imagine it like a printing press. it takes hundreds of thousands of dollars and lots of time to build and lay out the press, but the pages it prints - the chips - are cheap and quickly produced from the expensive machine. what happened was they spent the huge amount of investment money that it takes to begin fabricating chips only to discover after receiving the first batch that they run too hot. so hot, in fact, that they basically melt the surrounding materials on the board.
i'm not making this up. there was a wired article posted with an interview of josh from bfl.
Topic: Why Butterfly Labs (BFL) might be a Ponzi scheme - page 2. (Read 6846 times)
Hello fellow miners,
According to my limited info on ASIC building, it can cost at least 250k $ to make one of these units but they are selling them at 274$!
Now FPGA mining made a lot more sense - sensibly priced hardware, mass produced, programmable for custom purpose - power consumption - not so great.
My point simple: given how much it costs to build ASIC chips(no matter how brilliantly efficient they might be) they probably only gathered enough funds to manufacture a portion of the ones ordered.
So they will ship a couple of units every week to appease the masses. In the mean time, people will continue pre-ordering(all sales final!); they will keep up this rhythm until they hit their profit target or they get bored or the supply drops - at that point, after having smartly moved their profits to offshore accounts along the way they can file from bankrupcy and skip town, not delivering one more single unit.
Call me paranoid, but this scheme makes sense and I see no reason why they could build ASICs for only 274$ - unless they have their own factory??
According to my limited info on ASIC building, it can cost at least 250k $ to make one of these units but they are selling them at 274$!
Now FPGA mining made a lot more sense - sensibly priced hardware, mass produced, programmable for custom purpose - power consumption - not so great.
My point simple: given how much it costs to build ASIC chips(no matter how brilliantly efficient they might be) they probably only gathered enough funds to manufacture a portion of the ones ordered.
So they will ship a couple of units every week to appease the masses. In the mean time, people will continue pre-ordering(all sales final!); they will keep up this rhythm until they hit their profit target or they get bored or the supply drops - at that point, after having smartly moved their profits to offshore accounts along the way they can file from bankrupcy and skip town, not delivering one more single unit.
Call me paranoid, but this scheme makes sense and I see no reason why they could build ASICs for only 274$ - unless they have their own factory??
I think you're mixing up developing and producing.
I'm not saying BFL is definitely not a ponzi but I think it's certainly possible to build the mining rigs that cheap on a large scale.
As far as I know the greatest expense by far when dealing with ASICs is the design process. (Amounts in the order of $1M were mentioned.) Once that is done the mass produced chips can be cheap as, well, chips
As far as I know the greatest expense by far when dealing with ASICs is the design process. (Amounts in the order of $1M were mentioned.) Once that is done the mass produced chips can be cheap as, well, chips
i think the consensus is that you are giving bfl too much credit by saying they managed to conjure up a ponzi scheme...
incompetent yes, but not a ponzi scheme.
incompetent yes, but not a ponzi scheme.
Hello fellow miners,
According to my limited info on ASIC building, it can cost at least 250k $ to make one of these units but they are selling them at 274$!
Now FPGA mining made a lot more sense - sensibly priced hardware, mass produced, programmable for custom purpose - power consumption - not so great.
My point simple: given how much it costs to build ASIC chips(no matter how brilliantly efficient they might be) they probably only gathered enough funds to manufacture a portion of the ones ordered.
So they will ship a couple of units every week to appease the masses. In the mean time, people will continue pre-ordering(all sales final!); they will keep up this rhythm until they hit their profit target or they get bored or the supply drops - at that point, after having smartly moved their profits to offshore accounts along the way they can file from bankrupcy and skip town, not delivering one more single unit.
Call me paranoid, but this scheme makes sense and I see no reason why they could build ASICs for only 274$ - unless they have their own factory??
According to my limited info on ASIC building, it can cost at least 250k $ to make one of these units but they are selling them at 274$!
Now FPGA mining made a lot more sense - sensibly priced hardware, mass produced, programmable for custom purpose - power consumption - not so great.
My point simple: given how much it costs to build ASIC chips(no matter how brilliantly efficient they might be) they probably only gathered enough funds to manufacture a portion of the ones ordered.
So they will ship a couple of units every week to appease the masses. In the mean time, people will continue pre-ordering(all sales final!); they will keep up this rhythm until they hit their profit target or they get bored or the supply drops - at that point, after having smartly moved their profits to offshore accounts along the way they can file from bankrupcy and skip town, not delivering one more single unit.
Call me paranoid, but this scheme makes sense and I see no reason why they could build ASICs for only 274$ - unless they have their own factory??
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