Digging for answers: The “strong smell” of fraud from one Bitcoin miner maker

http://arstechnica.com/tech-policy/2014/04/digging-for-answers-the-strong-smell-of-fraud-from-one-bitcoin-miner-maker/

by pr0zac • 12 years ago

40 23 12 years ago

bigdubs3• 12 years ago

Isn't the object of business generally to do as much nefarious stuff as you can get away with?

With bitcoin I think the 'moral' bar is a bit lower because this is new territory.

note: I do not believe this (that business moral judgements are just what they can get away with), but it seems to be a commonly held belief.

note #2: to people the downvoted this, if it wasn't a thought provoking or at least intelligent comment please elaborate why.

bmelton2• 12 years ago

As someone who downvoted you, and then saw the request for explanation, here's mine:

I downvoted you because rhetoric, however commonly held, isn't worth the discussion space, in my opinion.

Further, I disagree with the implication that all capitalist endeavors would just be highway robbers, if not for those pesky laws. Even those who suggest that Wal-Mart is definitively evil for paying minimum wage doesn't tend to hold the belief that all economic exchange is similarly evil, nor are all companies nefariously motivated.

Yes, successful business owners like to maximize value, but for every person trying to sneak in a hidden surcharge, or lobby Congress for favors, there's another person who runs the minimum amount of ads on his website because he doesn't want it to feel dirty, or who is contributing to open source, because he likes giving back.

bigdubs3• 12 years ago

Thanks for answering.

I think this notion is specifically relevant to BFL.

The point is that in the absence of a Kohlberg "Conventional" and beyond sense of morality what we are left with is what companies (actors, individuals) can do, and what they can't do.

I don't think that companies are inherently bad, it's just that companies will do what they can to maximize profit.

It's as simple as that. As long as we let companies like BFL operate without punishment, they will test the limits of what they can do.

Does it make it right? Of course not.

darkarmani• 12 years ago

How poorly run do you have to be to not make money simply selling the hardware and harvesting bitcoins during the burn in period? It's no different than using the float in other ways. Do it in a way that customers are still happy and everyone wins.

jerf3• 12 years ago

Before anyone knee-jerks the "you asked for anarchy" response, bear in mind that A: libertarians generally are OK with contract enforcement and B: the real world legal system is apparently already quite involved, and I doubt anyone's complaining.

(Libertarianism isn't anarchy. If it were, we wouldn't need a separate word.)

sliverstorm• 12 years ago

libertarians generally are OK with contract enforcement

Although, the last hardcore libertarian I talked to suggested private contract enforcement, and I think I know where that leads- less civil suits, more broken kneecaps.

Crito2• 12 years ago

"I think I know where that leads- less civil suits, more broken kneecaps."

Unlikely, breaking kneecaps is manual labor that scales poorly.

In a short period of time abstraction layers would likely be built up to insulate creditors from the hassle of breaking kneecaps themselves. Debtor Prisons would probably arise, and with the realization that debtor prisons are not the most efficient way to extract an owed debt, debtors would be given the opportunity to agree to structured repayment of debt. Confiscation of property and/or the threat of imprisonment (backed by threats of violence that would rarely actually need to be carried out) would be used to enforce these repayment agreements. Hmm, this sounds familiar.

It's basically just a very round-about way of disassembling the current government and creating a new identical system that goes by a different name.

broolstoryco• 12 years ago

Many anarchists are also ok with contract enforcement

thenewbtg• 12 years ago

Kent described anarchy as law and freedom without force, and a republic as force with law and freedom.

shasta• 12 years ago

(Libertarianism isn't anarchy. If it were, we wouldn't need a separate word.)

Not that your conclusion is wrong, but if that argument worked we wouldn't need the word "synonym."

jerf3• 12 years ago

In English, synonyms are rarely equivalent. I can not come up with an example of two common-English words (i.e., not from a jargon set) that really are exactly the same, in all implications, off the top of my head. Some may exist, but in general if such a pair exists normal language processes will push the two apart in meaning anyhow.

dredmorbius• 12 years ago

Anarchy as used in the lay press, and as used by the anarchist movement, are not the same thing.

The lay meaning is more akin to "chaos" or "disorder".

An-archy comes, literally, from "no ruler" or "no hierarchy". There are numerous definitions but it's best understood as an order arising out of interactions among equals.

That to my mind is its key disadvantage: there are no equals, and in the Libertarian context, there's a vast overt blindness (which I suspect is a covert strategy) toward the power which accrues from wealth.

Noted by Adam Smith himself: “Wealth, as Mr. Hobbes says, is power.” (Wealth of Nations)

Disclosure: I am neither an anarchist nor libertarian.

DanBC• 12 years ago

So what's the method of the scam? Take money from people to build the machines; run the machines to earn bitcoin; use that bitcoin to repay anyone who complains and hope the bitcoin is profitable?

Could people sue for the lost opportunity of bit oin they could have earned if they had the machines?

IvyMike• 12 years ago

The eternal question I always have is: if you make machines that print money, why would you sell them?

There are several plausible answers, but it's still interesting to think about.

(Although in this case, the answer may be "they don't make machines that print money and they sell them anyway")

wmf• 12 years ago

The eternal answers from every mining thread: if you need crowdfunding to pay for your NRE or if you would prefer to have USD instead of BTC or if you would prefer to have a certain amount of money now rather than an uncertain amount later, etc.

betterunix• 12 years ago

The most obvious answer is this: you sell the money printing machine for more than the money it would have printed. In other words, anyone selling a mining rig believes that they will make more money from the sale than they would make from actually using the machine. If you buy the rig, you are making the opposite bet.

It is similar to futures trading.

kandalf• 12 years ago

A good question to ponder. But I think a very strong answer is that as a company producing bitcoin hardware you want to reduce exposure to bitcoin. Selling the machines (monetizing their future use value) instead of using them yourself does that to some extent.

frade33• 12 years ago

Where ever greed is involved, it must be administrated. Otherwise it would be as chaotic as sadly things are shaping up in the bitcoin world.

I will try to search for ARS article on butterfly, which went into depth about mining, actually it was my first time, I had completely known what is bitcoin mining. Now When I read 'butterfly' I was in a complete shock and awe.....

here it is. http://arstechnica.com/gadgets/2013/05/weve-got-a-butterfly-...

dobbsbob• 12 years ago

If you want an excellent example how to not run a company, go through this guy's post history

https://bitcointalk.org/index.php?topic=276848.msg4602313#ms...

'Inaba' is the COO of Butterfly Labs. He also runs his own mining pool (prob with customer miners)

Digging for answers: The “strong smell” of fraud from one Bitcoin miner maker

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