Inside Butterfly Labs: The challenges of producing bitcoin mining hardware

CoinDesk’s Daniel Cawrey recently visited and toured the facilities at Butterfly Labs, one of the most prominent and written about producers of bitcoin mining technology. In this first part of this series, he reports on how they’ve tried to manage customer expectations and why they stay away from mining themselves.

“We understand that we didn’t deliver on time, you know? We take responsibility for what we’ve done”. I nod as I’m listening to Jeff Ownby, who is the VP of marketing for Butterfly Labs in the company’s conference room at their headquarters near Kansas City.

Indeed, Butterfly Labs admits that they’ve made mistakes in the past, but they want to move forward and I get the sense that they really want to do right by their customers. “Bitcoin has grown from a forum realm to a business realm,” Ownby tells me. “I think we’re past the ‘BFL is a scam’ thing at this point. We’re in this for the long haul”.
Meeting expectations

It has been written with a fair amount of frequency that Butterfly Labs had been unable to meet the expectations of its early customers. Indeed, CoinDesk has written about the company with a degree of mystique as its ASIC hardware began to appear. Many of BFL’s customers put down a significant amount of money to preorder hardware, expecting to be at the forefront of the ASIC mining revolution.

Butterfly Labs aimed to be one of the first companies to offer ASIC bitcoin mining hardware, but problems with their chip designers resulted in deadlines slipping. In that time, organizations like Avalon were able to ship ASIC hardware and to also supply OEM chips for other manufacturers.

This meant Butterfly Labs received a lot of attention in the bitcoin and mining communities, and much of that has been critical and negative. Some don’t even believe that Butterfly Labs is a real company. But I can tell you, from the moment I contacted them to ultimately seeing their facility, it’s all very real.