FTC shuts down Butterfly Labs, the second-most hated company in Bitcoinland!
The mining equipment company failed to deliver tens of thousands of computers, and delivered others so late they were obsolete.
Bitcoinupdate has been the first to tell you about this coming shutdown. We already told our readers on 5e of July.
Back in 2009
Bitcoin appeared by his creator Satoshi Nakamoto (R.I.P), anyone could run the mining software on an ordinary computer and crank out 50 bitcoins in a day. As bitcoin became more popular, mining got more competitive.
Bo corse of the the Bitcoin Difficulty to mine Bitcoin, exploded.
Soon miners started using more powerful graphics cards to mine bitcoin to compromise the increase of Bitcoin difficulty. Then serious miners began to devote racks of computers, like small personal data centers. Because there were so many miners chasing after the same bitcoins, mining got more and more expensive and the returns on investment got smaller and smaller. The bitcoin protocol is also designed to increase the difficulty of mining as time goes on, which further cut into miners' profits.
In June of 2012, Butterfly Labs became one of the first pop-up companies to announce a breakthrough in mining technology: application-specific integrated circuits, or "ASICs," designed specifically to mine bitcoin 1,000 times faster.
We still remember ordering two butterfly labs Jalapeno that never came (until last month i received email that it was coming)
At least two other companies cropped up, promising similar machines (KnC). Miners rushed to place pre-orders. Some became loyal to certain sellers; others hedged their bets by ordering from all three. Whoever got their machines first would reap a windfall in mining profits before the rest of the mining world caught up.
Butterfly Labs promised their customers that preorders would ship as soon as possible. But they soon became evasive, issuing a series of shifting dates. At the time, the company told customers that the first ASICs would ship by December. Instead, by most accounts, the first shipments started trickling out August.
The Bitcoin prise shootsup after closing Butterfly labs.