1GH/s, 20w, $500 — Butterflylabs, is it a scam?

[btc_artist]

Are other people also participating in this demo?  Or have there been other demos?  I just found this:

http://www.chugalug.org/widget/1739/BitForce%20product%20demo
http://www.chugalug.org/widget/1740/RE:%20BitForce%20product%20demo

Any idea what that is about? What is chugalug?

Chattanooga Unix Gnu and Linux User Group?

[bulanula]

Are other people also participating in this demo?  Or have there been other demos?  I just found this:

http://www.chugalug.org/widget/1739/BitForce%20product%20demo
http://www.chugalug.org/widget/1740/RE:%20BitForce%20product%20demo

Any idea what that is about? What is chugalug?

Chattanooga Unix Gnu and Linux User Group?

LOL. This purely smells of scam from a mile away. From what I heard that place is one of the shadiest places around town.

[Inaba]

I have no outside individuals coming, but if anyone is local that wants to come along, I can probably accommodate 1 or two additional people.  BFL said they might have one or two additional people... I need to keep it small as my DC probably doesn't want a ton of people marching into one of the server rooms.

[runeks]

@P4man and DeathAndTaxes:
From what I've read in this thread it doesn't sound like they're many guys. I have the impression of there being two guys (and one QC ninja).
I can see the why they want to get some initial units out to customers before starting to build 1000 boards.

We agree that no large scale production is going to be hand-produced. But what about the pre-orders? Could they be waiting until after pre-orders to scale up production, hence the term "pre-order"? They mention funding to be a reason for pre-orders themselves, they might not be able to hand over the money required to produce 1000 boards yet. At least not until they have 1000 (or so) orders (at which point they could take a loan). Also, I know that if I wanted to produce 1000 boards, I'd want 10 or so produced first to make sure they function properly.

[DeathAndTaxes]

@P4man and DeathAndTaxes:
From what I've read in this thread it doesn't sound like they're many guys. I have the impression of there being two guys (and one QC ninja).
I can see the why they want to get some initial units out to customers before starting to build 1000 boards.

We agree that no large scale production is going to be hand-produced. But what about the pre-orders? Could they be waiting until after pre-orders to scale up production, hence the term "pre-order"? They mention funding to be a reason for pre-orders themselves, they might not be able to hand over the money required to produce 1000 boards yet. At least not until they have 1000 (or so) orders (at which point they could take a loan). Also, I know that if I wanted to produce 1000 boards, I'd want 10 or so produced first to make sure they function properly.

I don't think you understand build cost is negligible compared to processor cost.  If these are SASICS they would need to prepay a run of 1,000 units (although 10K is more likely).  If they have already paid that cost the cost to have an assembly house build 1000 (or even just 100) boards is trivial.

It would cost a lot more to try and assemble 100 boards by hand (labor isn't free).  It would be very tedious work and any mistakes would render very expensive chips worthless.   Q/A would be very tough as many defects wouldn't be detected until after they are shipped. Nobody would do that.  It just doesn't make sense given how cheap you can have some PCB assembled either in country or in China.

Lets pretend this thing is real and has a production cost of $300 per unit.  It breaks down something like this:
PCB cost: $10
Processors: $250  (although I don't believe it is possible to get 4MH per $1)
Minor components: $30
Assembly cost: <$10  (100 units might be $10, dropping to <$2 for 10K units).

So to think they have everything but need to slowly build them delaying shipping would mean you they had the $260K or so run a batch of processors plus the other $40K for PCB creation and minor components and then for some reason they are missing the final $1000 it would cost to get the first 100 boards assembled properly by an automated assembly house.  Does that make sense?  If it were you wouldn't you simply put that on a credit card instead of spending hundreds of hours trying to hand assemble something which really should only be done via automation?

[joeyjoe]

yes its fake, the 2nd image is actually of a Raid enclosure.

[btc_artist]

yes its fake, the 2nd image is actually of a Raid enclosure.

Link to image?

[runeks]

@DeathAndTaxes: you seem to be making more assumptions than I am willing to go along with. Your logic is probably sound if all your assumptions are true. But what if they aren't?

