How do crummy companies like BFL and Hashfast manage to stay in business?

[kendog77]

Eventually, you would think that their poor performance and poor reputation would catch up to them and put them out of business.

I suspect they get most of their sales from Bitcoin noobs that don't bother to do much research before buying.

I don't see why anyone would buy from BFL at this point given their extremely poor performance over the past two years, yet people continue to buy Monarchs and overpriced hosting plans with undefined delivery dates. I guess some folks never learn and are glutton for punishment.

I feel sorry for early Hashfast customers because it wasn't clear that they were a crappy company at the beginning, and they lied through their teeth about their refund policy and miner protection plan, but it should be pretty clear now that they are a dishonest company.

I guess Bitcoin makes some people so blinded by greed that they act irrationally.

[1715611485]

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[3DX4D]

Supply and demand, it's pretty simple actually.  Until those two conditions equal out a little more you really only have a couple of choices when it comes to mining.  You can ride the bull and hope like hell you don't get hurt or sit in the stands and watch the excitement.

[repairguy]

Supply and demand, it's pretty simple actually.  Until those two conditions equal out a little more you really only have a couple of choices when it comes to mining.  You can ride the bull and hope like hell you don't get hurt or sit in the stands and watch the excitement.

Well said.

[k9quaint]

Supply and demand, it's pretty simple actually.  Until those two conditions equal out a little more you really only have a couple of choices when it comes to mining.  You can ride the bull and hope like hell you don't get hurt or sit in the stands and watch the excitement.

Dumb people will always fall for the "too good to be true" scam if it is sold well. The left side of the IQ curve will be there no matter how much the supply and demand even out.

[miter_myles]

[-ck]

People obsessed with the possibility that the preorder that's available might put them ahead of the diff curve and be first with the hardware to stay ahead, combined with lots of newcomers who don't understand diff rises and its effect on profits losses from mining. Usually cognitive bias is how people explain their losses away and they move on and possibly even do it again (wiki: post purchase rationalization). It's a market that seems to have no bottom to it, and we'll keep seeing it for some time to come.

[Zelek Uther]

Pre-orders: just say no.

[SirWizz]

Pre-orders: just say no.

Disagree. If we all did this products like the KnC Jupiter would not exist today because no one would fully fund such a risky endeavor. I think the correct way to look at this is - make informed buying decisions. There is a reason some people stayed away from HF/BFL and the lot.

More to the point though the reason why BFL and HF are still in business is because they can afford to - they have raised enough money to stay in business for a while longer... at least until they can pretend they fulfilled their contractual obligations so that they don't end up rotting in some jail.

I doubt that anyone who is sane, capable of reading and doing some basic research would buy from these guys again... but then again we've had people here that chose to buy the Monarch so maybe there are some people that just don't get it. That's good news though for sellers! 

[FarSky7]

Last summer, it was a coin toss, and I chose KNC.

Bitcoinorama, by investigating and attaching his name to it, lent much weight to my decision.

That KNC was associated with ORSOC, a legit asic company, lent alot of credence.

Luck was involved, surely, but so was due diligence.

Why is BFL in biz still?

BFL was the first, and has brand recognition. They've straddled the line between legal and illegal,

as their predecessors did when they sold "grey" market asic devices for re-programming DTV/DISH smart cards

in the early 2000's. Word has been getting out that they are less than scrupulous, their devices last-gen.

Perhaps the reason they still exist is because they took care to satisfy VIP customers and let the little guy suffer.

They are on the eventual road to implosion. BFL does not care, they already made their score, the rest is gravy.

[Entropy-uc]

People obsessed with the possibility that the preorder that's available might put them ahead of the diff curve and be first with the hardware to stay ahead, combined with lots of newcomers who don't understand diff rises and its effect on profits losses from mining. Usually cognitive bias is how people explain their losses away and they move on and possibly even do it again (wiki: post purchase rationalization). It's a market that seems to have no bottom to it, and we'll keep seeing it for some time to come.

The whole question is similar to asking in 1998 why people use AOL.  The service was terrible, there were far better alternatives and no advantages beyond name recognition.  Anyone who used them quickly learned they sucked and moved on to better options.  They survived on massive waves of newbies, so many that they had no need to retain customers.  Mining hardware has been exactly the same.

I personally think the MtGox press will shut down the flow of clueless newbs thinking they can get rich quick and choke off the pre-order money.

