NOTICE: WARNING to NEW Customers of BUTTERFLY LABS INC (BFL)

[ripple]

The purpose of the OP was to provide a warning to New customers thinking of buying mining rings from BFL that orders placed today are unlikely to obtain a satisfactory return on investment, and to give them some background so that they can better understand their expected return and make a more informed decision.

What is relevant to New customers is whether they should part with their money today or not. 

At present Butterfly Labs are offering 5 GH/s, 25 GH/s and 50 GH/s units, at $274, $1,249, and $2,499 respectively plus shipping.

New customers must face the prospect of any receiving products ordered today in January 2014. By this time it is unlikely that they will receive the expected return on their investment over the life of the product.

As stated in the OP persons existing already in the BFL pre-order list, like you and I, and many others may make a lot of money.

The reason there is much aggravation amongst early adopters that placed orders for BFL equipment in 2012 that a 5 GH/s machine would make around $2,000 profit and a 50 GH/s machine around $20,000 profit with Bitcoin prices at $120 if started today and mined 24/7 to end 2014, and a hell of a lot more had units shipped when promised.

New customers could be better off to wait and see whether BFL will ever become up-to-date with the deliveries of outstanding orders. If they do a new customers can make more sensible decisions based on the current difficulty levels and this would be an excellent and ideal situation.

Congratulations, you made a good original investment. I hope you receive your two units very soon so that you can immediately start mining and make hay while the sun shines.

As far as the viability of units ordered today and received in January 2014, here are the continuation of the difficulty levels at 15%:

2013
31-Dec   15.00%   222,095,805

2014
11-Jan   15.00%   255,410,176
22-Jan   15.00%   293,721,702
02-Feb   15.00%   337,779,958
13-Feb   15.00%   388,446,951
24-Feb   15.00%   446,713,994
07-Mar   15.00%   513,721,093
18-Mar   15.00%   590,779,257
29-Mar   15.00%   679,396,146
09-Apr   15.00%   781,305,568
20-Apr   15.00%   898,501,403
01-May   15.00%   1,033,276,613
12-May   15.00%   1,188,268,105
23-May   15.00%   1,366,508,321
03-Jun   15.00%   1,571,484,569
14-Jun   15.00%   1,807,207,255
25-Jun   15.00%   2,078,288,343
06-Jul    15.00%   2,390,031,595
17-Jul    15.00%   2,748,536,334
28-Jul    15.00%   3,160,816,784
08-Aug   15.00%   3,634,939,301

Unfortunately the "BitForce 25 GH/s SC" from Butterfly Labs priced at $1,249 plus shipping only hashes at 25 GH/s, not 60 GH/s.

BFL products can be viewed on following pages:

https://products.butterflylabs.com/

New customers thinking of buying mining rigs from BFL are warned that orders placed today are unlikely to obtain their Return on Investment.

At that diff. and current $/btc, a 60GH/s single priced $1299 will make $450/month, pays itself back in 13 weeks,
At that diff. and current $/btc, a 50GH/s single priced $2499 will make $373/month, pays itself back in 29 weeks,
good enough for me.

What has "Unfortunately the "BitForce 25 GH/s SC" from Butterfly Labs priced at $1,249 plus shipping only hashes at 25 GH/s, not 60 GH/s." to do with it?
I'm was giving you the calculations for the 50GH/s and 60GH/s Single, not the LITTLE Single, at your own assumed 222mill. diff. for 12-2013, see what you quoted....
Besides that, the 25GH/s has the same payback time as the 50GH/s since it is half the price of a 50GH/s unit, so it would still be ~29 weeks, at your assumed 222mill. diff.
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[SLok]

BFL states all pre-orders till now should be out before august-start September (90 days quoted). An assumption, I know, but your figures, whether it be delivery dates or difficulty figures, are all assumptions, with assumptions made on the outcome of assumptions.
Hence the over 100% difference it your 2 difficulty predictions for 12-2013.
By your same assumptions, any ASIC device that is not delivered within a couple of weeks is a waste of money. I've shown what the monthly revenue and "pay for itself" time for a unit with BFL's GH/s and price tag is, with the maximum difficulty you set for 12-2013, and if received in 12-2013. It looked good.

I can only conclude your whole warning is useless FUD.

[ripple]

As has been stated your maths is flawed.

31-Dec   15.00%   222,095,805

At that diff. and current $/btc, a 60GH/s single priced $1299 will make $450/month, pays itself back in 13 weeks,
At that diff. and current $/btc, a 50GH/s single priced $2499 will make $373/month, pays itself back in 29 weeks,
good enough for me.

