UPDATED 15:04 EDT / MAY 21 2013

Butterfly Labs’ Bitcoin Kerfuffle is “Classic” Startup Mistake

The long awaited Bitcoin miners from Butterfly Labs are finally shipping after 8 months of delay.  The company offers four configurations: Jalapeno, which is a 5 GH/s Bitcoin Miner; “Little Single” a 25 GH/s Bitcoin Miner; “Single” a 50 GH/S Bitcoin Miner; and the Mini Rig which is a 1,500 GH/s Bitcoin Miner.

The ASIC Bitcoin mining gear offers the same stuff that people used to get from using Radeon or Nvidia video cards in mining bitcoins, but have been created specifically for that task so it performs better and faster.

Butterfly Labs has been plagued with mounting concern from disgruntled customers, which led to company reps delivering harsh rebuttals including Josh Zerlan’s, the company spokesperson, statement on its forum which read “You received no answer because your question was so incredibly stupid that it doesn’t deserve an answer.”

Joining Kristin Feledy in this morning’s NewsDesk is SiliconANGLE Founding Editor Mark “Rizzn” Hopkins, providing his Breaking Analysis on Butterfly Labs’ ASIC Bitcoin mining gears and the harsh statements directed at customers who wanted some answers.

Is there’s more to the delay than just production issues?  Are the mining gears really shipping?

According to Hopkins, the gears are really shipping and he personally knows people who have received their gears.  As far as the outbursts go, it’s not something that happened because of other unknown issues that customers need to worry over.  Hopkins explains that “customer service is not in the repertoire of the Butterfly Labs folks, which is geeks and engineers.” These geeky skills and “social graces don’t usually go hand-in-hand,” says Hopkins.

He also noted that the Butterfly Labs kerfuffle is a classic mistake done by startup entrepreneurs: over-promising and under delivering.  You cannot blame customers for reacting harshly regarding the delays, especially when they’ve already paid for the gear. Unfortunately, as stated earlier, Butterfly Labs’ people weren’t well-prepared to handle disgruntled customers.

For more of Hopkins’ Breaking Analysis and to learn more about Butterfly Labs’ ASIC Bitcoin mining gears, check out the NewsDesk video below:


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