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Author Topic: 1GH/s, 20w, $500 — Butterflylabs, is it a scam?  (Read 116611 times)
fred0
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November 25, 2011, 12:05:10 PM
 #721

I know that is what the website would lead you to think however in my experience military contracting does not work this way.

I honestly do not buy it. Just a hunch.
Provided proof that this tech works, how may rig boxes are you going to buy?

Pre-orders start TONIGHT!
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November 25, 2011, 12:10:13 PM
 #722

http://www.alloscomp.com/bitcoin/calculator.php

Also your numbers at 50% margin would be $400 as a cots to them right? (Brain is too fuzzy right now to think:P) So 6.4 months. True this is ignoring some costs but nothing that a month of mining would cover. R and D is clearly included.

But you have to compare it to selling. You are suggesting they would do better not selling but mining themselves. Then your comparison point is $599 and how long it takes to make more money mining than selling.

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Honestly my 1% thinking that this might not be a scam is that they thought of something clever and that it can be copied. I doubt they ordered 10,000 chips yet have so many other failings business wise.

many other failings? Ive not seen any so far. To date they have kept every promise, every deadline and delivered on every claim (even if thats not much to date, let check back tomorrow) and they have acted quite professionally in their communication. I dont see "failings".

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November 25, 2011, 12:14:40 PM
 #723

I know that is what the website would lead you to think however in my experience military contracting does not work this way.

it does. Three letter agencies have little issues buying stuff from startups if that stuff is leading edge. Having worked for a 20 people startup that sold CMOS image sensors to NASA and DARPA I can tell you that much. Its 100x harder to get a contract to sell boots or truck tires.
-And yes I realize those arent 3 letter agencies Smiley

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November 25, 2011, 12:23:29 PM
 #724

I know that is what the website would lead you to think however in my experience military contracting does not work this way.

it does. Three letter agencies have little issues buying stuff from startups if that stuff is leading edge. Having worked for a 20 people startup that sold CMOS image sensors to NASA and DARPA I can tell you that much. Its 100x harder to get a contract to sell boots or truck tires.
-And yes I realize those arent 3 letter agencies Smiley
There may be some miners that have a spare $200k to buy a supercomputer, but any military/intel agency would consider it a bargain. Just guessing but 10x performance of the rig box ~550 GHash/s per unit.  I seriously doubt that miners are the primary customer.
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November 25, 2011, 12:34:06 PM
 #725

Yes, assuming this is not just a scam...   
Fair enough, we will see soon.
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November 25, 2011, 01:10:28 PM
 #726

The way to do it is not with a low budget website. It's having a guy on the inside or paying a guy to take you to someone on the inside.

Nonsense. You might need that to get a contract to supply the military with leather boots or toilet paper. You dont need anything like that if you have a product they want and no one else sells.

Im not saying they already have a contract, just that if 3 letter agencies or US military or military contractors have an interest in SHA hashing and they dont have access to a product with similar performance /$ and /W they will be knocking on their doors without BFL so much as placing a phone call.  

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96% scam.

3% he got a limited number of high end chips for cheap (almost free) and used them for this product. Extra from some other project he might have been involved with.

1% he did something smart with over the counter stuff.

80% they ported an FPGA implementation to a structured ASIC like Altera Fast Path. That would make it pretty easy achieve those performance and performance /W numbers with costs, from what I read, being on the order of $150K for the first 1000 chips (that includes NRE). The next 10.000 chips would be a lot cheaper even. Turn around time is on the order of 3 months. Its really not difficult. Hobbyists here have made working FPGAs, from there to a structured ASIC is trivial. It just costs money. The performance and efficiency gains are automatic, simply a result of the process. They are also quite predictable.

Now the fact this is so easy and relatively affordable does cast doubts on any future three letter US agencies business. I strongly suspect these already have done that, if not even full custom ASICs. Those costs are closer to millions of $, but Im sure the NSA can afford that. There are plenty of other parties that could be interested in this that are not called NSA/CIA however, particularly if BFLs product is flexible enough to be used in very different applications than SHA hashing as seems to be the case.

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November 25, 2011, 01:16:35 PM
 #727

So you think they invested at least $150k into this already?

