Topic: 1GH/s, 20w, $500 — Butterflylabs, is it a scam? - page 26. (Read 123109 times)

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.

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.

I am so relieved.

But that makes the bet interesting...

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.

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

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.

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?

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.

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.

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.  


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.

Fair enough, we will see soon.

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.

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

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.


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".

Provided proof that this tech works, how may rig boxes are you going to buy?

Pre-orders start TONIGHT!

I seriously doubt that the rig box or "supercomputer" on the BFL web site is primarily for bitcoin.  Just my hunch, but these seem geared to military/intel customers.

On the contrary, the price (and performance) strongly suggests they do have something "special". Either they had some brilliant idea to make off the shelve FPGAs vastly more efficient, in which case, someone else is going to be able to do that too,  or they have a custom chip. Custom chip means very low per unit cost compared to FPGAs, but a fairly high fixed cost. That means you want to sell truckloads. In either scenario you want to sell as many as can as soon as you can, and not wait 12 months hoping to still be king of the hill so you can just break even.


Their website suggests there are other applications for their product. Code breaking would be one obvious candidate, but they mention medical imaging, finger print processing and I read somewhere monte carlo simulations too. If true, that suggests their chip is more general purpose than SHA hashing alone, but we will shall see how that pans out.


Its actually 9 months at that cost, only to break even on per unit cost, ignoring R&D, overhead etc costs, the need for a large and secure datacenter, electricity etc etc.

But thats not even the real comparison, its how long it takes (and at what risk) to be more profitable than selling. Even assuming your BOM estimate, and the $599 list price, its still > 12 months before they would make more money mining than by selling the hardware. And at a huge risk. It could easily be 24 months or never.  No sane investor would accept that risk when there is such an easy and almost risk free way to get a nice positive ROI way sooner.

Moreover, there is no reason to assume development will stop after the single board and that will be the best and only ever product in the market for 12 months. Even if BFL themselves have no plans for something better in 12 months, there are other companies claiming to work on full custom asics to be launched in 2012. If thats true, BFL had better made back its investment with a nice profit before that hits the market, as it would crush the single board and make it unsellable for btc mining.

This is the risk you want to offload to miners that invest in these devices. Its the reason I am not going to buy a BFL single board even if they achieve all their promises. IN 6 months its entirely possible it will prove a cost I can never recover. And at best in 12 months Im only just breaking even.  If Im not willing to risk $600 on that, its hard to see how a company and its investors would be willing to gamble their existence on it.

Im comparing revenue. Even if they cost BFL $0 to produce, it still takes a year at current price/diff to earn them as much mining as selling a unit would earn them.


Interesting. Please send that guy a Core i7 and let him mass produce it for me

Hint: the cost is not in the PCB or assembling. Thats maybe $10-$20 each. Assuming those are s-asics, the cost is the NRE they have to pay Altera for the masksets, IP etc. "A guy" in China cant do that. If they are regular FPGAs, or some other off the shelve chip, obviously the cost is in acquiring those.

Do the math.  Even with their specs, at the stated price it takes about a year to break even at current difficulty and BTC price. Thats a huge cashflow issue for a startup and risking the survival of your company on mining profitability and BTC price is a gigantic risk. Then there is the risk of someone else coming out with a better product, like custom asic, within the year, rendering your expensive mining farm almost worthless.

Compared to being able to sell those devices with perhaps 50% gross margin (just a guess if they are using s-asic) its a no brainer.

This. About time too. I hope the debate will now shift to the more interesting questions:
- how are they achieving this performance? Structured Asic a la Fast Path is my guess but I wonder if anyone sees any alternatives. Maybe we should open a betting pool for this :p.
- how long until GPU mining is dead? Even for those with "free" electricity it almost makes more sense to buy this BFL product instead of GPUs. Assuming BFL is doing a first production batch of 1000 units that they can assemble and ship over the next few months,  thats already 10% of the network. And thats ignoring the "rig box". Just 100 of those would equal nearly 50% of the bitcoin network. I guess I have a few months to get rid of my GPUs