Butterfly Labs ships long-awaited ASIC bitcoin miners

Butterfly Labs is shipping some ASIC mining rigs to users - but how many can it deliver, and how quickly?

AccessTimeIconMay 20, 2013 at 6:37 p.m. UTC
Updated Sep 10, 2021 at 10:46 a.m. UTC
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It's eight months late, but it looks as though Butterfly Labs is finally starting to ship some of its ASIC bitcoin mining equipment to customers.

The Kansas-based company has repeatedly delayed customer shipments of its ASIC mining products, which were originally announced last June, and were scheduled to ship starting last October. Customers are getting angry, and the company’s representatives aren’t helping by trading insults on public forums.

On Sunday, though, a Butterfly Labs representative posted on the company's support forum that shipments were beginning. “A few went out Saturday and more will be ready to go Monday,” he wrote, adding that the shipments were mostly from orders placed in June last year, almost a year ago.

. Indeed, an unofficial site has been set up to try and track the shipment queue.

has promised four equipment configurations, ranging from the 5 Ghashes/sec Jalapeno, through to the 1,500 Ghashes/sec Mini Rig. The Jalapeno was touted as a coffee coaster-sized unit that would be powered via a USB port.

In the middle were the "Little Single" and "Single" boxes, offering middle-range hashing power, somewhere between the small and the large rigs.

Customers have been placing pre-orders for 10 months but, aside from a few early units reviewed by the press, none has appeared. Butterfly Labs has a refund policy for customers who are fed up waiting but, nevertheless, the bitcoin forums are buzzing with irritated buyers.

The ASIC business had started promisingly for Butterfly Labs. The firm publicized the specifications for its ASIC mining gear in Bitcoin Magazine last September. Users could expect mining for 1 watt per Ghash/sec, according to the article. All the devices would use custom 65-nm ASICs, which would help to keep the power consumption down.

Within months, though, things went awry. In January, company spokesperson Josh Zerlan posted an apology on the firm’s discussion board, acknowledging continuing delays.

“We had fully intended to be ready by October for shipping and deeply regret that we have not been able to meet our timelines,” he wrote. “Our delays are a result of the complexity of the project and we have overcome essentially all obstacles at this point and are in the home stretch.”

But that final furlong was longer than anticipated. At the end of January, Zerlan posted about a projected February ship date: “If the worst case scenario in every step comes to pass, we are looking at starting shipping around Monday the 18th.”

Then, at the end of March, nearly six weeks later, came more news: the company was having problems with the power needed to run the units.

“In the interest of time, we are planning on potentially scaling back units hashing speed as required to accommodate the extra power and shipping multiple units to those that want their units right now,” Zerlan noted. The next day, he issued a clarification: “We are not shipping yet.”

On April 15, Zerlan said the company was getting hardware and software issues “nailed down”. He cited the need to re-engineer the power system on the boards, adding it had become clear that the original power consumption specification for the 5 Ghash/sec units wasn’t going to fly: “Power usage exceeds the 1w/GH, unfortunately, but it's much better than anything out by 40 - 50 percent, at the wall.”

Finally, in April, a small number of devices started appearing. Zerlan said that the company had shipped 35 of them, half to developers and the media, and the other half to customers.

But that didn’t take the firm into full-scale production. Early this month, he posted that the chip supplier was “dragging their feet”. Three days later, he reported that the Butterfly Labs testing facility was expecting 100 chips in Chicago on May 14.

“We are having some trouble with the new Single board and we are working through the issues now and should hopefully have a resolution before the end of the week,” Zerlan added.

Zerlan, who didn’t respond to messages from CoinDesk, has been less polite on enthusiast forums. On May 14, the day the chips were meant to arrive, he responded to a question from one customer on the Bitcoin Talk forum who had asked about prior shipment delays.

“You received no answer because your question was so incredibly stupid that it doesn't deserve an answer,” Zerlan wrote, adding later, “This is why I don't take you seriously... you can't even form a cogent thought on simple mechanics, such as assembly.”

But others who claim experience in the field also have questions. “I have a bit of experience with VLSI and one of the things that we always worry about is the power consumption and the cooling system,” said Colorado-based mathematician Charles Hoskinson, director of the Bitcoin Education Project and a student of cryptography.

Butterfly Labs might well fit 5 Ghashes/sec into a small box that sits on a desk, but Hoskinson's concern is around the largest product in its lineup: the 1,500 Ghash/sec Minirig unit, which was originally priced at $30,000, and for which the firm has been taking pre-orders

“I figured this product couldn’t exist,” Hoskinson told CoinDesk.

