- Camera company Kodak is partnering with a company to get into bitcoin mining.
- Its stock soared more than 100% on Tuesday after it announced it was launching its own 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 specifically designed to mine bitcoin, for a new line of bitcoin mining machines. The two companies plan to rent use of the machines to the public for thousands of dollars.
On Tuesday, at Kodak’s booth at CES, the tech industry trade show going on in Las Vegas, representatives of the company handed out flyers to promote the arrangement and the new mining computer, dubbed the Kodak KashMiner.
Kodak and Spotlite are asking potential customers to sign a two-year deal and pay $3,400 upfront to rent the mining machines, which are used to support the bitcoin network and create new bitcoins. 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 overall over the two-year rental period.
A Kodak representative did not immediately respond to Business Insider’s request for comment about the arrangement.
But some Twitter users harshly criticized the new service on the social network. Some argued that Kodak jumping into bitcoin mining was evidence of a bubble in cryptocurrencies. Others pointed out that because the difficulty of mining bitcoin gradually increases over time, Kodak KashMiner customers may see far smaller returns than they anticipated.
Among the reactions:
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
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 haven’t put off some customers, however. Spotlite’s existing capacity is already sold out, a company representative told the BBC.
“At this time we have 80 miners, and we expect another 300 to arrive shortly. There is a big pile-up of demand,” the representative said.
The new bitcoin mining rental service was one of two blockchain-related announcements from Kodak at CES on Tuesday. The company also announced that it is teaming 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% Tuesday on the news.
The company is only the latest to see its stock soar after announcing bitcoin- or blockchain-related news. Long Island Ice Tea Company’s stock price recently tripled after it renamed itself Long Blockchain, and the stock of a franchisee of the Hooters restaurant chain also jumped after it said it was moving into the space.