BitForce SC — Release notes | Butterfly Labs Page | of 2

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BitForce SC — Release notes

The BitForeo SC product line is ihe giant final siep in Ihe progression of SHA256 veriticalion technology. The implications for our customers are significant and wilh (his comes a measure of respansibilily thal we've worked hard lo raspecifully fold into our piensa. - a rn i

Along with encouragement, there has been quilo a lot of worry aboul these implicalions, We nope clarifying cur position and what you can expect from BF Labs inc. on these points may be heipful lo our customers as ihey dacide haw to procead with their SHA256 efforta

What's your trade In policy?

In recognition of the burden such an increase in hashing power puts on owners of our equipment, we've instiluled a policy designed io preserve the value of your invesiment through this lechnology change Our objective is to make sure you can recover your invesimenl whathar you wish to conlinue mining or not,

To achieve this goal, we wiil accept earlier genaralion unils :n Irade al full purchase price towards Ihe purchase of their new ASIC based counterparts:

What's a typical trade In example? A cusiomer can trade In his 832 MH/s Single and gel $598 credit lowards the purchase of a $1,299 SC Single, The end cost fo upgrade to 40 GH/s would be $699.

Do | have to ship my trado in whan | order the SC version? You may keep your current single (Gr Mini Rig) up to the date your SC based producl is ready We'll nolify you al [hal time and wait for yaui

trade in to arrive before releasing your unit

Can | trade in two old generation singles for ona SC version? No, You can only use trade in credit (0 pay for up to 50% of Ihe cost of the new gear, (otherwise, we'd go out of business pretty quickly)

| don’t want to mine anymore, what do | do with my Singles? The value of an oid Single on the secondary market should conlinue te huver close (u it's $599 purchase price minus shipping end any ecnvenience cosis of exchange with whoever wants {a buy il in preparation lo purchase an SC based product When we raceive il towards the purchase of an SC, il wili be accepled at it's full $599 vaiue This ensures thal you can gel cut ct your investment wilh no losses

How ara Minl Rigs traded in? Mini Rigs are traded in {he same way as Singles. Up to 50% of lhe purchase price of new SC gear can be paid for with trade in credil fram en vider generation Miri Rig 9 many ciaer generation Singles

How Jang will you continue to accept (rade Ins? Oui lrade in offer expires March 1, 2013,

Can | trade In my Singles even though | didn't buy them from you? Yes, we will honor trade In units whelher you purchased Ihem ciraclly from us or (scm a third party

Will you limit supply to would be 51% attackers?

We absoiuleiy wil nol kriowingly sei hardware la a clien| if we feel ihey pose 5 Ihreat io any netwark

Why are you selling so much performance for so Ilttie?

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BitForce SC — Release notes | Butterfly Labs Page 2 of 2

We fee! cheap & cowedul hashing gear is more valuable lo our cuslomers and lhe growln of the network: For exampie, our USB coffee warme: product {ihe ‘Jelapeno’) was designed for maximum gill-ability in time for the holiday sesson Il mighi fing a role as a tun staiter kil fa: would be netwerk participants white al Ihe same time increasing natwork d-ceniralizaien Im sum, cheaper & easier is betler and we'll cantinue to push this envelope

as company policy. Whai will happen to my Investment if ASIC competition arrives?

I's our belief that ASIC level compelilion }s inavilable, In expectation cf lhis, we've keg! our prices iow and we'll maintain them al stable rates.

There's no sich thing 48 a monopoly in a free market If you're greedy, someone can come along and fix the siiwation With this in mind, cur praducts are priced vary well relalive io ihe investments involved and thls leaves litlle room for profit motivated compelilors, This may very well induce 4 welcome phase of price stabdilily for SH1A255 apetators. In the end, wa believe success all comes cown to aggressive invesimient in product improvemrenl and a generous altilude lowards supporting the customers wa sarve. Price stability is 2 part of ihe equation

However, in ine event of a price war, il's fair to say Ihat the capabilily of the procucl may exceed Ihe figures published and our price / performance advantage will adjusl as needed to remain the top choice, Wilh the financial backing we have, we're able lo coritinue davelopment and prepare for Ihe future mission to supporl SHA256, no matter how jhe markel lurns. Please krow thal in doing this, we piedge tc continua tc respact the value of Ihe investment our custamers have made,

In tha end, compelition uttimale!y benefits overall network securily so everyane wins Why don’t you guys mina?

This is a papular question The answer is preily simple. Hardware is the focus of our passion. We're nardware designers,

So will the BitForce SC product line REALLY come oulin October?

This is a fair queslion. Let's review our track record, If you're not aware, our initial product, re BilForce Single had a slow delivery cycle. This was iniliaily due lo a jasi minuie design change before initial product release Wher; we did release it, we weren'l quile prepared for Ine explosive success we had. Afler several rourids af scaling, single delivery is in sufficient volume to catch up quickly

The Mini Rig produc! release has fcliowed il's development and release timeline pretiy weil, Initial deiveries aren't far from estimales and lhe speed of production is on pace to ensure most cuslomers will gel lheir Mini Rigs ahead af schedule,

The SC product jing has been urider development for quite some Lime and :s not the resull of an expediled development pracess Although lhere are always issues during development, cur leam is highly experienced in exacily this field and we're currently ahead of our original limeline. Honest Abe, we're scheduling shipmenis

fer October af 2012 Will It REALLY be as fast as you say? YES. il's reaily thai fast.

Let's review our lrack record once again Our most recent release was the Mini Rig it's performance exceeded spec by mare han 1 Ghis in speed while consuming 100V¥ less in power draw

Hromised: 25.2GH/s 1,260 Dakverad 264GHis 1.141

Our one blertish in spac eslimale was wilh cur orginal product [he Single was annouriced al 1 OA GIs @ >OVY, Howaver. we released it st 832 MHis @ OW. This wes part cl our introduciory learning curve scenic to this network hash aopiication which is really quite axlraerdinary and unkke simpie processor crypiography which is out backgreund. In the ond, we missed cur spend spec by 20% and power by 2 factor of 4 In faimess, we oNercd refunds and jowered our prices from $499 la $599 tu compensate The product was a Fil

and remains cur pest seller tc dale in short, we have tne experience acd heve shipped the mosi procuctin the industry You can court an tne

BO IWsiealand is coming lo @ netwerk near you

& Z072 Burestly Labs inc Toot

http://web.archive.org/web/20120704233640/http://www.butterflylabs.com/bitforce-sc-relea... 9/8/2014 Case 4:14-cv-00815-BCW Document 81-4 Filed 10/10/14 Page 3 of 3