Picture you're a clever scammer. You have a choice, you could select to scam for 1 mill USD, or pull off a larger scam and secure 5 mill USD.

So, you could promise FPGAs, secure 1 mill in upfront funding, and run, or you could do the same, but first deliver the FPGAs, then secure another 6 mill USD for Asics, then fail to deliver..


People can change, for sure, personally I would never hire a person convicted of financial fraud for a financial position, and if a company hires a person convicted for financial fraud, as the manager and having access to the company assets, that doesn't run well with the public.


This being said, I haven't looked into the allegations, and can't vote for their accuracy. There's competitors to BFL as well, so if anyone wants to tarnish their image, we don't know.

(don't take what I say at face value - just some thoughts)

if i would try to scam somebody i would take the money and run as fast as i can.
at the beginning nobody knew who bfl ist. now there are names and details... i think its just to late for them to run away.

but: i am only good at getting scammed, not at detecting scams. so: who knows...

Nooooo, the trouble was collecting money to buy lottery ticket, that were never bought.



This is like Bruce Wagner all over again.

  "We don't know if he really is a fraudster."
  "Here's the court documents sentencing him to prison for fraud."
  "Yeah, maybe, but we don't know if he really is a fraudster."

Don't get me wrong, I never trusted BFL or sent them any money. But just to play devil's advocate, if they were running a pure scam, why send any money back to the victims at all? Isn't this basically how state lotteries work? They collect money from loads of victims and, after taxes and administration costs, the victims receive far less than they paid in. Isn't it well known that a lottery ticket is never a fair bet?

According to the police reports posted here, they offered to buy lottery tickets in a "group", and then split eventual earnings. But that was never done, they just sent back part of the money, and kept most of it.

This reminds me of that Woody Allen movie where they open a cookie shop next to a bank to set up cover while they tried to tunnel into the vault. Meanwhile the cookie shop takes off as a successful business and they are stuck in a quandary as to whether they should rob the bank or not...

I think it's borderline ridiculous to think a scam would first start with the heavy engineering required to develop FPGA's just as a trick to hook us for a larger ASIC run. If you think they started out with the intention to scam, well then I think they've realized they've stumbled onto a "more profitable if legitimate" business. Developing FPGA's is not trivial, nor is the amount of engineering that has gone into BFL's already developed products. Not only that, BFL also has competitors- some of whom also are offering pre-orders for ASIC's by the end of the year. A competitor could have at any point scooped BFL by announcing their ASIC's first or developing them earlier.

Besides, by your logic if we actually run away with the idea that this is a really elaborate con- why wouldn't they just use ASIC's as a setup for a even BIGGER scam, like ASICS v.2, or use ASIC v.2 for the even bigger scam ASIC v.3? Certainly after multiple iterations of putting out confirmed, verified, working, high-quality equipment the amount of trust the community would have in them would be through the roof. Just imaging the pre-order volume for ASIC v.5!

To be honest- at this point BFL is a functioning company with R&D costs like any other. If this new revelation explains anything, I think it more  likely explains why they needed to offer pre-orders: with a history of Mail Fraud it might be impossible for BFL to get outside venture capital, or even borrow money from the bank, thus the community pre-order's bankroll the next iteration of equipment.

To say that you have to assume that they are capable of running their business in the long term (= they actually have designed the ASICs).
Has any proof of that been given?

People keep saying running with the pre-order money is the big jackpot scam for multiple millions.  First of all, the pre-orders total about 1.1-1.9 million approximately.  Secondly, BFL could hold the pre-orders for 1 month and mine with all the card (okay that'd take A LOT of computers but stick with me ) and make a bare minimum of $1,392,261.94 and that's adjusted for the difficulty increase it would cause (about 2x) but not the exchange price drop off of selling that many BTC.  That's where the real money could be made.  Oh and BTW that route isn't illegal.  Running away with preorder money is.  Thus the basis for my other post about how they're definitely mining with them or will be.

And since someone will ask, 7000 pre-orders, 100% jalapenos assumed (obviously not true), 3,500 MH/s * 7000 = 24,500 GH/s. Deepbit says that's 7743.5 BC per day (DROOL!). That MH/s = approx difficulty increase of 2x since the whole system is 22,000 GH/s atm so 3871.75 BTC/day would be expected * 30.5 days (because 30.5 * 12 months is 366 days, 1 off from 365 so it's commonly a 1 month interval amount used in statistics) = 118088.375 BTC in the month.  The last price I remember on MTGox was $11.79 so $1,392,261.94.  7000 Jalapenos will net them $1,043,000.  Mining for 1 month with all of them would profit them $1.39 mil not counting electricity and computer purchases and hubs and networking equipment.

Or, since they have 22 pre-orders for those top level rigs that do 1000 GH/s, they could just run all 22 and get approximately $1.2 million lol.  That's easier than 7000 Jalapenos

Inaba stated that that preorders were not used to fund development and that outside investments (VC, etc) were taken.

I found the answer to my question and something more: https://bt.irlbtc.com/view/48863.msg588169#msg588169 (locked)