I don't think they're assembling the boards by hand, I think they're having them produced for them by some Asian company. I think you mentioned yourself in this thread - or it might have been someone else - that this is quite doable. Are you saying that if I want to have 1000 boards produced by some Taiwanese company that I can't have 10 boards to begin with, to see what the standard is like?

In any case; they claim to have only a small number of test units, plus a number of pre-orders "in manufacture". So it certainly seems like they sticking to the story of first producing the pre-orders, then the rest:

Code:

Matt, 

I'm interested in helping out.  I think it would be some time before we have
an extra unit.  Our current test units are well occupied and our pre-order
units in manufacture are accounted for.  Please keep in contact with me and
when we get past the release phase, I believe I can accodate a loaner for
the purposes you describe.

Yes, the drivers are open source.  Processing functions outside of sha256
are not supported.  

Regards,
Sonny K
BF Labs Inc.

(1)

@btc_artist: I think he's referring to this picture of the "Rig Box". It's been discussed to death in this thread already: it's an OEM design, any company can put anything that they want inside it.

[joeyjoe]

yes its fake, the 2nd image is actually of a Raid enclosure.

Link to image?

http://www.oemexport.com/free_shipping.html?display=3
scroll down

and also

http://www.span.com/product_info.php?products_id=27289

[Inaba]

yes its fake, the 2nd image is actually of a Raid enclosure.

Link to image?

http://www.oemexport.com/free_shipping.html?display=3
scroll down

and also

http://www.span.com/product_info.php?products_id=27289

So they are using an OEM box to house this instead of fabbing their own and THAT is what makes it fake? 

Seriously?  That's your position?

[bulanula]

yes its fake, the 2nd image is actually of a Raid enclosure.

Link to image?

http://www.oemexport.com/free_shipping.html?display=3
scroll down

and also

http://www.span.com/product_info.php?products_id=27289

So they are using an OEM box to house this instead of fabbing their own and THAT is what makes it fake? 

Seriously?  That's your position?

1 hour and 40 minutes to go. 100 minutes folks. I am prepared and ready for my socks to be blown off by this magical device. It's like the second coming of Jesus a month before ! Oh, the excitement.

[sadpandatech]

  Inaba, are you going to have the tech available with you to report 'live' on your findings?

[P4man]

I don't think they're assembling the boards by hand, I think they're having them produced for them by some Asian company. I think you mentioned yourself in this thread - or it might have been someone else - that this is quite doable. Are you saying that if I want to have 1000 boards produced by some Taiwanese company that I can't have 10 boards to begin with, to see what the standard is like?

Obviously. But I dont think assembly is the issue here. Contrary to D&T, Im convinced no matter if you have to order 1000+ or 10k s-asics that you will first receive a single wafer, or at most a single wafer run (usually 4 wafers) for testing, characterization, to validate your PCB etc. The biggest cost is the mask set; once you have that, you'd pretty much pay standard wafer price, but that still isnt cheap for 100+ wafers, so it doesnt make sense to bake 100s of wafers before being able to test and validate your first chip. Particularly since you wouldnt be ready to sell your product; thats not specific to BFL, anyone would have to test and debug their prototypes first. Its not good business to sit on 1000 processed wafers for all that time.

In short; my guess is BFL have ~100 chips now from a test run, possibly they are assembling them on boards themselves, and it will take at least 8 or so weeks from the green light before they receive the first of the volume production wafers (then there is wafer and/or chip testing, cutting, packaging, mounting etc) which they would probably have someone assemble on the PCBs elsewhere.

As for financing; Im sure they have had to pay Altera (or whomever) a considerable amount already, but you usually dont pay 100% up front either. It probably boils down to them having paid for the mask set and the test wafers, but not the volume production yet. Either way, they will have bills to pay and its good to be able to show investors initial revenue sooner rather than later.

[DeathAndTaxes]

Contrary to D&T, Im convinced no matter if you have to order 1000+ or 10k s-asics that you will receive a single wafer, or at most a single wafer run (usually 4 wafers) for testing. The biggest cost is the mask set; once you have that, you'd pretty much pay standard wafer price, but that still isnt cheap for 100+ wafers, so it doesnt make sense to bake 100s of wafers before being able to test and validate your first chip.

