There is a huge difference between a deposit and 100% payment.  When I bid on my house I put 1% of the purchase price into escrow as good faith money.  

Regarding cars, this is an excellent example.  A dealer is charged the full price of a car he ordered the exact moment it rolls of the assembly line.  Not a minute before that.  If you want to purchase a custom configured car, you will need to pay a deposit with the dealer, but certainly not the full price.  I considered buying a Tesla a couple years ago and they were asking for less than 10% as a deposit at that time.

Car dealers are required to post a financial bond to help reimburse any customer deposits in case of insolvency.

This a very well thought-out post.  Regardless of whether you are a fan of BFL or not, these points are worth thinking about. 

Entropy - I get charged on my credit card all the time before a shipment is made.  The company I work for does the same.  I have never heard of it violating any sort of consumer protection laws.

Ok, I'll bite.

At 100 GH/s with negligible electricity usage, I would stand to make nearly $10,000/month at current price/difficulty ratios.

Most reasonable people would expect a ROI of equal to or greater than the stock market (in this case, greater, since Bitcoin investments are still generally very risky).  I personally would like to see payback within 6 months, but would probably accept a payback of up to 1 year.

So, if the price is $60k, payback in 6 months, I would order.  If it is $70k=$120k, payback in 7 months, I might not.  If it is $120k+, I definitely would not.

Now, say I have the knowledge (or an educated guess) that you might drop the price from $60k to $10.  Ok, fine.  My payback period just got increased from 6 months to 3,000 years.  Whoops, should have seen that one coming.  It'll pay back, but not in my lifetime!

Ok, so the most I am willing to risk is a 6 month payback at current rates, but with the expectation that the price could drop to as low as $10, and a maximum of 3 years payback if it does.  If the price drops to $10 for 100 GH/s, I could expect 1.3 million of these boxes to be purchased, eventually, at the current price point of ~$5/BTC.  With 1.3 million, we'd have 131M GH/s, or 131.4 PH/s of network power.  The payback on these boxes would be 6 months at that price/difficulty ratio, so they'd be generating around $1.60/month worth of BTC.

Still, those 1.31 million boxes wouldn't be produced and sold in a day.  It would take months, perhaps years to get that many produced, packaged, sold, and shipped out.  I would be expecting this, and would maybe expect difficulty to double every 2 weeks at the most.  So, the first 2 weeks, I would make $5,000, the second two weeks, $2,500, third two weeks, $1,250, etc.  Basically, my revenue would virtually max out at just below $10,000 by the time my goal ROI of 6 months is up.  I'd still be making the $1.60/month extra, but that amount would be negligible compared to my initial investment.

Of course, I want to have some extra money for my time and effort after it's all said and done.  So, if I am expecting $10,000 in revenue, the maximum I would be willing to pay might be around $7,500.

Your turn.

Like I said, i dont see a solution that wouldnt hurt BFL. They could make a promise to not sell more than x GH per y months, or some other form of guarantee thats linked to difficulty and that would allow miners to have some certainty of their ROI. But then what happens when a competitor appears, who is not bound to those limitations?

Another possible solution is not selling the hardware but leasing it at a variable price, ideally linked to difficulty; I guess that would need some DRM solution, not entirely unlike largecoin. But then BFL is essentially taking all the risks and just giving a part of the mining reward away, and BFL might as well mine themselves.


Which would also hurt BFLs potential profitability, probably a lot, and only delay the problem. It would be good for early adopters, but at some point even that low $/GH will begin to become too high as difficulty rises, and BFL will have to drop prices or lose sales.


If they have a full wafer maskset, there is no capacity limit. None. They could literally make millions of these chips. And it could cost them less than what only a few wafers would be worth at todays price/GH.


Agreed.

Excellent, your order will be shipped in 4-6 weeks. Your order number is #101.  
Yes we already sold 100 units this month (80 to gigavps who will receive them tomorrow). We will auction off 100 more units on ebay every month, these chips cost $10 to produce, so why not.

Care to redo your math?

ngzhang did the reverse engineering that showed the single has an FPGA.  The thread is the source of my understanding that BFL claimed to be using an ASIC.

Visa operating rules are linked below.  Your experience is common.  I have on more than one occasion successfully collected a refund from a reluctant merchant by citing their failure to ship as a violation of Visa rules.  Charging the same day you ship is a far different matter, and overlooked by the card companies.
http://usa.visa.com/merchants/operations/op_regulations.html

I'm not interested in researching case law for you.  It varies by state and I have lived in some jurisdictions where the law was as I stated.  If I had a dog in this fight I would hire a consumer rights lawyer in the capital city of BFL's state to investigate and possibly file a complaint.  If you really want to know, google or make some phone calls.

Well,CPU's were used to mine first,then came GPU's.I'm sure there were some people who said this was a bad thing.

Then FPGA's started doing the same thing,making GPU's obsolete.Of course it would take quite awhile before they are not worth using,i.e. diff going up becuase of FPGA's.

Now ASIC's are really going put a hurt to those using GPU's,which are what the majority of miners are using.

I think this is where the arguments are coming from,with all the investments in GPU farms going to be worthless before years end.Thats alot of money & time invested going to waste.

It's a shame,but it's called progress................I believe the diff will go up,but as GPU farms start shutting down the diff will level off,where? I have no idea.......

Thank god, someone who understands!
Well, the ones that dont and go for broke buying those asics at whatever price BFL decides upon, I guess will understand too - eventually.

All of this is true and it's totally pissing me off due to making Bitcoin mining that much more risky.