BFL's Jalapeno exists - I have one in my hand and just uploaded a video

[minternj]

Whats the scheme again? Take off with people preoders money or sell asics that they demostrated they do have now at 400% profit margin(and thats being conservative)?

Can you walk me through your conservative math please?  I assume by "profit margin" you mean markup (or a 75% gross margin) or maybe you actually mean Josh has promised investors' a "profit that is 4X revenue", that would be a whole new thread though.
Try to remember the price has changed so you need to use the actual revenue that they should recognize as they ship.   I am actually interested.   I can help you start if you want.
$149 Revenue (let's assume they b/e on shipping).
COGS (according to conservative estimate of intern):  $37.25.
So, you claim it is very conservative to assume their 2 chip jallie costs them less than $37.25 to make.   Can you please break it down for us who are not as wise as you please?

costs been broken down before by people faaaaaar smarter than me, which is mostly everyone.

either way - question is what is this alleged scheme ? to run away with money now vs continuing revenue stream. From my own observances seems to be the continuing revenue.

I get the animosity towards bfl because of josh and the delays, but from what i see they are an actual business  with facilities employees etc. They shipped fpga product and asics now. Really , do you seriously still think its a scheme, vs poor project and perception mangement?

[Minor Miner]

I get the animosity towards bfl because of josh and the delays, but from what i see they are an actual business  with facilities employees etc. They shipped fpga product and asics now. Really , do you seriously still think its a scheme, vs poor project and perception mangement?

I would think COGS on a Jallie would be around $80.  Then there are operating costs (think rent, wages of 22, electric, ads, phone etc) to cover with the gross profit of $67, which they could not cover at this production rate.
So, to answer your other question, it really depends on what you mean by scam/scheme.   Using pre-order money to conduct research and development of a product you have no experience nor idea how to produce is a scam.   It was not presented that way.   It was not presented as "give me your money to TRY and make an asic but btw, I have never done this before and I am assuming you can google a clue (or buy one with a quarter so to speak)".
It was presented as "we will ship an amazing product in three months and everyone else is an idiot (implying BFL were the EXPERTS at making ASICS).   That is a scam.

To your point of "they are now delivering".   Everyone here understands that delivering at a 14,000GH/s Network rate compared to at 120,000GH/s is VERY different.  When you have been emphatically told you are receiving it at the 14,000 point and you get it when the device will produce 1/9th of what you assumed, you have been scammed.

Sort of like pre-ordering a betamax and getting it in 1988.

[SgtSpike]

I get the animosity towards bfl because of josh and the delays, but from what i see they are an actual business  with facilities employees etc. They shipped fpga product and asics now. Really , do you seriously still think its a scheme, vs poor project and perception mangement?

I would think COGS on a Jallie would be around $80.  Then there are operating costs (think rent, wages of 22, electric, ads, phone etc) to cover with the gross profit of $67, which they could not cover at this production rate.
So, to answer your other question, it really depends on what you mean by scam/scheme.   Using pre-order money to conduct research and development of a product you have no experience nor idea how to produce is a scam.   It was not presented that way.   It was not presented as "give me your money to TRY and make an asic but btw, I have never done this before and I am assuming you can google a clue (or buy one with a quarter so to speak)".
It was presented as "we will ship an amazing product in three months and everyone else is an idiot (implying BFL were the EXPERTS at making ASICS).   That is a scam.

To your point of "they are now delivering".   Everyone here understands that delivering at a 14,000GH/s Network rate compared to at 120,000GH/s is VERY different.  When you have been emphatically told you are receiving it at the 14,000 point and you get it when the device will produce 1/9th of what you assumed, you have been scammed.

Sort of like pre-ordering a betamax and getting it in 1988.

It's not a scam if you get your money back.  BFL has always honored refund requests.

BFL also made no guarantees regarding the network difficulty.

It is also worth noting that, between June 23rd and today, the price of BTC has gone up 27x while the difficulty has gone up 9x.  So, it is actually 3 times as profitable to mine today as it was back on June 23rd, 2012.  If anything, isn't that the opposite of scam?  The money-making product you bought will actually make 3 times MORE money as was projected when you first ordered it?

