Krypto Mining? Definitely Not a Kodak Moment

Kodak has recently announced that its plans to introduce an ASIC mining service with Spotlite USA have been scrapped. This is despite the unveiling of a ‘new’ ASIC machine and mining service at the International Consumer Electronics Show (CES).

Kodak has a long and illustrious history in the technology and imaging sectors. Dating back to the 19th century, the company’s longevity is the result of shrewd strategising and an ability to adapt to new industry trends and changes. The move to digital photography in the 1970s is a case in point. However, its recent foray into the world of cryptocurrency mining is one venture that Kodak may want to forget in a hurry.

Kashminer ASIC Unveiled

In January 2018 Kodak introduced the KashMiner at The International Consumer Electronics Show (CES) in Las Vegas. Designed for use with Bitcoin, the KashMiner ASIC was acquired from Spotlite USA and was to be the focal point for a brand-new mining service that rented out the hardware while providing cheap electricity. A new ICO called KodakCoin was also scheduled for release.

Nothing for Money

The mining rig was unveiled to a rather sceptical audience at CES, with Spotlite CEO Halston Mikail describing plans to install hundreds of KashMiner machines at Kodak’s New York headquarters. Mikail claimed the move was designed to take advantage of the premises’ onsite power supply and declared that 80 rigs were already in full operation.

The service required an up-front fee from customers which amounted to at least $3400 in rental costs, with just a 50% share of any ensuing profits. To take the sting out, Spotlite claimed that the service could generate up to $375 per month over a two-year rental period. And it was this forecast which caused the most disquiet among observers.

After doing the numbers, many critics found that the business model was unsustainable, suggesting that multiple ASICs were required to get even close to Spotlite’s projections.

Additionally, it was pointed out that the volatility of Bitcoin’s price and network mining power, rendered such calculations hopelessly inaccurate.

Aping the AntMiner?

Doubt was also cast on the actual Kashminer ASIC which bore more than a passing resemblance to the Bitmain Antminer T9+ – a machine that can be purchased for around $400. As a result, the project was labelled a scam.

It was therefore of little surprise when Spotlite USA recently announced that the project with Kodak had been abandoned. Kodak responded by suggesting that the plans were never officially sanctioned anyway and went on to deny that mining rigs were ever installed at its headquarters.

Spotlite seem unperturbed by its ill-fated ‘partnership’ with Kodak and have pledged to start mining operations in Iceland.

However, the whole episode has been something of an embarrassment for Kodak with media outlets such as the BBC gleefully announcing the whole sorry episode – there’s nothing quite like a failed American business venture to put smiles on faces at the Beeb.

What were they Thinking?

Despite Kodak’s efforts to distance itself from the failed enterprise, the company’s recent financial struggles may go some way in explaining the move. For the time-being at least then, its pretty safe to say that imaging and photography will remain Kodak’s preferred markets.