Butterfly Labs refusing refunds?

[Inedible]

It is not illegal because of the mechanisms they use.

The way the money is "hidden" is by utilising over paid services.

So for example if you own a Data Centre you can quite easily create a second company that provides the electricity - This then sells the power to the Data Centre at above market rate so the profit of the data centre is reduced and share holders in the data centre will have reduced dividend payment while the second company has extremely high profits that the share holders of the Data Centre will receive no dividends from.

With ASICMiner for example - Do they own the facility that produces the ASIC chips or is this owned by "Someone" else that then sells them to ASICMiner. What is the arrangement with their Data Centre? Do they own it or lease space? Who are they leasing the space from. Who provides the connectivity?
Who actually owns the businesses that provide these services?

I am not saying ASICMiner undertake these practices but you can not say for certain.

This is the problem - they can do it and it is fully legitimate and an absolute nightmare to prove.

Is this not a risk with any company?

Of course it is - that is why Satoshi stated that one of the main reasons for creating Bitcoins was to stop centralisation and allowing these types of practises to take place.

People arguing that buying shares in large mining companies is a good thing do not understand how big business works.

I don't follow - can you elaborate?

[Pastelarts]

BFL no good man ... 

[rovchris]

If everyone stopped mining and just bought shares in large mining companies the amount of money available would be significantly less than if people were mining themselves due to all the extra costs that are worked into the accounts of big companies.

For example the cost for you to mine one bitcoin is $10 minus your operating costs. - You would obviously seek to minimise your costs as much as possible as this is in your interest.

That same Bitcoin mined through a mining corporation will be $10 minus many overinflated costs. These guys would seek to maximise costs to an extent if they are benefiting through revenue from their partner companies.

[canth]

If everyone stopped mining and just bought shares in large mining companies the amount of money available would be significantly less than if people were mining themselves due to all the extra costs that are worked into the accounts of big companies.

For example the cost for you to mine one bitcoin is $10 minus your operating costs. - You would obviously seek to minimise your costs as much as possible as this is in your interest.

That same Bitcoin mined through a mining corporation will be $10 minus many overinflated costs. These guys would seek to maximise costs to an extent if they are benefiting through revenue from their partner companies.

That's why I said something similar to AM or a cooperative whereby shareholders received voting rights in operating the mining cooperative. Ultimately, a single entity is going to be able to negotiate lower costs if they design and purchase their own chips, lease data center space and operate a farm of mining hardware. There's no way that miners operating at their home will be able to compete on the cost side. We're going to have to form or invest in "companies" if we want to keep mining a profitable venture. AM is not a perfect example, for the items mentioned but it's one of the more successful examples at the moment.

[rovchris]

If everyone stopped mining and just bought shares in large mining companies the amount of money available would be significantly less than if people were mining themselves due to all the extra costs that are worked into the accounts of big companies.

For example the cost for you to mine one bitcoin is $10 minus your operating costs. - You would obviously seek to minimise your costs as much as possible as this is in your interest.

That same Bitcoin mined through a mining corporation will be $10 minus many overinflated costs. These guys would seek to maximise costs to an extent if they are benefiting through revenue from their partner companies.

That's why I said something similar to AM or a cooperative whereby shareholders received voting rights in operating the mining cooperative. Ultimately, a single entity is going to be able to negotiate lower costs if they design and purchase their own chips, lease data center space and operate a farm of mining hardware. There's no way that miners operating at their home will be able to compete on the cost side. We're going to have to form or invest in "companies" if we want to keep mining a profitable venture. AM is not a perfect example, for the items mentioned but it's one of the more successful examples at the moment.

You are correct to a certain extent - a single entity may be able to negotiate lower costs for commodities (electricity, DC space etc etc) but this is offset by the massive overhead of employees.

In any big company just look at the madness that goes on - 100's of total non jobs - The cost of regulation when a business reaches a certain size is also massive. HR departments AKA people that generate the business no money at all yet still command high salaries.

If you have ever run a business you will soon see the biggest cost is personnel it dwarfs all the other costs.

Never underestimate human greed - it will always find a way to corrupt any system given any means of control - do not give them control and it can not be corrupted.

If power is centralised it will take the Governments 10 seconds to close down the network as it easy to shut one company down versus hundreds of thousands of individual miners. If the bit torrent network had followed this route to centralisation it would have been gone long ago.

[Flying Hellfish]

I just wanted to say that CC and PP buyer protection have limits (as pointed out) but CC companies differ in the length of time they offer buyer protection so it's always best to check with the issuing company on exactly how long they actually cover.

Even if someone happened to be outside both CC and PP buyer protection limits (or if they chose a different payment method) if BFL is breaking FTC regulations (which my personal opinion says they are) a consumer can still file a complaint with the FTC.  Granted it won't get your fiat back right away but you still have recourse.