[minternj]

I get the animosity towards bfl because of josh and the delays, but from what i see they are an actual business  with facilities employees etc. They shipped fpga product and asics now. Really , do you seriously still think its a scheme, vs poor project and perception mangement?

I would think COGS on a Jallie would be around $80.  Then there are operating costs (think rent, wages of 22, electric, ads, phone etc) to cover with the gross profit of $67, which they could not cover at this production rate.
So, to answer your other question, it really depends on what you mean by scam/scheme.   Using pre-order money to conduct research and development of a product you have no experience nor idea how to produce is a scam.   It was not presented that way.   It was not presented as "give me your money to TRY and make an asic but btw, I have never done this before and I am assuming you can google a clue (or buy one with a quarter so to speak)".
It was presented as "we will ship an amazing product in three months and everyone else is an idiot (implying BFL were the EXPERTS at making ASICS).   That is a scam.

To your point of "they are now delivering".   Everyone here understands that delivering at a 14,000GH/s Network rate compared to at 120,000GH/s is VERY different.  When you have been emphatically told you are receiving it at the 14,000 point and you get it when the device will produce 1/9th of what you assumed, you have been scammed.

Sort of like pre-ordering a betamax and getting it in 1988.

You are being very liberal with your scam label. If you dont know the risks then its on you, the investor. This applies to everythign in bitcin, trading them otc buying asics, even buying gpu rigs. Bitcoins could easily drop to zero value tomorrow. Then does that make avalon scammers for selling machines that do nothing?

[Minor Miner]

It is also worth noting that, between June 23rd and today, the price of BTC has gone up 27x while the difficulty has gone up 9x.  So, it is actually 3 times as profitable to mine today as it was back on June 23rd, 2012.  If anything, isn't that the opposite of scam?  The money-making product you bought will actually make 3 times MORE money as was projected when you first ordered it?

Look, you and I are not going to agree on the semantics of this BUT what I would ask you to think about is whether the above is reasonable to bring into the debate at all?   BFL has no control over that only over their claims of being superior and their constant claims of delivering in the fall of 2012.

I would argue that your statement above is akin to the 100 MPG car company citing a drop in the price of gas as an excuse as to why my 100 MPG car, that only gets 30MPG is "fine".  

[minternj]

I get the animosity towards bfl because of josh and the delays, but from what i see they are an actual business  with facilities employees etc. They shipped fpga product and asics now. Really , do you seriously still think its a scheme, vs poor project and perception mangement?

I would think COGS on a Jallie would be around $80.  Then there are operating costs (think rent, wages of 22, electric, ads, phone etc) to cover with the gross profit of $67, which they could not cover at this production rate.
So, to answer your other question, it really depends on what you mean by scam/scheme.   Using pre-order money to conduct research and development of a product you have no experience nor idea how to produce is a scam.   It was not presented that way.   It was not presented as "give me your money to TRY and make an asic but btw, I have never done this before and I am assuming you can google a clue (or buy one with a quarter so to speak)".
It was presented as "we will ship an amazing product in three months and everyone else is an idiot (implying BFL were the EXPERTS at making ASICS).   That is a scam.

To your point of "they are now delivering".   Everyone here understands that delivering at a 14,000GH/s Network rate compared to at 120,000GH/s is VERY different.  When you have been emphatically told you are receiving it at the 14,000 point and you get it when the device will produce 1/9th of what you assumed, you have been scammed.

Sort of like pre-ordering a betamax and getting it in 1988.

It's not a scam if you get your money back.  BFL has always honored refund requests.

BFL also made no guarantees regarding the network difficulty.

It is also worth noting that, between June 23rd and today, the price of BTC has gone up 27x while the difficulty has gone up 9x.  So, it is actually 3 times as profitable to mine today as it was back on June 23rd, 2012.  If anything, isn't that the opposite of scam?  The money-making product you bought will actually make 3 times MORE money as was projected when you first ordered it?

Exactly. BFL, avalon, asicminer are all selling machines that do the hash. Thats it. anything else is on you to determine for your risk tolerance.

