins in circulation, or the one with 200m coins in circulation.

Do you have any idea what you are talking about?  How did you even get out of the newbie lock on the forum without discovering the basics of bitcoin?  There will never be more than 21M bitcoin.  Mining produces coins at a very regular rate, thanks to difficulty adjustment, and ASIC certainly won't mine more coins than GPU.  I think you need to go read some basic FAQ about bitcoin before making idiotic statements about them that aren't true.

Thanks herp derp, but it was an example scenario with double the currency available. Avoid the topic, its okay.

[dataphile]

A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development?  

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

It's nothing more than speculation. Just because a handful of bitcointalk people are pulling out on orders for a few singles or even a minirig doesn't mean that there aren't many, many more whose investments are several orders of magnitudes greater than the sum of all requested refunds.

Also, we have absolutely no idea what their profit margin is like. 

[creativex]

A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development?  

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

It's nothing more than speculation. Just because a handful of bitcointalk people are pulling out on orders for a few singles or even a minirig doesn't mean that there aren't many, many more whose investments are several orders of magnitudes greater than the sum of all requested refunds.

Also, we have absolutely no idea what their profit margin is like.

Please tell me you are joking. Just because one has no(unobtainable) incontrovertible evidence does *NOT* mean one must suspend their common sense.



22 employees(presumably with 22salaries) + 1 year with zero products to ship? Alleged respins, pushed back shipping dates, blown power estimates, etc...add infinity. Please use your head.

[rupy]

You should consider the amount of value that goes into BFL as BTC price rises.

Nobody is going to sell BTC now, and everyone wants to buy; thus the BTC price rockets... It's called a deflationary spiral, but for BFL this is jackpot:

Because those who do sell, actually buy BFL.

If you look at the BFL order numbers, the orders went from ~300 "order views" per day after launch back in 2012 to ~600 right before the SC price doubled. Edit: and now we're back to pre SC price doubling BTC price = 10!

I suspect far far far more of these potential purchases were real bitpay investments of the BTC price appreciation.

BFL is the ONLY viable outlet for investing BTC in any product, specially financial.

Who cares how much gold is worth when you manufacture shovels!

[chiropteran]

Thanks herp derp, but it was an example scenario with double the currency available. Avoid the topic, its okay.

Which makes zero sense.  

BFL investing some cash in bitcoin- the currency doesn't double in availability, goes down by less than 1% due to the bitcoin held but this is a tiny drop in the bucket.

ASIC released- total available currency doesn't double, or appreciably change in any way.

You made a nonsense example that doesn't apply to bitcoin in any way at all, nor does it apply to BFL, and now you are trying to backpedal.

[tbd]

No, it's the Wegman's strategy. 
http://articles.businessinsider.com/2011-09-19/strategy/30174700_1_wegmans-supermarket-customers
They buy up real estate, build one of their awesome stores, and make money leasing the surrounding real estate.  They add value to something, so it just makes logical sense to purchase it at the previous low value and sell at the high value.  It's been incredibly successful for them.  ASIC do the same thing for bitcoin. 

Pump & Dump implies adding no real value, but simply hype.  That is not what is going on here.

Actually, hype is exactly what is going on here.  BFL has not yet delivered any devices.

Also, please explain how a company delivering ASIC devices will cause the value of bitcoins to increase.

[Littleshop]

Can't use preorder money like that, its fraud. In the same way I can't sell you a computer delivered in 6 weeks and gamble it all in the mean time.

Well if or if not their pre-orders were done according to the law is one thing, but no, you can not say HOW a company uses pre-order money that specifically.  If the units cost $400 to make and they took in $1200 they certainly could keep some in BTC. 

[dogie]

Can't use preorder money like that, its fraud. In the same way I can't sell you a computer delivered in 6 weeks and gamble it all in the mean time.

Well if or if not their pre-orders were done according to the law is one thing, but no, you can not say HOW a company uses pre-order money that specifically.  If the units cost $400 to make and they took in $1200 they certainly could keep some in BTC. 

Aah but there is the gamble. Few scenarios:

1) Costs them $400 to make, took $1200 and invested the rest. As long is everything is reasonably assumed, this is okay to invest the $800.
2) Thought it would cost them $400 to make, took $1200, ended up costing $800 but they'd invested $800. BIG PROBLEM, BIG BIG PROBLEM [regardless off what happened to the investment]
3) Thought it would cost them $400, took $1200, invested $1200. Stop. Go directly to jail.

