BFL is Probably doing fine financially.

[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.

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[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.