Your math is flawed.  

Assuming the difficult continue to grow at 7.5% per week, your earning from 60GH will be:

$450 - 1st month
$315 - 2nd month
$220 - 3rd month
$154 - 4th month
$107 - 5th month
$75 - 6th month

Summing that up, and it will take 6 months or 24 weeks to earn back your $1299.    For the 50g/h at $2499, you will never make back your investment (and if you think bitcoin price will shoot up to $1000/btc.. you might as well spend the 2499 and buy the BTC today).

That's assuming late shipping of Dec 2013.  

Obviously, if you can receive the machine earlier, there will be some decent profit for both machine.

[ripple]

The Genesis Block reports that 890 pre-orders have been successfully completed at KnCMiner at around 160 TH/s.

Jupiter hashes at 350 GH/s, shipment is also in September 2013, with a $6,995 USD price tag.
Saturn hashes at 175 GH/s, shipment is in September 2013, with a $3,795 USD price tag.

The units are built on a 28nm processes which has greater efficient power efficiency, as well as mining density, allowing users more hashing power.

The Jupiter cost ratio is $19.98 per Gh/s, and the Saturn $21.68 per Gh/s.

"Each order consists of at least one Saturn or Jupiter device, however it is likely that multiple devices were purchased in the same order. Even if these were all the smaller devices, this would result in over 160 TH/s of miners joining the network in September. This figure could easily be doubled to account for the faster miner, as well as multiple devices in the same order. Given the rapid increase in network speed over the last few months, for KnCMiner customers September can’t come fast enough."

With all this new hashing power coming online from Avalon, ASICminer and KnCMiner there is more likelihood of hash levels and therefore difficulty levels having continuous high increase levels from August and September 2013.

Given the advice from Genesis Block that "Pre-orders placed now for any of Butterfly Lab’s units are not expected to ship until early 2014", new customers thinking of placing with Butterfly Labs (BFL) should shop around for more reliable suppliers that keep to promised deadlines. Alternatively wait for Butterfly Labs to clear the majority of their one year old pre-order queue before ordering.

A bird in the hand is worth two butterflies in the bush!

The 50 GH/s unit from BFL has a cost ratio of $49.98 per GH/s and the 25 GH/s unit $49.96 per GH/s which are now both looking rather inadequate to new customers especially given the expected delivery in early 2014.

Last month ASICMiner begun production of 10,000 USB miners running at 330 MH/s. These units have been selling in batches of 300, and while priced at an expensive 1.99 BTC each, it shows the competition at all target users is increasing.

[zvs]

I don't think any new customers are going to take there time to read that absurdly long post  

me neither

i read the whole thing, but i was never planning on preordering from BFL, anyway.

these other people that are preordering at the moment, it probably flies right over their head

and difficulty levels going up 15% seems very conservative to me

[ripple]

For those that just like a quick twitter type message they can read the first two sentences only and should get the message, while those that prefer comprehensive information can read the whole post if interested.

The message was intended only for new customers who might not be aware of the long delivery delays by BFL and can find all the relevant information in one place to allow them to make a better informed investment decision.

I'm happy you read the whole post. Yes, I agree with you that 15% is conservative for average future increases in difficulty levels.  What is your estimate of an average increase level?  At 18% the difficulty get levels pretty high pretty quickly and some people are astounded by the high expected difficulty levels of 362,275,970 by end Dec 2013.

At 18% increase in difficulty levels, the time of delivery becomes critical factor in obtaining a suitable return on investment. For example new orders from KnCMiner will arrive sooner and have a two and half times better performance than those from BFL.

i read the whole thing, but i was never planning on preordering from BFL, anyway.

these other people that are preordering at the moment, it probably flies right over their head

and difficulty levels going up 15% seems very conservative to me

[jayeeyee]

In the end, this is all speculation and rough estimates.  No one can say for certain how the future economy for Bitcoin will turn out.  No one can say with the utmost confidence exactly how high difficulty will soar or how low/high the value of BTC will turn out to be in the future.  Regardless of who you buy your ASIC from, they all provide risk.  KnC is fairly new and who knows what may or may not happen (once again - speculation).  ASICMiner and Blades isn't as cost-effective as the current big boys.  I've actually had enough sanity to read through 2 pages and I've come to the conclusion that the OP post does more harm than good when it comes to pre-orders of ANY ASIC investment.  Although the harm does seem to be targeted @ BFL.  Who's to say other ASIC suppliers won't run into a bottleneck?  You also have to factor in there is a wait-time/pre-order for other ASIC devices as well.. such as Avalon & KnC.  If I last recall, there are still some batch 1 Avalon orders that hasn't been shipped yet and about only 5% of Avalon orders left the building (I might be wrong on the % as I'm quoting it from somewhere else)

All in all.. all investment has risk.  Happy mining, while you still can.

