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Bitcoin The Almighty Buck The Courts Hardware

Venture-Backed Bitcoin Miner Startup Can't Deliver On Time, Gets Sued 120

mpicpp (3454017) points out this story illustrating the problem of betting on the differential between the price of deliverable bitcoin-mining hardware and the price of bitcoin itself: Yet another Bitcoin miner manufacturer, CoinTerra, now faces legal action for not fulfilling an order when it originally promised to. CoinTerra is the third Bitcoin-related startup to face litigation for breach of contract and/or fraud in recent months. The CoinTerra lawsuit was filed in late April 2014 by an Oakland, California-based man seeking to be the lead plaintiff in a proposed class-action lawsuit. Lautaro Cline, the suit alleges, purchased a TerraMiner IV in October 2013 for delivery by January 2014. The company promised, he claims, that this miner would operate at two terahashes per second and would consume 1,200 watts of power. It did neither. However, Cline's suit also claims that CoinTerra did not deliver the miner until February 2014, and it "operated well below the speed advertised and consumed significantly more power than CoinTerra represented, causing Plaintiff to suffer significant lost profits and opportunities."
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Venture-Backed Bitcoin Miner Startup Can't Deliver On Time, Gets Sued

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  • by Qzukk ( 229616 ) on Tuesday June 24, 2014 @12:41PM (#47307193) Journal

    Why would anyone sell shovels? If it was profitable, they'd dig everything themselves.

    Actually, the real profit is in licensing the shovels with a per-scoop fee.

  • by sexconker ( 1179573 ) on Tuesday June 24, 2014 @01:01PM (#47307399)

    It is speculation because the price of bitcoins jumps around massively. Gold is nowhere near as volatile as bitcoins.

    It is not speculation. You can look up the difficulty and show what the man would have been able to mine had he gotten the device on time and as advertised.
    The price of bitcoins doesn't matter - you order CoinTerra to pay those lost bitcoins.
    CoinTerra won't have the bitcoins on hand to pay up, so lawyers will then bitch and fight over how to value those bitcoins in USD based on market rates at various times between the promised delivery date and now. It doesn't matter though - they won't have the cash to pay up either.

"The number of Unix installations has grown to 10, with more expected." -- The Unix Programmer's Manual, 2nd Edition, June, 1972