If you can't take it that they didnt ship. get a friggin refund, no one was stopping you from doing it. They will become a scam once you can neither get the product or your money back. Those are 2 valid options any court will look at before determine a default of obligation in a sales contract.

[Minor Miner]

minternj;
I am not trying to be rude, but what state bar did you pass?  I think you should use google and come back with why your statement is incorrect.    Just because "I am willing to give you a refund" (after I fail to deliver on my contract) does not end my liability for that failure.   
We are not going to agree so I will leave it at that.   You do understand the difference between civil and criminal court correct? 

[minternj]

I passed the same bar that you did. And yes its rude to think your psuedo law knowledge is better than mine. I stayed at a holiday inn express so it makes me an expert. I know that most sales issues are a civil matter. In these cases they want you to resolve before bringing to court. Judges want you to arbitrate before bringing a case to court. If one party refunds you the money back, the matter is pretty much dead. But again, unless you are trying to claim some kind of damages, (lol try explaining difficulty changes and lost minging profits to a judge) i doubt you have any case.

[PuertoLibre]

So basically order with PayPal and they will legally force BFL to bump you in the queue!?

I wonder if you can get even higher in the queue by ordering with PayPal and then immediately canceling your PayPal account?

Doh!

[SgtSpike]

It is also worth noting that, between June 23rd and today, the price of BTC has gone up 27x while the difficulty has gone up 9x.  So, it is actually 3 times as profitable to mine today as it was back on June 23rd, 2012.  If anything, isn't that the opposite of scam?  The money-making product you bought will actually make 3 times MORE money as was projected when you first ordered it?

Look, you and I are not going to agree on the semantics of this BUT what I would ask you to think about is whether the above is reasonable to bring into the debate at all?   BFL has no control over that only over their claims of being superior and their constant claims of delivering in the fall of 2012.

I would argue that your statement above is akin to the 100 MPG car company citing a drop in the price of gas as an excuse as to why my 100 MPG car, that only gets 30MPG is "fine".  

Dude, you were the one who brought money-making into the debate in the first place:

Everyone here understands that delivering at a 14,000GH/s Network rate compared to at 120,000GH/s is VERY different.  When you have been emphatically told you are receiving it at the 14,000 point and you get it when the device will produce 1/9th of what you assumed, you have been scammed.

And I don't know why you brought that up, only to later say this:

BFL has no control over that

If you're going to argue about something, at least be consistent about where you stand.

[marra]

tx enmaku for additional info!

[k9quaint]

I passed the same bar that you did. And yes its rude to think your psuedo law knowledge is better than mine. I stayed at a holiday inn express so it makes me an expert. I know that most sales issues are a civil matter. In these cases they want you to resolve before bringing to court. Judges want you to arbitrate before bringing a case to court. If one party refunds you the money back, the matter is pretty much dead. But again, unless you are trying to claim some kind of damages, (lol try explaining difficulty changes and lost minging profits to a judge) i doubt you have any case.

This was actually rehashed several times in several threads, but I can post a summary here:

Under federal law, several elements are required to prove fraud: a material false statement made with an intent to deceive, a victim’s reliance on the statement and damages.
You can look that up here. http://www.federalcrimefaq.com/what-constitutes-the-crime-of-wire-fraud/
BFL saying they had a prototype and a shipping date when they obviously did not and taking peoples money under those pretenses could not have been an accident. There was clear intent to deceive about the current and state shipping date of BFLs products.
I think everyone who made a BFL purchase relied on the shipping dates provided in order to calculate their risk and return.
The damages are trivial to illustrate, plug a Jalapeno in and it generates a revenue stream. Loss of that promised revenue stream is all you need tell the judge.

You cannot undo a criminal act just by giving a refund or any other act of goodwill for that matter. It is also not clear what would happen to BFL if everyone asked for a refund at the same time, if BFL did not spend any of the pre-order cash, why did they need to take pre-orders? If they did spend some of the pre-order cash and something goes wrong (spending out of control due to over optimistic schedules for instance), then not everyone could get a refund.