[zvs]

For those that just like a quick twitter type message they can read the first two sentences only and should get the message, while those that prefer comprehensive information can read the whole post if interested.

The message was intended only for new customers who might not be aware of the long delivery delays by BFL and can find all the relevant information in one place to allow them to make a better informed investment decision.

I'm happy you read the whole post. Yes, I agree with you that 15% is conservative for average future increases in difficulty levels.  What is your estimate of an average increase level?  At 18% the difficulty get levels pretty high pretty quickly and some people are astounded by the high expected difficulty levels of 362,275,970 by end Dec 2013.

At 18% increase in difficulty levels, the time of delivery becomes critical factor in obtaining a suitable return on investment. For example new orders from KnCMiner will arrive sooner and have a two and half times better performance than those from BFL.

i read the whole thing, but i was never planning on preordering from BFL, anyway.

these other people that are preordering at the moment, it probably flies right over their head

and difficulty levels going up 15% seems very conservative to me

It'll go up 20%, 25% or more for the next few cycles.  Then eventually the hobbyists will stop spending all their excess cash and the difficulty level won't increase as much.

all the prices for ASICs and such I have seen lately are ludicrous

but I applaud the business savvy of those folks that have sold/are selling their avalon 2's atm

[inevertell]

I enjoy how utterly correct the OP was here. Even underestimated the climb in difficulty.

AND STILL there were people here laughing him off ... ahh bitcoin community you never cease to make ME laugh out loud.

[BobMarley]

I doubt they will ever ship

[inevertell]

Whether they ship or not is no longer relevant.

They will not mine more than what you have paid.

The OP was saying this a long time ago and people were basically laughing him off.

Yet his figures were even underestimated and difficulty has risen much higher, and these machines are basically useless for profiting anything.

Unless of course the price of bitcoin skyrockets but back then, as with now, and probably forevermore (unless you are willing to risk pre-funding a company to make these types of units and HOPE things work out, like it seems KNC buyers are going to win a little if you are first day delivery), you are better off buying coin and sitting on it or investing with it.

Mining can feel just so nice to be a part of in a way, and when it was profitable it made a lot of sense, i'd love to see miners priced at estimated ROI + 2% when for sale retail(in-store) that way you can make back nearly what you put in, and if there is any increase in exchange rate, even tiny.. you profit.

I think it would give a better incentive to keep people mining. Basically the network has been expanding exponentially on people LOOSING money when they didn't understand the market before purchasing, a few are profiting large because of a form of favouritism or elitism ("we were here first so we should get the only good deal" or "well be have the most fiat so we should have the most bitcoin")

But with so many pawns out there, the network will continue to grow on the backs of suckers, or on the opposite end, on the exponentially growing backs of giant corporations who are able to invest heavily in their own hardware for MAX profits. Enjoy the present moment 

I doubt they will ever ship

[GigaWave]

I enjoy how utterly correct the OP was here. Even underestimated the climb in difficulty.

AND STILL there were people here laughing him off ... ahh bitcoin community you never cease to make ME laugh out loud.

Plenty of other people were also saying the same thing (myself included, I am even quite surprised by how low my own estimates were.(I even overestimated to account for a lack of information) Product of the lack of information by ASIC mfgs.) before the OP.  It seems people have still been buying like crazy. Hopefully this has stopped at this point as the ASIC Tsunami is within viewing range, the true size has yet to be revealed though.  And back to BFL in specific, Looks like they missed their "Ship the back log by end of September" by about 6 months....huh who would have thought that BFL would lie again?  ...I mean have a delay....At least they stopped with the "Two weeks" nonsense..now it's just infinite.

[Bicknellski]

The purpose of the OP was to provide a warning to New customers thinking of buying mining rings from BFL that orders placed today are unlikely to obtain a satisfactory return on investment, and to give them some background so that they can better understand their expected return and make a more informed decision.

What is relevant to New customers is whether they should part with their money today or not. 