[chiropteran]

Also, please explain how a company delivering ASIC devices will cause the value of bitcoins to increase.

A secure bitcoin is a more valuable bitcoin.  If total network hash value was 1GH/sec and any random idiot could engage a 51% attack by mining with a couple computers, bitcoin would be worthless, no?

Increasing network difficulty (which is exactly what ASIC do) will increase the value of bitcoin.  This has been proven repeatedly if you follow any of the historical price vs difficulty charts.

Aah but there is the gamble. Few scenarios:

It's all irrelevant.  BFL was selling FPGA devices long before the ASIC pre-orders.  Are you assuming all the income from those sales evaporated into thin air?

[dataphile]

A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development?  

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

It's nothing more than speculation. Just because a handful of bitcointalk people are pulling out on orders for a few singles or even a minirig doesn't mean that there aren't many, many more whose investments are several orders of magnitudes greater than the sum of all requested refunds.

Also, we have absolutely no idea what their profit margin is like.

Please tell me you are joking. Just because one has no(unobtainable) incontrovertible evidence does *NOT* mean one must suspend their common sense.

22 employees(presumably with 22salaries) + 1 year with zero products to ship? Alleged respins, pushed back shipping dates, blown power estimates, etc...add infinity. Please use your head.

Even if you assume that every BFL employee has been given a full $50,000 annual salary, which is absolutely fucking absurd, it's less than the amount of money they've made from preorders alone. It's not even clear that all 22 of their employees are full time, forget getting paid an engineer's salary. In fact, given their inability to handle customer support and PR problems in a timely manner, let alone get their chips working, it's likely that they aren't full time. Plus, they have investors, no?

I used my head.

[creativex]

A lot of speculation about how they are bleeding money and losing pre-orders right and left.  However, think about the basis of their business for a minute.  If bitcoin fails, they fail.  Wouldn't it be logical for them to make at least a modest investment in bitcoins directly if they are going to invest millions in ASIC development?  

I'm guessing that BFL probably has tens of million worth of bitcoin stockpiled (remember, they were around back when BTC was a small fraction of the current price), and is in no danger at all of going under or failing due to lack of funds.

It's nothing more than speculation. Just because a handful of bitcointalk people are pulling out on orders for a few singles or even a minirig doesn't mean that there aren't many, many more whose investments are several orders of magnitudes greater than the sum of all requested refunds.

Also, we have absolutely no idea what their profit margin is like.

Please tell me you are joking. Just because one has no(unobtainable) incontrovertible evidence does *NOT* mean one must suspend their common sense.

22 employees(presumably with 22salaries) + 1 year with zero products to ship? Alleged respins, pushed back shipping dates, blown power estimates, etc...add infinity. Please use your head.

Even if you assume that every BFL employee has been given a full $50,000 annual salary, which is absolutely fucking absurd, it's less than the amount of money they've made from preorders alone. It's not even clear that all 22 of their employees are full time, forget getting paid an engineer's salary. In fact, given their inability to handle customer support and PR problems in a timely manner, let alone get their chips working, it's likely that they aren't full time. Plus, they have investors, no?

I used my head.

No clue what their 22 employees are being overpaid. Since they(BFL) acknowledge outsourcing basically everything on this project, there's no reason to have more than a couple  employees until you're ready to ship anyway. The real cost of bringing an ASIC mining product to market is designing and fabbing the chips, which is massively front end loaded. BFL claims that they've redesigned their chips 2x already, the current failed chips are their third attempt...if what they say is to be believed. They've flown in two Bitcoin community members(one from Australia) to tour their facility and given them private airplane rides. They've ordered huge numbers of products to assemble products they're no longer selling(boxes of fans). They've rented, reconfigured, and refurnished their current facilities. They've ordered and apparently received reflow ovens and pick and place machines. They've done all this and more in the last year all without having any actual products to sell. The unproven claims of VC funding are dubious at best as anyone that knows anything about organized VC knows those guys don't tend to simply write blank checks and then walk away.

Oh and btw BFL claims they're not using any of their pre-order funds to fund development of their ASICs.    

[vvic]

Thank god BFL is doing well financially! I was worried these poor things are starving there

[Bitsaurus]

Thank god BFL is doing well financially! I was worried these poor things are starving there

They have Doritos on the lunch table (as seen in the pic).














The only successful chip in the building.

[vvic]

ah yes, I remember that chip trolling. So at the end, BFL will buy avalon's chips and this is how the'll deliver their asics.