A better solution imho would have been to ask for the customer's Bitcoin address and do their testing with the client reaping the rewards of mining early.
The biggest mistake BFL made was basically ensuring that everybody lost money. They were too greedy. If they had even made their customers 5% ROI I doubt they would be in the situation currently.
What people don't understand is that when BFL mined with the hardware they sold, they effectively made the difficulty of the block chain rise stupidly fast, thus lowering the value of the system. Any advantage customers (like me) would have had was thrown out the door.
It is essentially the equivalent of a car dealer selling you a car claiming it is new when in fact they drove it 150,000 miles.
I was told by a BFL employee that my order would have been shipped before the end of july 2013... I didn't get my units till 11/4/2013
During that time I watched what could have been my returns fly out the door.
They may have lost $16B but, as they were converting customer deposits into coins the customer did not buy, such as FTT but also many others, then it seems bad math to value the customer deposits at $16B - prior to essentially shorting against their customers, perhaps those deposits were worth 5x more. And it doesn't seem unreasonable to believe more deposits would have been made, if the price of the assets their customers hoped to buy (Bitcoin is far and away the market leader) were not being shorted in this manner.
I'm not a mathematician but their activities may have amounted to many tens of billions of sell pressure against Bitcoin. Elon Musk purchased $1.5B and the price of this finite asset rallied tremendously, what might these tens of billions have resulted in?
So many screw ups here because of bad or no company policy. It's hard to feel bad for these guys. No live/voice confirmation between the CEO and CFO during the transfer of $700,000 worth of Bitcoins? No confirmation with the purchaser? No two factor authentication on their Google accounts?
Basically, BFL pre-sold a ton of miners to people, never actually sent them, mined a ton of bitcoin 'testing' them and were then sued when they refused refunds. The FTC got involved and told them to send customers their money so at some point, BFL has to liquidate a large number of coins to meet those obligations.
People have tracked large portions of the sell pressure to known BFL wallets and the rest of the downward pressure is probably just follow-on selling continuing the yearly trend.
Yeah, I think their fundamental error was making a definitive way to join a future airdrop.
They should have just given coins to existing active keybase users. They would have had healthy increase in users based on regret and fear of missing out again.
Steps 3 and 4 were not fixing it as best as they could. They are just doing another wrong thing trying to cover the earlier mistake by sacrificing another group of their customers instead of Bitfinex itself. This group of their customers are also innocent as they are just lured by the foolish policy. They could transfer their BTC to the personal wallet to get BCH if they were not lured. Everyone playing game in Bitfinex is trying to maximize profits based on its policy, robbing or being robbed. The one who breaks the policy or changes the policy without notifying is the nasty one.
This reads like a case study in pure incompetance at every possible level. Lack of vetting, no third party auditing, poor segregation of customer funds. It's a total shit show. This should permanently damage their business and reputation, but the Bitcoin community has always been forgiving of people who lose their money. Fool me once...
Last time I checked, their hot wallet had less than 5% of the bitcoins on their books. A catastrophic data break would leave most of their customers without either their bitcoins or any way to be made whole from the loss.
They should have stopped using that hot wallet immediately as soon as transfers not authorized by them happened. They detected that manually after a few hours, not automatically. There's still much to be improved in terms of security in Bitcoin exchanges.
Should have known! Like ten minutes before I expected 1.2x to be gathered and my payout to be done, the site reports "The experiment is over." Come on guys, just let it run. I would have accepted it if it just 'died of natural causes' and I lost all I put in (which is not much, 0.03); that was my gamble. Not that you'd pull the plug.
Somehow their pulling the plug just really bothers me much more than losing it would have been. Especially because at the rate at which it was going, payout was more or less ensured (300btc * 1.2 = 360. They quit 16 coins short). Right now, two hours after they supposedly would pay everyone back, I still got nothing.
What I mean is that when the hack occurred I lost 30% of my funds. However, I received BFX tokens equivalent to the amount I lost. Eventually, as Bitfinex continued operating and accumulating fees from operations, they paid me back 1:1 USD for BFX tokens they had given me as debt.
So, I did lose the time-value of that money (they didn't pay me interest on it), and I didn't get paid back in Bitcoin or Ethereum, which would have been more money, but i'm still very happy with how they handled it. I think it was the most reasonable and honest solution to the problem that they had available to them at the time.
The biggest mistake BFL made was basically ensuring that everybody lost money. They were too greedy. If they had even made their customers 5% ROI I doubt they would be in the situation currently.
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