Even if someone charged back and got their refund there is still nothing stopping them from filing a complaint with the FTC just to let them know about BF Labs (if you believe they broke FTC regulations why not let them know what BFL did to you).  Even if your not American BF Labs is and I guess the FTC still wants to hear about it.

FYI

Direct link to FTC compliant form:

https://www.ftccomplaintassistant.gov/FTC_Wizard.aspx?Lang=en





More information from the link above:

WHERE TO GO FOR HELP

For more information about the Mail or Telephone Order Merchandise Rule, call the Federal Trade Commission toll-free: 1-877-FTC-HELP; write: Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, N.W., Washington, DC 20580; or visit: www.ftc.gov.

You also may want to contact relevant trade associations, such as the Direct Marketing Association. Contact the DMA’s Washington, DC office at: 202-955-5030; write: 1111 19th Street, N.W., Suite 1100, Washington, DC 20036-3603; or visit: www.the-dma.org.

Your local U.S. Postal Service or consumer protection agency may offer additional assistance. State and local governments also may have requirements with which you must comply. You should consult appropriate state agencies for information about laws that affect your business.




For More Information

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

[rovchris]

After seeing your original post about the FTC I sent an email to BFL highlighting the case.

Many thanks for your input!

Unsurprisingly they have not responded!

[greenbtc]

After seeing your original post about the FTC I sent an email to BFL highlighting the case.

Many thanks for your input!

Unsurprisingly they have not responded!

I wouldn't expect anything other than a bunch of swearing and childish remarks in rebuke, anyway.

[Inedible]

They can afford lawyers now.

[greenbtc]

They can afford lawyers now.

To do what?

[Inedible]

They can afford lawyers now.

To do what?

To ensure you getting a refund is as painful as possible and to get themselves out of any legal difficulty they've left themselves in.

Cost/benefit analysis should make a lawyer very worthwhile by now.

[rovchris]

They can afford lawyers now.

To do what?

To ensure you getting a refund is as painful as possible and to get themselves out of any legal difficulty they've left themselves in.

Cost/benefit analysis should make a lawyer very worthwhile by now.

This is true - but would not impact on people doing chargebacks against paypal - The lawyers would definitely have their hands full against the "pit bull" lawyers of Paypal.

But hopefully people will be able to get their money back.

BFL are cretins - the amount of money they took in pre orders before even having a working device and then to still keep taking peoples money when they obviously had problems is nothing short of criminal.

[greenbtc]

They can afford lawyers now.

To do what?

To ensure you getting a refund is as painful as possible and to get themselves out of any legal difficulty they've left themselves in.

Cost/benefit analysis should make a lawyer very worthwhile by now.

I am fairly certain, while they can try to keep people from getting refunds, if this went to court they would be finding themselves in hot water with all the laws they are breaking. I would assume the only reason for them to have legal council at this point is to protect Josh's-maybe-not-so-virgin-butthole already. He does hang out with convicted felons, after all.

[canth]

You are correct to a certain extent - a single entity may be able to negotiate lower costs for commodities (electricity, DC space etc etc) but this is offset by the massive overhead of employees.

In any big company just look at the madness that goes on - 100's of total non jobs - The cost of regulation when a business reaches a certain size is also massive. HR departments AKA people that generate the business no money at all yet still command high salaries.

If you have ever run a business you will soon see the biggest cost is personnel it dwarfs all the other costs.

Never underestimate human greed - it will always find a way to corrupt any system given any means of control - do not give them control and it can not be corrupted.

If power is centralised it will take the Governments 10 seconds to close down the network as it easy to shut one company down versus hundreds of thousands of individual miners. If the bit torrent network had followed this route to centralisation it would have been gone long ago.

I agree, human greed is a persistent element which cannot be ignored. To a certain extent, it's what has powered bitcoin's rise by creating incentives to early adopters and miners.

Fast forward 1-2 years from now. AM will not be the only firm attempting to take in 20-40% of the > 3600 BTC generated per day - I imagine that there will be 10+ firms using chinese factories and data centers in tax/regulatory friendly environments. Presuming BTC stays at even $50/BTC then that means that these companies will be competing for a share of $180,000 in revenue per day. I'd say that you could easily have 10 firms using low cost Chinese labor bringing in $3M a year on average and that still leaves 50% of the hashrate for individual miners. That's with each firm only making up 5% of the hashrate.

Competition will drive smaller profits but for a greater number of firms competing against each other. I'm not necessarily saying that this is necessarily a good thing, but it will at least make the 51% attack more difficult and less likely to be executed by any non-state sponsored entities since there wouldn't be a profit in it.

[gollygosh]

what an amazing thing to happen - no refunds - even on their TOS - wow