[centove]

I passed the same bar that you did. And yes its rude to think your psuedo law knowledge is better than mine. I stayed at a holiday inn express so it makes me an expert. I know that most sales issues are a civil matter. In these cases they want you to resolve before bringing to court. Judges want you to arbitrate before bringing a case to court. If one party refunds you the money back, the matter is pretty much dead. But again, unless you are trying to claim some kind of damages, (lol try explaining difficulty changes and lost minging profits to a judge) i doubt you have any case.

This was actually rehashed several times in several threads, but I can post a summary here:

Under federal law, several elements are required to prove fraud: a material false statement made with an intent to deceive, a victim’s reliance on the statement and damages.
You can look that up here. http://www.federalcrimefaq.com/what-constitutes-the-crime-of-wire-fraud/
BFL saying they had a prototype and a shipping date when they obviously did not and taking peoples money under those pretenses could not have been an accident. There was clear intent to deceive about the current and state shipping date of BFLs products.
I think everyone who made a BFL purchase relied on the shipping dates provided in order to calculate their risk and return.
The damages are trivial to illustrate, plug a Jalapeno in and it generates a revenue stream. Loss of that promised revenue stream is all you need tell the judge.

You cannot undo a criminal act just by giving a refund or any other act of goodwill for that matter. It is also not clear what would happen to BFL if everyone asked for a refund at the same time, if BFL did not spend any of the pre-order cash, why did they need to take pre-orders? If they did spend some of the pre-order cash and something goes wrong (spending out of control due to over optimistic schedules for instance), then not everyone could get a refund.

This all sounds well and good, but missing the one key thing... IF you want criminal penalties, either state or federal, you'll need to convince an overworked DA to actually investigate and then once they are convinced of wrongdoing and the possibility of successful prosecution to actually prosecute this. Now seeing as they are shipping something that resembles what they promised... Good Luck.

[PuertoLibre]

I passed the same bar that you did. And yes its rude to think your psuedo law knowledge is better than mine. I stayed at a holiday inn express so it makes me an expert. I know that most sales issues are a civil matter. In these cases they want you to resolve before bringing to court. Judges want you to arbitrate before bringing a case to court. If one party refunds you the money back, the matter is pretty much dead. But again, unless you are trying to claim some kind of damages, (lol try explaining difficulty changes and lost minging profits to a judge) i doubt you have any case.

This was actually rehashed several times in several threads, but I can post a summary here:

Under federal law, several elements are required to prove fraud: a material false statement made with an intent to deceive, a victim’s reliance on the statement and damages.
You can look that up here. http://www.federalcrimefaq.com/what-constitutes-the-crime-of-wire-fraud/
BFL saying they had a prototype and a shipping date when they obviously did not and taking peoples money under those pretenses could not have been an accident. There was clear intent to deceive about the current and state shipping date of BFLs products.
I think everyone who made a BFL purchase relied on the shipping dates provided in order to calculate their risk and return.
The damages are trivial to illustrate, plug a Jalapeno in and it generates a revenue stream. Loss of that promised revenue stream is all you need tell the judge.

You cannot undo a criminal act just by giving a refund or any other act of goodwill for that matter. It is also not clear what would happen to BFL if everyone asked for a refund at the same time, if BFL did not spend any of the pre-order cash, why did they need to take pre-orders? If they did spend some of the pre-order cash and something goes wrong (spending out of control due to over optimistic schedules for instance), then not everyone could get a refund.

This all sounds well and good, but missing the one key thing... IF you want criminal penalties, either state or federal, you'll need to convince an overworked DA to actually investigate and then once they are convinced of wrongdoing and the possibility of successful prosecution to actually prosecute this. Now seeing as they are shipping something that resembles what they promised... Good Luck.

Me: Hey, I have a tip. There is this company that I believe is engaged in fraud.
DA: Why do you think they are committing fraud?
Me: Because they take several million dollars from thousands of customers and don't deliver 99.99% of the time. They simply refund your money with money from newer customers.
DA: What?! That almost sounds like a Ponzi scheme and outright fraud.
Me: I know, right?
Me: Please, investigate!

[davidspitzer]

I passed the same bar that you did. And yes its rude to think your psuedo law knowledge is better than mine. I stayed at a holiday inn express so it makes me an expert. I know that most sales issues are a civil matter. In these cases they want you to resolve before bringing to court. Judges want you to arbitrate before bringing a case to court. If one party refunds you the money back, the matter is pretty much dead. But again, unless you are trying to claim some kind of damages, (lol try explaining difficulty changes and lost minging profits to a judge) i doubt you have any case.

