Topic: BitForce SC - full custom ASIC (Read 52522 times)

Thanks for asking.  I have a few simple points.

About BFL
1.  You are pre-announcing this product before delivering your previously pre-announced product
2.  This is your second claim of delivering a product with ASIC hashing.  Your first was debunked as an FPGA as soon as product shipped.
3.  You seem to be using customer funds for purchases of product for development and general expenses.  If I am wrong about that please post a notarized statement from your escrow agent and I will apologize.

About business in general
1.  Paying in advance for development is an investment.  It is generally compensated with intellectual property, equity or loan interest.
2. Honest, viable businesses become insolvent all the time for lack of cashflow.  It is the reason for the Chapter 11 bankruptcy procedures.
3. Payments in advance for products become unsecured debts in a bankruptcy proceeding.  Unsecured debtors are among the lowest priority for recovery in these procedures and generally get nothing.  Even if the material is sitting in the shipping bay with a label on it, it isn't yours under bankruptcy.
4.  For reason #3 above it is unethical, and a violation of consumer protection laws in many places to sell product in advance of availability.  For the same reason, Visa and Mastercard require shipment before a sale can be charged.
5. Companies at risk of insolvency often make very generous guarantee offers.  A guarantee has no revenue cost in the present, and has no value in bankruptcy either.

I can't see ever being a customer of yours given your business practices.  And your question has given me the opportunity to  nicely summarize why people should use caution.  So I will leave your thread to your fans and investors.

I did contact [email protected] and, having ordered a mini rig, thought I was well-qualified to be sent an NDA, which I then would have signed, in much the same way as I have already signed another NDA with another Bitcoin mining-related entity.

To my utter surprise, I just received this email (which, by the way, is not subject to an NDA, as it will become clear in just a second):

Hi Inspector 2211, <- I took the liberty to redact my real name

Thank you for your interest in our BitForce SC product. The NDA you've requested to sign is not a customer level document. It's place is for our manufacturing partners and Venture Capital participants. However, the useful period of time the NDA has covered is nearly complete as we're making our full product announcement in June. Performance specifications and shipment availability will be released at that time.

Best Regards,

Jody D.
Customer Service
BF Labs, Inc.

Cablepair, I sympathize with you.  The entire purpose of BFL's announcement is to damage their competitors.  FUD (fear, uncertainty and doubt) has been used by unscrupulous companies against competitors for decades in the tech industry.  See my post #91 for an explanation of their motivations.

Looking at it another way, imagine you have access to tech that is merely 5x more efficient than today's hardware.  Call it $0.14 / MH.  That would be $140k per TH which would capture around 450 blocks a month right now.  Earning $115k / month!  Or 1.2 months to breakeven!  Would you sell this tech to anyone?  Would you tell anyone?  Of course not.  You would put your own money in and yield 100% returns.  You would spread your systems over datacenters worldwide, and hash through a dozen different pools, and no one would realize that you are reaping 80% of the hash rate in a a year.  Then you might start selling.

I suspect BFL is paying rent, lights and salaries with mini-rig orders they still haven't shipped. BFL prove me wrong:  publish a report from a lawyer or CPA showing that they are holding payments for these systems for you in escrow.

I don't think 600$ of investment is something people would easily overlook...

If anyone receives a broken single, they would definitely send it back to us for replacement. I don't think 600$ of investment
is something people would easily overlook...



Regards,
BF Labs Inc.

Well now, excellent find Bicknellski.

Tells us again about this win win path you were on.

Case details

Court:   mowd
Docket #:   4:14-cv-00815
Case Name:   Federal Trade Commission v. BF Labs, Inc. et al
PACER case #:   117531
Date filed:   2014-09-15
Date of last filing:   2014-11-04
Assigned to:   District Judge Brian C. Wimes
Case Cause:   15:0053 Federal Trade Commission Act
Nature of Suit:   890 Other Statutory Actions
Jury Demand:   None
Jurisdiction:   U.S. Government Plaintiff


http://ia802308.us.archive.org/32/items/gov.uscourts.mowd.117531/gov.uscourts.mowd.117531.docket.html


#askftc

Our general (and strict) policy is to make sure our clients recover their investment and make proper profit in a timely manner.
I cannot explicitly disclose more data prior to our announcement, but it would be sufficient to say that whatever path we choose
must and will be a 'win-win' path (even if it translates into loss of profit for us). Any other strategy will result in loss-of-client
which is certainly not what we're after.

Regards,
BF Labs Inc.

So if I get you right you have a product that is 40 times better (MH/$) than ztex. I thought ASIC only lowered electricity consumption compared to FPGAs.

