CoinTerra is yet another mining rig supplier facing legal action over allegations of false advertising and unfulfilled orders. In April, an Oakland customer led a class-action suit after receiving an order that didn’t come close to meeting stated specifications.
The TerraMinerr IV is advertising of churning out 2 TH/s (2 terrahash = 2 trillion hash, per second) and consuming 1200 watts. The unit received seemed to almost reverse these specs, maxing at 1.6 TH/s and consuming 2100 watts.
In addition, units ordered in October did not arrive by the promised January shipping date. As compensation, CoinTerra offered a 15% discount for future purchases, a 5% coupon and a full refund.
The customer rejected their offers, instead demanding a replacement that functions as advertised. He claims he never received a response. When the unit did arrive in February, it did not perform to specs.
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The two parties are now working to settle out of court.
With the creditworthiness of mining rig suppliers now seriously called into question, miners have yet another hurdle to deal with when trying to set up reliable, profitable mining operations. They already have a tough time breaking even with stunted bitcoin prices and increasing difficulty levels. The instability posed by the still-unsettled issue of 51% attacks does not help either.
A commenter on arstechnica eloquently compared today’s mining environment to the gold rush. Bitcoins are compared to gold, and mining rigs to shovels:
“They say that during a gold rush the only ones making any money are the ones selling the shovels.
Now it looks like we have a “shovel rush”.
Let me be the first to say that “during a shovel rush, the only ones making any money are the lawyers”.