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TerraHash, the Californian company which has been promising Avalon-based ASIC miners, has started taking preorders on its website – but has also lost over $100,000 worth of business due to late delivery.

The company, which announced its entry into the ASIC mining market just over a month ago, is promising a device it is calling the DX Large. It will use boards designed to contain ASIC chips manufactured by BitSynCom, which has announced that it will sell those chips independently to manufacturers.

TerraHash had previously said that it wouldn’t take payment for products until they were ready to ship, but yesterday it backtracked on that policy, opening up a preorder option on its web site, even though it will be at least 4-6 weeks before customers see their units.

“Customer demand was one of the biggest reasons,” Amir Khan, a director at TerraHash, told CoinDesk. Another was logistical. “We wanted to ensure that we had a constant supply, and for that we needed more money to buy more chips.”

In the meantime, the firm has lost its biggest customer to date. Emmanuel Abiodun, founder of UK-based cloud mining company Cloudhashing, has cancelled his order with the company.

Abiodun originally ordered $105,000 of equipment from TerraHash, sending $79,109.13 up front on 14th of May (for which he complains he didn't get a receipt). This was an upfront payment, with the remainder stored in a company savings account to ringfence it. However, on June 4, he issued a formal request for a refund.

“We made the order while being led to believe that we would get the hardware at the end of June,” said Abiodun. For people like him, ASIC mining business is all about getting the first products to secure an early advantage before more ASIC power piles into the network and sends mining difficulty soaring. “If they deliver in mid-July then it doesn’t give us much advantage over when Butterfly Labs would deliver.”

Cloudhashing had also ordered ASIC miners from TerraHash competitor Butterfly Labs. Although it hasn’t cancelled those orders, it won’t be placing any more, either.

One other reason for the TerraHash cancellation was down to product quality. “The Avalon chips are very power-inefficient. On that basis, the scalability isn't workable,” he said. When TerraHash was working to a late June delivery date, it was still worth getting the equipment for the short-term time advantage. When the deadline slipped, it wasn’t worth pursuing.

Abiodun, who has now opted for Swedish ASIC mining equipment vendor KnCMiner, also criticised Avalon and TerraHash’s communication skills.

“The problem I have with Avalon is that it seems to have taken more of a hobbyist approach to getting things done. The fact that I can't even get the Avalon guys to talk on the phone with me is a big worry for me in the first place,” he said, adding that he also struggled to get TerraHash to talk with him on the phone. “I would rather talk to people who are focused on providing customer service. I’m looking for long-term business relationships.”

Khan said that the loss of the Cloudhashing order was “not a big deal,” arguing that it had little effect on the manufacturer.

He also responded to the power efficiency criticism. Avalon’s chips are built using a less dense fabrication technology to Butterfly Labs’ chips, leading to a difference in power efficiency, admitted Khan. However, “our industrial engineer did all the simulations, so we don't see any heat issues,” he added.

The Avalon chips should hit TerraHash’s loading dock by mid-late July. “Once we have those chips it shouldn't take long to deliver the product,” he said, advising companies to expect a two-week gap between receipt of the chips and the first product shipments.

The company received 30 chips from BitSynCom late last week, and has been using them to begin testing the Klondike board that was built for it using the reference design produced by BitSynCom for the Avalon chips. This testing should take 2-3 weeks, said Khan.

TerraHash will use the chips and boards to build two modular systems. DX Large is designed to take up to 10 boards, each of which uses 64 chips to produce 18 GH/sec and consumes around 128 W of power.

Also on offer is its smaller brother, the DX Mini, which can contain up to 20 boards, each offering 4.5 GH/sec, for a maximum total of 90 GH/sec. That starts at $1250 for a one board unit including a power supply, and will set you back $6000 for the fully loaded version.

Now that customers are able to preorder for the systems, they will want to know how the company will prioritise them. Khan confirmed that it will fulfill preorders on a strict first-come, first-served, per-order basis. The largest preorder received yesterday was for two fully-loaded DX Large units. An order like this, requiring 1280 chips, would be fulfilled before the next in the queue, even if the next needed only 16 chips to be shipped.

Once the chips arrive, the company should be able to begin producing them relatively quickly. It has its own surface mount technology (SMT) assembly line that can theoretically produce 150 18GH/sec cards per day (although Khan wouldn’t officially commit to that number).

Khan wasn’t worried by allegations on the Bitcoin forums that the firm was operating a scam. Such accusations are levied at many new ventures on the forums, especially ASIC mining rigs, and Butterfly Labs has also been scorched by scam rumours.

“Some people that have been burned in the past, once you get bitten by a snake, you're afraid,” Khan said. “It's their right to question the credibility of a company and we have provided all the information that people have wanted.”

The firm has posted pictures of its physical offices on its blog, along with its address, and asked people to stop by. It has also posted a copy of its Avalon order status screen on the forums.

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