I don't know where you got the idea I claimed they wouldn't get a test run of any product they buy.  No need to put words in my mouth.  A single wafer run is possible but the costs are much higher meaning those chips are really designed for testing. Still the cost per chips of the first batch is immaterial to the discussion so I am not sure why you brought it up.

In short; my guess is BFL have ~100 chips now from a test run, possibly they are assembling them on boards themselves, and it will take at least 8 or so weeks from the green light before they receive the first of the volume production wafers (then there is wafer and/or chip testing, cutting, packaging, mounting etc) which they would probably have someone assemble on the PCBs elsewhere.

All the chip work would be done by Altera in fab.  Assembly of PCB is trivial.  Why would someone do the tedious, expensive, and error prone work of hand assembly when you could drop it to an assembly house and get it assembled, xrayed, tested, and shipped in 2-4 weeks at lower cost and less time than you could with hand assembly?  Board #1 and Board #100 would be done at roughly the same time and shipped together.

[P4man]

I don't know where you got the idea I claimed they wouldn't get a test run of any product they buy.  No need to put words in my mouth.  A single wafer run is possible but the costs are much higher meaning those chips are really designed for testing. Still the cost per chips of the first batch is immaterial to the discussion so I am not sure why you brought it up.

Remember the question is why sell 100 bitforce units in "pre-sales" and have relatively long waiting period for them. Earlier you said something along the lines of "either they have 1000 chips or they have none" (sorry if I misquote, going by memory). This is one reason why you might expect to see that. They simply dont have 1000 chips yet, and may not have them for some time.

All the chip work would be done by Altera in fab. 

I guess that might be true. More used to getting processed, uncut and untested wafers from the fab, but with hardcopy you might actually get tested and packaged chips. Of course that changes little about lead time, no matter who does the work, it has to be done and you cant process a wafer in a week. So assuming BFL is just done testing their prototypes and happy with the results today, the next delivery of chips is not likely to happen before February.

Assembly of PCB is trivial.  Why would someone do the tedious, expensive, and error prone work of hand assembly when you could drop it to an assembly house and get it assembled, xrayed, tested, and shipped in 2-4 weeks at lower cost and less time than you could with hand assembly?  Board #1 and Board #100 would be done at roughly the same time and shipped together.

Well, youd typically not want to build even 100 units before being able to test the first. So the first boards are likely "handwork" anyway. Also, AFAIK BFL have yet to announce they sold out their presales, for all I know they only have orders for two dozen. Dont have experience here, but I doubt its worth outsourcing that kind of volume.

Anyway, I have no idea who is doing what, Im just trying to show there are perfectly logical explanations for what we are seeing.

[Turbor]

Im just trying to show there are perfectly logical explanations for what we are seeing.

I really hope that there is something to see...

[Inaba]

No, I won't have the tech to do any sort of streaming.  I am going to disassemble the unit and take some pictures then we will either test it out tonight or tomorrow depending on schedules.

After the test, I'll do a write up of the test procedure and results.

[plastic.elastic]

I'm loving this thread, this will put and end to bitcoin. I mean scams after scams, bitcoin does show all how good we truly are as human species.

[bulanula]

I'm loving this thread, this will put and end to bitcoin. I mean scams after scams, bitcoin does show all how good we truly are as human species.

TBH the main uses of BTC for now are  Silk Road and scamming. For all I care, we could rename this forum "Scammers R us" with the amount of scammers on here. Too bad there is no live video feed or something. I am thinking they gave Inaba $5k or $10k to turn to the dark side and we get fed a ton of BS and people rush in to buy etc. this fantastic new magical unicorn technology. Maybe I am just paranoid but these scams on here are not normal scammer level; they are UBER level and they are doing it very in depth and planning etc. mybitcoin, bitcoin7 etc.

[sadpandatech]

I'm loving this thread, this will put and end to bitcoin. I mean scams after scams, bitcoin does show all how good we truly are as human species.

  it will also show our abilities to adapt, persevere and capabiltiy to 'dream' without being naive. ;p