If its s-asic, clearly. You think thats much? Even double that is small change for a high tech startup. The image sensor company I worked for started with just over 1 million euro, and that was considered (too) low by our VCs.

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November 25, 2011, 01:28:20 PM
 #728

Everything Ive seen is consistent with a small high tech startup. Thats why we bet opposite. We'll find out who got it right soon enough.

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November 25, 2011, 01:30:23 PM
 #729

Goat, just 2 things I want to say to you:

1 - You don't get rich by digging gold... you get rich by selling shovels to miners!

2 - Do you already have your socks off and the video camera ready to tape the moment you'll eat them?

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November 25, 2011, 01:34:42 PM
 #730

Everything Ive seen is consistent with a small high tech startup. Thats why we bet opposite. We'll find out who got it right soon enough.
My concern with the bet is the ship date, not with the scam.  Although BFL has hit their date estimates thus far, I can see circumstances occurring where they miss the 3Jan12 deadline stated in the bet.
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November 25, 2011, 01:38:26 PM
 #731

My concern with the bet is the ship date, not with the scam.  Although BFL has hit their date estimates thus far, I can see circumstances occurring where they miss the 3Jan12 deadline stated in the bet.

Don't worry the website says pre-orders will ship in 4-8 weeks. 
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November 25, 2011, 01:39:50 PM
 #732

This is what I think,

96% scam.

3% he got a limited number of high end chips for cheap (almost free) and used them for this product. Extra from some other project he might have been involved with.

1% he did something smart with over the counter stuff.
If this is really your view then I have a great opportunity for you to make money.
At a 96% probability that it's a scam, giving someone odds 1 to 24 would mean that in the long run you would break even (96 out of a 100 times you'd win 1 (totalling 96 in prizes), 4 out of 100 times the other party would win 24 (totalling 96 in prizes).

I am all for fulfilling this bet, and I will even give you odds 1 to 10, so that if your probabilites hold up, you will come out with the most money in the end (96 out of a 100 times you'd win 1 (totalling 96 in prizes), 4 out of 100 times I would win 10 (totalling 40 in prizes).

Please do tell me how we can arrange this bet, so that you don't miss out on this opportunity to make money.
fred0
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November 25, 2011, 01:40:33 PM
 #733

My concern with the bet is the ship date, not with the scam.  Although BFL has hit their date estimates thus far, I can see circumstances occurring where they miss the 3Jan12 deadline stated in the bet.

Don't worry the website says pre-orders will ship in 4-8 weeks.  
I am so relieved.

But that makes the bet interesting...
DeathAndTaxes
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November 25, 2011, 01:42:33 PM
 #734

Goat, just 2 things I want to say to you:

1 - You don't get rich by digging gold... you get rich by selling shovels to miners!

This.  Personally I think this is a scam but if it wasn't a scam and I ran the company no way in hell would I be mining. 

Cashflow on turning over units (sold at a reasonable price) is 20x (maybe 50x) higher than mining yourself.  Plus once sold your risk is gone (it is assumed by the miner).  IF someone has a device like this it makes much more sense to sell it then mine it.

Still the price point doesn't make any sense.  A GPU rig costs about $1 per watt and consumes massive electricity.  Selling this this for $800 would be cheaper than a GPU rig and use 90% less electricity.  No reason they company couldn't cut prices in the future to keep demand up.

AMD sells a 5970 today for $300 new but they didn't launch it at $300 new.  They launched it at $749 and slowly declined the price over 3 years to keep up demand.  When demand falls, drop price, rinse and repeat.

P4man
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November 25, 2011, 01:45:45 PM
 #735

My concern with the bet is the ship date, not with the scam.  Although BFL has hit their date estimates thus far, I can see circumstances occurring where they miss the 3Jan12 deadline stated in the bet.

Same concern here. In general you would expect delays; looking at the startup I used to work for, our first standard product was almost 12 months late and still performed a whole lot worse than projected.

Then again, what BFL is doing ought to be much less risky with far less unknowns. If its Altera Fast path, then Altera guarantees you it will work if it works on FPGA, and they must have had working FPGAs for a long time. The photos on their site show multiple PCBs, so they probably have working silicon and Inaba is apparently testing one now (meaning the software would work on some level at least) so Im optimistic they can ship at least a few units this year.