If it happens, some companies are going to go bankrupt, because they rely on pre-order cash for operating capital.  This makes it doubly important to stop paying 100% upfront for gear because the next wave of pre-orders aren't going to be late, they will never come at all.

EDIT: On top of it all, I would be extra cautious about the solvency of the hardware sellers right now because some of them may have lost a fortune in the collapse of MtGox.  750000 BTC is a lot of deep pocketed people feeling very stupid right now.

[minternj]

Gox lasted for a little bit and then.. 

[Starlightbreaker]

the overabundance of idiots.                                                                                                                                                                                                                         

[Unacceptable]

80% of the public is dumber than a box of rocks    & growing by the day  

I'm just barely in the 20% 

[-ck]

80% of the public is dumber than a box of rocks    & growing by the day  

I'm just barely in the 20% 

Almost 50% of the population is below average intelligence.

[kano]

...
I suspect they get most of their sales from Bitcoin noobs that don't bother to do much research before buying.
...

Well, considering MOST asic hardware bought in the last 12 months made less BTC than it cost to buy, it's pretty much everyone.

Targeting 'noobs' with that comment is clearly showing even you don't know what's going on

[repairguy]

Pre-orders: just say no.

Disagree. If we all did this products like the KnC Jupiter would not exist today because no one would fully fund such a risky endeavor. I think the correct way to look at this is - make informed buying decisions. There is a reason some people stayed away from HF/BFL and the lot.

More to the point though the reason why BFL and HF are still in business is because they can afford to - they have raised enough money to stay in business for a while longer... at least until they can pretend they fulfilled their contractual obligations so that they don't end up rotting in some jail.

I doubt that anyone who is sane, capable of reading and doing some basic research would buy from these guys again... but then again we've had people here that chose to buy the Monarch so maybe there are some people that just don't get it. That's good news though for sellers! 

I agree that preorders aren't the best for the consumer, and would advise against them,  Hypothetically if none of the asic companies would have been able to get off the ground due to lack of funding (which I sincerely doubt.. see: bitmain and asicminer) why would that have been a bad thing?  It isn't like the bitcoin network needed the asics.  In my opinion the asics made bitcoin mining less attractive. People paying even more per gigahash for a product that doesn't even exist, and by the time they receive it (if at all) will be nearly obsolete.  Is it hard to see that the only people making money from mining are the hardware people, not the miners.

[RoadStress]

...
I suspect they get most of their sales from Bitcoin noobs that don't bother to do much research before buying.
...

Well, considering MOST asic hardware bought in the last 12 months made less BTC than it cost to buy, it's pretty much everyone.

Targeting 'noobs' with that comment is clearly showing even you don't know what's going on

You must consider that because of the big exchange rate leap we will never know how difficulty would have been at 120$/BTC.

[Gator-hex]

80% of the public is dumber than a box of rocks    & growing by the day  

I'm just barely in the 20%  

Almost 50% of the population is below average intelligence.

LOL, I got that joke.

The answer to the OP is mining and advertising. BFL ran a mining farm, of course these days it's called customer hosting, and they advertise heavily which ensure a constant stream of new investomers.

Cleared out their old 65nm rack mounted miners January 2014 to make room for the new ones?  

"Units begin shipping December 30, 2013"

https://products.butterflylabs.com/250-gh-s-rack-mount-bitcoin-miner.html

I hope BFL survive only because BitSafe is a much needed product. I do not trust my phone, Google lifted all my contacts, even the photos, it leaks data like a bitch!

[k9quaint]

80% of the public is dumber than a box of rocks    & growing by the day  

I'm just barely in the 20% 

Almost 50% of the population is below average intelligence.

Technically, they are below the mean. But since half the people you tell the joke to don't know what the mean is...
 

[Entropy-uc]

80% of the public is dumber than a box of rocks    & growing by the day  

I'm just barely in the 20% 

Almost 50% of the population is below average intelligence.

Technically, they are below the mean. But since half the people you tell the joke to don't know what the mean is...
 

If you think about it you actually intended to say median, not mean.

Either that, or you're one of those that don't get it.

[daddyfatsax]

80% of the public is dumber than a box of rocks    & growing by the day 

I'm just barely in the 20% 

Almost 50% of the population is below average intelligence.

Technically, they are below the mean. But since half the people you tell the joke to don't know what the mean is...
 

If you think about it you actually intended to say median, not mean.

Either that, or you're one of those that don't get it.

Makes me think of the George Carlin quote: “Think of how stupid the average person is, and realize half of them are stupider than that.”