30 Sep '14, 3pm

Why I almost bit on bitcoin and nearly bought into the Butterfly Labs scam - ZDNet

If I read Mr. Gewirtz correctly, Butterfly Labs wasn't engaging in a Ponzi Scheme. It was more akin to fraud and conversion. Customer buys new system from BL with money up front. BL then acquires a system, take a quick delivery, and diverts the system to generate bitcoins for themselves. After a few months, they ship the now sub-optimal system. And the customer now spends more to mine bitcoins than the value of the bitcoins the system generates. The fraud is with the representation that the system is new at delivery and possibly its value as an investment, depending on how they made the sales pitch. The conversion of computing power is a bit tricky legally because conversion is defined in terms of taking someone's money and using the investment of it for personal gain. Perhaps the money could be the purchase price, but I suppose the counter-argument would be that the custo...

Full article: http://www.zdnet.com/why-i-almost-bit-on-bitcoin-and-near...

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