OPEN LETTER TO ZACH HERBERT.

Please issue refunds to your Obelisk customers and do the right thing.

Dear Zach,

In your Medium article last week, you told the recent buyers of your Obelisk units that the first DCR units are underperforming (although you hope for performance to increase). You also said that you do not anticipate shipping any units early, and the indications and tone are to brace for delays.

Importantly, you clarified that the units are underperforming. As you know, ASIC mining is based on very specific ROI predictions. The change in performance makes the ROI unattractive. Further, for some purchasers, like me, the expected delivery by September 30th (if met) makes a reduction in performance more acute. Underperformance is the difference between a buy and a no-buy decision.

Law, contract and custom allow for parties to cancel contracts when one party is unable to deliver. You have now stated that your product does not produce as advertised, and for this reason, any customer that has not yet received the product is entitled to a refund. Even absent a contract change, the law allows advance orders additional cancellation rights. I am one of those customers and I would like a refund. I did not expect your customer service to beat me over the head with this all-caps waiver found in the non-negotiable click-through contract-of-adhesion that was never emailed to me:

11. SPECIFIC DISCLAIMERS: THERE ARE A NUMBER OF FACTORS THAT MAY SIGNIFICANTLY, IF NOT ENTIRELY, DIMINISH THE VALUE OF, AND THE PURPOSE FOR, THE SIACOIN MINING APPLIANCE. YOU AGREE THAT YOU ASSUME ALL RISKS ASSOCIATED WITH THE DIMINUTION IN VALUE ASSOCIATED WITH THE SIACOIN MINING APPLIANCE INCLUDING THE FOLLOWING RISK FACTORS: [ . . .] THE SPECIFICATIONS FOR THE SIACOIN MINING APPLIANCE PROVIDED BY OBELISK AT THE TIME OF YOUR PRE-ORDER ARE ESTIMATES ONLY AND MAY NOT BE ACCURATE WHEN COMPARED TO THE SPECIFICATIONS OF THE FINAL SIACOIN MINING APPLIANCE THAT IS MADE AVAILABLE TO YOU.

With this language, you’re claiming the right to make whatever change you want, and you’re beating your customers over the head with this capitalized response. It’s not even a real contract because in addition to all the issues with it having been completely non-negotiable, you never provided me with a copy of it by email, nor did I sign it, review it, or receive a copy.

I’ll resist the temptation to show all the reasons why what you stand for will not stand up in court. Let’s just say that I’m a licensed attorney and have been appointed academic positions in law, and my additional experience with technical contracts, I am certain that the legal position you are taking will not sustain. You will not win any case by showing a court that language, especially when you never had a real contract with your customer (or even gave it to them). So please stop it. It’s not just legally wrong — it’s plain rude.

Please step up and work with the community. For those of us that have requested refunds, grant them. For others, work out an arrangement. It’s time to do the right thing here. We want you to join the community as a equipment provider, but these aren’t the terms on which to enter the market. You can do better.