Re: BFL Forced "On Hold For Refund" for all my Single SC orders

So the question is, if you had 100 5 gh/s units ready to sell for $247.00 each right now, and selling them would get you a huge chunk of the market share coming up, why would you be mining with them to generate ~$2,700 a day in Bitcoin?

500 GH/s will get your roughly 0.6% of the bitcoin network. The Bitcoin network is dominated by Avalon and ASICMiner. Their devices together could easily account for over 50% of the hash rate now that Avalon is shipping batch 2.

Also, BFL had to include twice as many chips as planned in order to get their advertised hash rate. If they are doing small batches of chips (100 or so) on an MPW prototype run, their chips are quite expensive ($50-100) and that would eat their margins (thus explaining their price hike on Jalapenos). If they are only making $50 per device, then $2700 a day looks good. Especially if they are in a cash crunch.

Personally, I don't think BFL has enough units working to make that much.

All the more reason that the implication that BFL is sitting on their hands--or a working farm of ASIC mining hardware--is absurd. They're caught up in the middle of an arms race, and if they don't ship soon, they are going to lose big. I can assure you that they know this better than anybody else. The last thing they want or need is to delay shipping to the point that people no longer need or want their product.

They are failing to hit targets, repeatedly. Nobody denies this. Understandably, people are frustrated. But being a business owner myself, I can assure you that it's always the most frustrating/stressful for the person who is under the gun to deliver.

Again, nobody is saying that BFL is perfect, or that it's not frustrating to not receive your product. Nobody's saying that BFL and their representatives haven't made mistakes, or dropped the ball in customer-relations.

The question at hand is whether it's reasonable to assume that a customer can go about actively seeking to trash a company (regardless how justified he may feel), and not expect that company to sever business relations with him. The answer is that you can't. This isn't the moral dilemma some people are making it out to be.

So much this. Anybody currently interested in making money in the developing ASIC market would also not going to be so shortsighted to think that a little bit of money mined today means anything compared to dominating the sales of ASICs right now. People are already throwing money at BFL, if they were able to ship at volume today, the amount of money being thrown at them would be absurd:

https://bitcointalk.org/index.php?topic=195052.0

This is one group buy for US/Canada for the USB ASICs. BTC895 ($110,085) worth were sold. Each one of these at 300 mh/s. At BTC2 each, and a conversion rate of $123 for a BTC we're looking at 1.22 mh/s per $.

Meanwhile, if BFL was able to ship their units today: 5000 mh/s for $275. This comes out to about 18.18 mh/s per $.

Nobody in their right mind would be buying from anywhere other than BFL if they could ship right now, and BFL would be out of their minds to -not- ship if they could.

Right now, you can make far more money mining than you can shipping product.
According to dustcoin, 500GH/s will get you $2779.88 per day. Assuming that is 100 Jalapenos, that would consist of 200 BFL chips. BFL raised the price of the Jalapeno by $100 after they realized it would have 2 chips instead of 1. They are doing small runs of chips which implies an MPW process at small production runs (a few hundred chips). If correct, then it implies a COGs of $50-100 cost per chip. That would leave roughly 50% margin on their Jalapenos which means roughly $150 of profit per device sold. They will earn that in a week or two by mining. If they "burn in" each unit for a week, they would double their margins.

That is exactly the sort of temptation I would expect that BFL could not resist. They are already way behind in the marketplace to Avalon, and ASICMiner is adding a large amount of hashrate to their operation (their retail product is not competitive). Avalon batch 2 is shipping, and the secondary market for Avalon boards+chips is due to mature by the end of summer. However, there is no indication that BFL has added any significant hash rate so I don't think they are mining to any great degree.

I was speaking hypothetically in the realm of "if BFL was able to ship right now in volume"

This would rely on the assumption of two things: that they could fill their existing orders of $125/$275 quickly, and that every new order placed could be priced at roughly 14-15x the current price - and people would pay it (following that people paid that much per mh/s on the USB miners)

It's very simple to logically believe that IF BFL could ship right now, they would, because they would have a monopoly on ASIC sales given their hash rates... and they could charge a LOT more for each unit.

The money they could make in BTC a day would be nothing compared to the $ they could be bringing in and then just converting to BTC