This was actually rehashed several times in several threads, but I can post a summary here:

Under federal law, several elements are required to prove fraud: a material false statement made with an intent to deceive, a victim’s reliance on the statement and damages.
You can look that up here. http://www.federalcrimefaq.com/what-constitutes-the-crime-of-wire-fraud/
BFL saying they had a prototype and a shipping date when they obviously did not and taking peoples money under those pretenses could not have been an accident. There was clear intent to deceive about the current and state shipping date of BFLs products.
I think everyone who made a BFL purchase relied on the shipping dates provided in order to calculate their risk and return.
The damages are trivial to illustrate, plug a Jalapeno in and it generates a revenue stream. Loss of that promised revenue stream is all you need tell the judge.

You cannot undo a criminal act just by giving a refund or any other act of goodwill for that matter. It is also not clear what would happen to BFL if everyone asked for a refund at the same time, if BFL did not spend any of the pre-order cash, why did they need to take pre-orders? If they did spend some of the pre-order cash and something goes wrong (spending out of control due to over optimistic schedules for instance), then not everyone could get a refund.

Interesting Discussion. Fraud both civilly and criminally are very closely related; although more commonly pursued in Civil court unless notorious, widespread or egregiousness:

Criminal fraud requires criminal intent on the part of the perpetrator, and is punishable by fines or imprisonment. Civil fraud, on the other hand, applies more broadly to circumstances where bad-faith is usually involved, and where the penalties are meant to punish the perpetrator and put the victim back in the same position before the fraud took place. The second point is important because civil proceeding are designed to put parties in an equity based pre harm condition and are not designed to assign criminal guilt.

While the exact wording of fraud charges varies among state and federal laws. the essential elements needed to prove a fraud claim in general include: (1) a misrepresentation of a material fact; (2) by a person or entity who knows or believes it to be false; (3) to a person or entity who justifiably relies on the misrepresentation; and (4) actual injury or loss resulting from his or her reliance.

Most DA's will only pursue a criminal fraud charge if there are clear signs of a all the elements of the crime. In my opinion refunding money when requested and the commencement of performance would tend to chill most DA's from pursuing such a charge. One can always bring a personal suit if they feel they were wronged, have proper standing in court and that the court can offer a legal remedy to redress the harm.

In my completely personal opinion (purely academic  - non legal advice), I do not see clearly all the elements of fraud from either a civil or criminal standpoint. One could argue breach of contract perhaps, but the best you could hope for would normally be the return of your money, which apparently can be procured through less expensive means then litigation. The hope for punitive damages springing from a breach of contract case would most likely be slim in this instance if at all.

Again, my personal advice is, ask for a refund if you are unhappy with BFL's progress. If you do not have an order pending with BFL, then you are not a proper plaintiff and would not have grounds for legal action and I question what you hope to derive from the time spent discussing this matter. If one requests a refund and is refused, which I have not heard of happening, then you can certainly seek a legal redress. That said, you would still have to prove breach of contract by BFL, which may or may not work in your favor depending on the legitimacy of your argument and the skill of your lawyer.

I fully understand that some people dislike BFL per se, and I am sure that one or more will respond to this post. I tried to be objective and merely state my understanding of the present state of affairs and the options likely open to people. For purposes of contextual disclosure, I have a preorder with BFL. I do not believe they have engaged in criminal or civilly pursuable  fraud. They have had many challenges and continue to work through them. The original specs have changed and will likely change before final shipment. While there appears to be ample material to demand a refund if I so wished, I am content to take receipt of the whatever substantially conforming goods they can produce. I do not see a financially viable alternative, so BFL still appears to be my best option for setting up a mining operation with ASICs. It appears to me that they are getting close to resolution having seen several of the 5gh/s units in action. Could my position change? Sure, anyone of a number of things could alter it, but for now I am planning to see it through.

If you are a preorder customer, you have to make your own similar decision, which may or may not be contrary to mine.