But like you, Im more concerned about losing this bet due to a minor slip like buggy software, than losing the bets for being fundamentally wrong.

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November 25, 2011, 01:53:28 PM
 #736

Since so many things can go wrong I thought the 2 to 1 odds would make it more fair to you. I also gave a window of what 10% or 20% on their numbers to be more fair to you/them.  Shat can happen, and my claim is its a scam. So allowances were made. I thought I was being reasonable.

I was talking about the bet on "bets of bitcoin" which leaves BFL no margin whatsoever for missing their promises. That bet I might lose. Im not too concerned about my bet with you, but should point out its only 2-1 odds and not 24-1 as you claim is your assessments of the odds of BFL being legit. Quite a good deal you got there.

fred0
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November 25, 2011, 01:57:59 PM
 #737

My concern with the bet is the ship date, not with the scam.  Although BFL has hit their date estimates thus far, I can see circumstances occurring where they miss the 3Jan12 deadline stated in the bet.
Same concern here. In general you would expect delays; looking at the startup I used to work for, our first standard product was almost 12 months late and still performed a whole lot worse than projected.

Then again, what BFL is doing ought to be much less risky with far less unknowns. If its Altera Fast path, then Altera guarantees you it will work if it works on FPGA, and they must have had working FPGAs for a long time. The photos on their site show multiple PCBs, so they probably have working silicon and Inaba is apparently testing one now (meaning the software would work on some level at leas.t) so Im optimistic they can ship at least a few units this year.

But like you, Im more concerned about losing this bet due to a minor slip like buggy software, than losing the bets for being fundamentally wrong.
Since so many things can go wrong I thought the 2 to 1 odds would make it more fair to you. I also gave a window of what 10% or 20% on their numbers to be more fair to you/them.  Shat can happen, and my claim is its a scam. So allowances were made. I thought I was being reasonable.
It is reasonable.  But the risk is still there.  Pre-orders started in mid-Oct, 8 week delivery puts us in mid-Dec.  This gives a two week buffer (in the holiday season) for shipping.  I think they can do it, but still risky.
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November 25, 2011, 02:00:13 PM
 #738

It is reasonable.  But the risk is still there.  Pre-orders started in mid-Oct, 8 week delivery puts us in mid-Dec.  This gives a two week buffer, (in the holiday season) for shipping.  I think they can do it, but still risky.

Well except for the website still advertising 4-8 weeks nearly 6 weeks later.
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November 25, 2011, 02:48:04 PM
 #739

It is reasonable.  But the risk is still there.  Pre-orders started in mid-Oct, 8 week delivery puts us in mid-Dec.  This gives a two week buffer, (in the holiday season) for shipping.  I think they can do it, but still risky.

Well except for the website still advertising 4-8 weeks nearly 6 weeks later.
Could they be building the boards on request?
Certainly it would seem that way - if we assume it's not a scam. Would there be anything wrong with them building the boards as they get in orders, instead of having x boards pre-built and ready to go?

@Goat: I made a very reasonable offer to you as well, considering your estimate of a 96% probability that it's a scam. I understand it if you won't accept it, cause I'd be happy to put up 100 BTC at 10 to 1 odds now. Given reasonable terms, that is. Ie. allowing some time for delays. If they are a scam, your winnings would only be delayed a month or so.

I obviously don't think there's a 96% probability that it's a scam now. A conservative guess from me right now would be 50% (with great uncertainty), I think.
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November 25, 2011, 03:08:39 PM
 #740

Could they be building the boards on request?
Certainly it would seem that way - if we assume it's not a scam. Would there be anything wrong with them building the boards as they get in orders, instead of having x boards pre-built and ready to go?

There are many other plausible explanations; like simply not having updated that part yet of the site yet and not having much reason to, until they finish the software and are ready to ship their first board so they could give a more accurate estimate; although that estimate Im sure would also depend on the amount of preorders they are getting.  

In short, even if they could ship in 2 weeks after receiving the order now, it doesnt exactly hurt to have "4-8" weeks on their website. Particularly not with the holiday weeks almost upon us.

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