You need to disclose power consumption and noise level.

When will you show pictures of the products?

I'm actually curious to know what gpus are typically used in those sorts of gpu clusters.

I'm actually curious to know what gpus are typically used in those sorts of gpu clusters.

not to mention a bank PH is not equal a dbl sha PH...

Glad to see you can't do math.

Assuming the network is 10TH, if France adds 15TH, they won't be doing a 120% attack.  They'll be doing a 60% attack. 15/(10+15) = .6

In fact, ASIC is the only thing that can prevent 51% attack. Why? Today there are banks, financial
institutions, intelligence organizations that have super-computers, consisting of thousand and thousands
of CPUs or GPUs. These grids are used to run financial analysis, mostly Monte-Carlo.

Imagine "Societe General" in France for example. They have a GPU array of 15,000. If for financial
interests or certain other reasons, they decided to switch to BitCoin for a week. This grid alone can
give them over 15TH in processing power... this will not be 51% attack, it will be 120% attack.
This is just one bank, activating only one of its grids.

As long as the algorithm used in BitCoin can be effectively implemented in CPU or GPUs, network will always
be under threat. Scrypt won't be good either, since many institutions have grids of several thousand CPUs.

The only thing that can stop it is the ASIC. Imagine tomorrow the processing power of the BitCoin network
is 2,000TH. This is something super-computers cannot attack, simply because their combined processing
power cannot reach even 10% of it, let alone 51% attack....


Regards,
BF Labs Inc.

In fact, ASIC is the only thing that can prevent 51% attack. Why? Today there are banks, financial
institutions, intelligence organizations that have super-computers, consisting of thousand and thousands
of CPUs or GPUs. These grids are used to run financial analysis, mostly Monte-Carlo.

Imagine "Societe General" in France for example. They have a GPU array of 15,000. If for financial
interests or certain other reasons, they decided to switch to BitCoin for a week. This grid alone can
give them over 15TH in processing power... this will not be 51% attack, it will be 120% attack.
This is just one bank, activating only one of its grids.

As long as the algorithm used in BitCoin can be effectively implemented in CPU or GPUs, network will always
be under threat. Scrypt won't be good either, since many institutions have grids of several thousand CPUs.

The only thing that can stop it is the ASIC. Imagine tomorrow the processing power of the BitCoin network
is 2,000TH. This is something super-computers cannot attack, simply because their combined processing
power cannot reach even 10% of it, let alone 51% attack....


Regards,
BF Labs Inc.

My purely academic view on this not to be construed in anyway as legal advice is:

I cannot think of anything that would make this practice illegal. You are under no obligation to enter into a purchase contract with BFL. It is their product to sell and as long as they do not make a material misrepresentation then deliver the product as promised then it seem like it would be a valid contract.

The elements of a valid offer include, Duration, Subject matter, Quantity, Quality, Work to Be Done, Price and Payment terms. There is bargained for exchange, namely the promise to send you a certain number of SC units, of a certain quality and quantity within a promised time frame in exchange for your payment. It is in essence an executory contract which you have performed on already by virtue of your payment and you are waiting for BFL to perform their side. If they fail to perform, you most certainly have a cause of action.

Even if their practices were actionable, you would not have a cause of action (in civil court) as you were not harmed (unless you ordered some already).  You could perhaps be a witness in a criminal action by the state or federal government if they decided to prosecute them for some type of illegal behavior, but again, I do not see anything illegal about their ordering process. You may not like it, but unhappiness with a contract process is not valid grounds for a tort action.

The were spot on with the MiniRig.

The were spot on with the MiniRig.

Well I'm doing more research specific to the state of missouri and am awaiting a response form the better business bureau. I have also contacted an attorney who specializes in this type of law to ascertain the legality of such practices. Kickstarter projects differ from what BFL is doing as far as I can tell.

I'll know for sure shortly depending on the response rate of the state of missouri and the attorney general's office, etc.

Maybe everyone else is fine with BFL's business practices, but I smell a rat here. If I'm wrong, well no harm done and everyone can carry on with their no interest loans. If I'm right then maybe they will be forced to engage in better business practices which should benefit everyone.

I'm baffled as to how people can believe this company is "on the level" when it took a demand from the community to get a simple clarification on their announced trade in policy.

You can't tell me they didn't already know how they planned on handling trade-ins before they made the announcement.

If so, then this is yet another example of a reckless announcement designed to hamper their competition and stall orders from competing vendors.

Once again, I am NOT anti ASIC, I'm anti poor business practices and this community and all consumers deserve better.