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Avalon accused of mining with customer ASICs

(@davidgilson) | Published on June 17, 2013 at 21:22 BST

Avalon, a maker of bitcoin ASICs, has been accused, on the Bitcoin Forum, of using its products to mine bitcoins before shipping to customers. The controversy came to light after a customer of the company reported having examined the configuration of his/her mining devices, and described one as being in a dusty condition and configured to contribute to coins to a bitcoin pool.

Furthermore, after querying the blockchain with the address stored in the ASIC under question, it was found that the device had paid to a bitcoin address that, on April 22, had received a total of 716.40851602 BTC.

According to other forum users, at least one other ASIC company (ASICMiner) openly mines with equipment that has been paid for by customers prior to shipping. If this is the standard form of business and all companies were open about the situation, at least miners would be informed as to what was going on, regardless of how acceptable they found the situation. However, Avalon's Yifu Guo has publicly denied this practice (see here on YouTube), which casts a different light on the contrary evidence.

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Image source

This raises an important question. Electronic hardware needs to be tested. However, in the realm of consumer technology, it is impractical to test all devices, and so testing is conducted on representative samples. In the case of bitcoin miners, it would seem that companies are test-running every single product.

It could be argued that these are for real-world, "burn in" tests. However, the companies can potentially profit from using items that legally belong to the customer. Furthermore, as more coins are mined, the difficulty level of the cryptographic calculations required to mine more coins increases, which arguably devalues the equipment being purchased.

Clearly, more information is needed and we'll report on any information we receive.

Have you received an ASIC miner with suspicious configurations? Please let us know in the comments.

[Via Reddit]

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