Why? At the 1 watt per Gigahash/sec spec that Butterfly Labs originally suggested, scaling up the power consumption on the 5 GHash/sec units to 1,500GHash/sec would require around 1500 watts. Hoskinson says that chips doing this sort of mathematical heavy lifting need lots of cooling.

“There are many fans running concurrently," he said. "It’s a big power supply running very hot.”

Nevertheless, at 1 watt per Ghash/sec, it’s not impractical. A microwave oven would chew through about as much power.

The Single 5 Ghash/sec Jalapeno units seem to consume decidedly more.

“Imagine six times that power consumption,” Hoskinson said.

David Perry, one blogger who received a 5 Ghash/sec unit, discovered that it consumed around 30 watts. (CoinDesk wrote about Perry unboxing one unit in a sneak preview.) That equates to around 6 watts per Ghash/sec. Ars Technica said that its unit consumed 50 watts, which equals 10 watts per Ghash/sec.

Aside from the power consumption, there's been another change from the original spec: the size. No longer is the Jalapeno a coffee coaster-sized unit. It's far thicker. A heat sink seems to have taken up the extra space, as demonstrated by Ars Technica’s pictures of the heat sink for the 5 Ghash/sec unit.

“You’re talking about something that’s about 9 kilowatts of power in the space of a computer case,” said Hoskinson, working from those figures. “If they were talking about an eight-foot foot server chassis, then that would make much more sense.”

Yet the Mini Rig pictured on the Butterfly Labs web site is clearly far smaller. The device, which uses an eight-inch Nexus 7 for a control panel, appears to be around 18 inches high and perhaps two to two-and-a-half feet long.

Nevertheless, some customers are keeping the faith, waiting for those 1,500 Ghash/sec Mini Rigs ... and losing money daily. Emmanuel Abiodun, founder of UK cloud-based mining company Cloudhashing, ordered four units from Butterfly Labs between February and April. Butterfly Labs recently revised the shipment date for his units from early May to June.

“We would have had two by now," Abiodun said. “At the current difficulty I would be making $15,870 per day. It’s a big loss.”

Abiodun also had to make contingency plans that almost doubled his existing hardware investment.

“They’re saying they are having delays,” Abiodun said. “I have not received the units now, and because I fear that I might not get delivery in June, I had to spend $100k today purchasing loads of Avalon equipment to get me running for my customers.”

Unlike the other rigs on the Butterfly Labs web site, the 1,500 Ghash/sec rigs on the Butterfly Labs site are listed as out of stock. The company is not publishing current power specifications for any of its products.

Still, Abiodun isn’t fazed.

“What they’ve said in their messages to all of us is that they’re finding the power consumption has increased, but to handle the increased power consumption, they might have to double up on a unit,” he said. One option is to reduce the amount of chips that they put into a Mini Rig, and send people two instead, along with extra "Singles" – the 5 Ghash/sec boxes – to bump up the hash rate.

But it isn’t clear when or if this will happen, and customers like Abiodun could be in for a long wait.

“We don't know when the Mini Rig will be redesigned, how fast it will be, how much it will cost, etc,” the Butterfly Labs representative noted Sunday while reporting the Jalapeno shipments. “We are concentrating on getting our backlog of orders shipped.”

Customers are getting refunds, but Abiodun maintains that many of them will stay in the queue, eager to finally get the equipment that could see them generating bitcoins far faster than they could with GPUs or FPGAs.

“People are so fed up with waiting they don’t care about the power consumption,” Abiodun said. “It’s a game of getting it sooner than later.”

Abiodun added that he just ordered a custom-built, 2,000 Ghash/sec Avalon-based machine consuming 14.6 kilowatts of power.

“That’s 7.3 kilowatts per Ghash/sec,” he pointed out.

There's at least one more complication in the Butterfly Labs story. The company is likely to have taken in a significant amount of money from customers over the past 10 months, and accepts payments in either bitcoins or dollars. When Butterfly Labs started taking orders in June 2012, bitcoins traded at under $10. This week, the currency once again broke past the $120 mark.

If customers get refunds, will they be refunded with bitcoins at current market value? If not, who gets the profit? Neither Zerlan or Butterfly Labs’ president Sonny Vleisides returned our calls or mails.

Such is the level of concern over Butterfly Labs’ continuing delays that entire third-party websites have been set up to track the company's progress. Will the firm get more chips from the manufacturer soon? Will they be able to sustain shipments to fill the order backlog, or will shipments continue to sputter and stall?

Many customers are hoping for the best ... and they’re determined not to budge from the queue. With bitcoins trading an order of magnitude higher than they were nine months ago, gigahashes are a hot commodity indeed.


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