Mining Overview: Butterfly Labs Reopening and the Future of Bitcoin Mining

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by Polina Chernykh · 3 min read
Mining Overview: Butterfly Labs Reopening and the Future of Bitcoin Mining
Sonny Vleisides (right), is Butterfly Labs' co-founder and largest shareholder. Photo: Nasser Ghosieiri/Facebook

The past week’s roundup features Butterfly Labs reopening and view on the future of bitcoin mining.

Given the recent negative events in the bitcoin industry, including price drop and Butterfly labs shutdown, bitcoin entrepreneurs consider it is not likely to stop miners from hashing.

Butterfly Labs Was Allowed to Reopen and Perform ‘Limited’ Operations

The US Federal Trade Commission (FTC) allowed bitcoin company Butterfly Labs to start operations, although with limitations.

The company’s official statement released on October 2nd, 2014 is as follows:

“Although Butterfly Labs is still disturbed with the Federal Trade Commission’s rush to judgment and labeling of the company as bogus and scammers, Butterfly Labs is pleased by the Court’s entry of a Stipulated Interim Order, which allows the company to reopen its doors for limited operations.

While the Order does not allow Butterfly Labs to fully serve our customers as desired, it is a step in the right direction and will allow for limited order fulfillment. During the period of the Court’s Order, Butterfly Labs will continue to cooperate closely with the Court-appointed Temporary Receiver.

“Butterfly Labs views the Order as a promising sign for the future of our company, our customers, and our employees. This lawsuit has severely damaged our reputation and it is up to Butterfly Labs to attempt to repair that damage.

“There are a number of unsubstantiated claims circulating about Butterfly Labs. We intend to address all inaccuracies in due course, including the false claims around burn-in testing and Butterfly Labs inappropriately mining bitcoins with customer equipment.

“Butterfly Labs thanks its many customers, employees, and business partners for staying with us during this challenging time.”

Butterfly Labs ceased its operations on September 23rd, following an order from the US federal court.

The company was accused of failing to supply its bitcoin mining hardware to the thousands of consumers and sometimes even declined the orders at all.

In general, over 20,000 consumers have not received the hardware. By the time the consumers received their miners, the FTC said they were almost useless.

According to FTC, before shipping the machines, the company used the hardware to generate their own profits. Butterfly Labs’s owners continuously used the funds for their personal needs. In total, the company received about $20-$50 in preorders from its customers.

Will Bitcoin Mining be Profitable in the Future?

Many bitcoin miners wonder if mining will bring profits in the future, taking into account the recent bitcoin price fall to $320.

The decline could cause problems for some miners who has bought ASICs and intends to obtain revenues. The situation is likely to impact smaller-scale operations, rather than larger miners.

Industrial companies and independent miners would be able to stand against a price drop due to the cheaper access to electricity and ability to mine larger amounts of bitcoins.

Even if mining is no longer profitable there are some reasons to continue mining. Some will probably hold bitcoins in hopes of a future price increase.

Altcoin News, Bitcoin News, Cryptocurrency news, News
Polina Chernykh

Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.

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