At present Butterfly Labs are offering 5 GH/s, 25 GH/s and 50 GH/s units, at $274, $1,249, and $2,499 respectively plus shipping.

New customers must face the prospect of any receiving products ordered today in January 2014. By this time it is unlikely that they will receive the expected return on their investment over the life of the product.

As stated in the OP persons existing already in the BFL pre-order list, like you and I, and many others may make a lot of money.

The reason there is much aggravation amongst early adopters that placed orders for BFL equipment in 2012 that a 5 GH/s machine would make around $2,000 profit and a 50 GH/s machine around $20,000 profit with Bitcoin prices at $120 if started today and mined 24/7 to end 2014, and a hell of a lot more had units shipped when promised.

New customers could be better off to wait and see whether BFL will ever become up-to-date with the deliveries of outstanding orders. If they do a new customers can make more sensible decisions based on the current difficulty levels and this would be an excellent and ideal situation.

Congratulations, you made a good original investment. I hope you receive your two units very soon so that you can immediately start mining and make hay while the sun shines.

As far as the viability of units ordered today and received in January 2014, here are the continuation of the difficulty levels at 15%:

2013
31-Dec   15.00%   222,095,805

2014
11-Jan   15.00%   255,410,176
22-Jan   15.00%   293,721,702
02-Feb   15.00%   337,779,958
13-Feb   15.00%   388,446,951
24-Feb   15.00%   446,713,994
07-Mar   15.00%   513,721,093
18-Mar   15.00%   590,779,257
29-Mar   15.00%   679,396,146
09-Apr   15.00%   781,305,568
20-Apr   15.00%   898,501,403
01-May   15.00%   1,033,276,613
12-May   15.00%   1,188,268,105
23-May   15.00%   1,366,508,321
03-Jun   15.00%   1,571,484,569
14-Jun   15.00%   1,807,207,255
25-Jun   15.00%   2,078,288,343
06-Jul    15.00%   2,390,031,595
17-Jul    15.00%   2,748,536,334
28-Jul    15.00%   3,160,816,784
08-Aug   15.00%   3,634,939,301

Unfortunately the "BitForce 25 GH/s SC" from Butterfly Labs priced at $1,249 plus shipping only hashes at 25 GH/s, not 60 GH/s.

BFL products can be viewed on following pages:

https://products.butterflylabs.com/

New customers thinking of buying mining rigs from BFL are warned that orders placed today are unlikely to obtain their Return on Investment.

At that diff. and current $/btc, a 60GH/s single priced $1299 will make $450/month, pays itself back in 13 weeks,
At that diff. and current $/btc, a 50GH/s single priced $2499 will make $373/month, pays itself back in 29 weeks,
good enough for me.

What has "Unfortunately the "BitForce 25 GH/s SC" from Butterfly Labs priced at $1,249 plus shipping only hashes at 25 GH/s, not 60 GH/s." to do with it?
I'm was giving you the calculations for the 50GH/s and 60GH/s Single, not the LITTLE Single, at your own assumed 222mill. diff. for 12-2013, see what you quoted....
Besides that, the 25GH/s has the same payback time as the 50GH/s since it is half the price of a 50GH/s unit, so it would still be ~29 weeks, at your assumed 222mill. diff.

[/quote]

Update with the Monarch and current product under-performance and failures?

[sid7039]

BFL:
http://www.urbandictionary.com/define.php?term=bfl

[bitcoin_UK]

Certainly take this with a pinch of salt. I've received many shipments from Batterfly labs and have been as happy as I could be, granted there have been endless delays but what company can say they have always shipped on time. It's just the name of the game. Bitcoin ASICS are still generally new to us despite the evolution of them going so fast. It must be hard for these businesses to keep up, every time they ship, people no longer want that product due to the difficulty increase.

[freebit13]

Certainly take this with a pinch of salt. I've received many shipments from Batterfly labs and have been as happy as I could be, granted there have been endless delays but what company can say they have always shipped on time. It's just the name of the game. Bitcoin ASICS are still generally new to us despite the evolution of them going so fast. It must be hard for these businesses to keep up, every time they ship, people no longer want that product due to the difficulty increase.

Bitmain perhaps?

[h3rlihy]

I have personally not had any trouble with BFL. I ordered two jalapenos real late but got them pretty much immediately. They were still no good to me though but I was able to ebay them for a profit. Still waiting on a 300 gh/s monarch though but got it during the sale so not expecting it until 2017 when it will be used to keep my room warm.