Spotlite’s bitcoin mining machine. Although on display at Kodak’s booth at CES, it notably lacks a Kodak logo.Matt Weinberger/Business Insider
- The camera company Kodak is partnering with a company to get into bitcoin mining.
- Kodak’s stock soared more than 100% on Tuesday after it announced it would launch a cryptocurrency.
- Critics have attacked the company over the mining scheme amid fears of a cryptocurrency bubble.
Another day, another unusual company taking the dive into the cryptocurrency space.
Kodak, the once iconic camera company, is licensing its brand to Spotlite, which builds computers designed to mine bitcoin, for a new line of bitcoin-mining machines that they plan to rent to the public for thousands of dollars. Although just how associated Kodak wants to be with the device is an open question.
On Tuesday, at Kodak’s booth at CES, the tech industry trade show in Las Vegas this week, the company’s representatives handed out flyers to promote the arrangement and the new mining computer, then dubbed the Kodak KashMiner. In a photograph on the flyers, the device had the Kodak logo featured prominently.
When we returned to Kodak’s booth on Thursday, the company had one of the actual bitcoin miners on display. But the brand on the device was Spotlite’s, not Kodak’s.
This is how the bitcoin mining machine was depicted on a flyer Kodak handed out at CES. Note the “Kodak” logo.Matt Weinberger/Business Insider
While they may not have decided on the branding of the miner, Kodak and Spotlite have certainly figured out the financial arrangements for offering it to customers. The companies are asking prospective customers to sign a two-year deal and pay $3,400 up front to rent the mining machines, which are used to support the bitcoin network and create new coins. As part of the agreement, Spotlite gets to keep half of all proceeds the machines generate by mining bitcoin.
Spotlite and Kodak estimate customers will earn $375 a month, making $9,000 over the two-year rental period.
A Kodak representative did not immediately respond to Business Insider’s request for comment about the arrangement.
The inside of the flyer details the terms of Kodak’s deal.Matt Weinberger/Business Insider
But some people harshly criticized the new service on Twitter. Some argued that Kodak’s jumping into bitcoin mining was evidence of a bubble in cryptocurrencies. Others said that because mining bitcoin gradually becomes more difficult over time, Kodak KashMiner customers may see far smaller returns than they anticipated.
There is no way your magical Kodak miner will make the same $375 every month, unless Bitcoin mining difficulty stays the same. It is currently increasing at around 15% a month, so mining output should drop around 15% a month, too. Good luck to everyone who bought this deal! pic.twitter.com/0xA2HNtHFc
— Saifedean Ammous (@saifedean) January 10, 2018
Allowing for the 15% difficulty adjustment, the actual returns on the Kodak miner will be $2,457 on a $3,400 investment.
SFYL but please be sure to take a selfie with your non-Kodak cellphone camera while holding the miner for the Ultimate Kodak Moment!
— Saifedean Ammous (@saifedean) January 10, 2018
Kodak is selling a Bitcoin miner where you pay for a two year contract and “make a profit”. (*at current prices, Kodak gets half of all bitcoin you produce.) This is the dumbest shit I’ve ever seen at CES. pic.twitter.com/rbzECVEMn7
— Chris Hoffman (@chrisbhoffman) January 9, 2018
I work for a company that is building a Bitcoin mining facility. I’ve spent countless hours building complex spreadsheets, modeling price fluctuations, scouting green energy, accounting for difficulty…
— Laz Alberto (@LazAlberto) January 9, 2018
Dot-com madness all over again. Shares in Kodak jumped 77% after it said it would launch Kodakcoin, “a photocentric cryptocurrency to empower photographers and agencies to take greater control in image rights management” https://t.co/nW5QMwFaHX
— hussein kanji (@hkanji) January 10, 2018
Such concerns, however, haven’t put off some customers — Spotlite’s existing capacity is already sold out, a representative told the BBC.
“At this time we have 80 miners, and we expect another 300 to arrive shortly,” the representative said. “There is a big pile-up of demand.”
The new bitcoin-mining rental service was one of two blockchain-related announcements from Kodak at CES on Tuesday.
The company also said it would team up with Wenn Digital to launch a blockchain-based rights-management service and related cryptocurrency. The service is aimed at tracking the online use of licensed photographs and ensuring photographers get paid for their works.
Kodak’s stock skyrocketed more than 117% on Tuesday.
The company is the latest to see its stock soar after announcing bitcoin- or blockchain-related news. Shares of Long Island Ice Tea Corp. tripled in price after it renamed itself Long Blockchain last month, and those of a franchisee of the Hooters restaurant chain jumped last week after it said it would move into the space.