We Need to Talk About Butterfly Labs

Posted in: Archive
May 15, 2014 3:00 PM UTC

Entities like Butterfly Labs are an obstacle for the future success of Bitcoin.

Butterfly Labs is a problem. Not only because of an overarching plan to fleece Bitcoin users with empty promises but the audacity to proudly represent leading cryptocurrency entrepreneurs with an unprofessional attitude. If the people working at Butterfly Labs legitimately see Bitcoin as a game changing technology they are doing an appalling job of exemplifying the entrepreneurs involved with cryptocurrency as arguably the most prominent ASIC provider. However, I suspect that their loyalties lie with the cold hard cash they obtained from a willing userbase. Cryptocurrency enthusiasts need to wise up to well designed websites with lofty promises before diving into a seemingly promising product.

[dropcap size=small]T[/dropcap]o put it lightly Butterfly Labs doesn’t have the best track record at this stage. They have consistently time and time again pushed back deliverable dates for consumers who have made a considerable down-payment for the sake of the delivery date that came and went. A huge issue for products that are incredibly time-sensitive such as ASIC miners that become more useless as time passes as a result of rising network difficulty. Sure, the occasional product was shipped to media or those on the favorites list but to the detriment of consumers who had believed in the company from early days and put their money where their mouth was. Butterfly Labs not only has a lazy and half-baked attitude to deadlines but to the quality of their product and customer service. On early batches the number of actual chips on each ASIC was cut down in favour of overclocking to achieve the same hashrate but costing the consumer longevity and power efficiency. Practices such as these lead to 283 complaints being filed to the Federal Trade Commission between September 2012 and April 2014. The worst part about this is that individuals are unlikely to return from they’re complaint, current and potential users will be driven away from Bitcoin completely if entities such as Butterfly Labs are able to carry out such practices.
In evidence for these admittedly heartfelt convictions I point you towards the business conduct expressed by Josh Zerlan. You would think that as VP of Product Development Josh would be primed to answer questions and queries about development times for Butterfly Labs products. Especially if there were understandable delays that consumers where vocally concerned about. You would think that in such a scenario quelling these fears with a relaxed and reassuring attitude would be the best course of action to take. However in this video from CES 2013 Josh goes nuclear:

Even in the face of admittedly interrogating questions this brand of rudeness on a professional stage is unacceptable and surely unrepresentative of his peers. But it will be what stands out to those looking inward on the Bitcoin fold. It is understandable that repeated questions are annoying, but they are being asked for a reason. The “box” in question was literally an empty box covered in fans, a fitting metaphor for the empty promises offered by Butterfly Labs.
Despite my personal opinions regarding the etiquette of Josh Zerlan. Chris Vleisides, Director/President of Butterfly Labs, is a convicted felon. A man who orchestrated a large scale mail order scam from 1990 until 2006 involving “induce(ing) the victims to participate in various international lotteries, falsely stating that if the victims participated, they were guaranteed to win or had a very good chance to win”. Vleisides is subsequently forbidden by his parole to solicit funds. As a result, Vleisides is violating this parole as the entire business model of Butterfly Labs is based on solicited down-payments.
Users desperately need to do their research and vote with their wallets to eradicate such bad representations of Bitcoin entrepreneurs. Recognise these early define the leading figures of cryptocurrency entrepreneurship and I would honestly prefer them to not be the likes of Mark Karpelès and Josh Zerlan.

Last modified: June 10, 2020 5:22 PM UTC

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Samuel Barnes @gravysam

Computer Science Student. Excited for the future of cryptocurrencies.