Why Kodak Bitcoin Scheme Is a Scam to Avoid
Like your college friend who won’t stop posting on Facebook, Kodak is really into cryptocurrencies . At CES 2018, the company announced a two-pronged blockchain strategy: 1) a proprietary cryptocurrency called KodakCoin, designed to improve image rights for photographers, and 2) a bitcoin mining scheme called KashMiner, where customers can rent hardware and supposedly earn more than two. … annual period.
The first option is not a bad idea. It uses blockchain technology to solve a legitimate problem, and the well-established Kodak brand can help popularize the idea of a public image rights registry to ensure photographers are paid for their work. However, the second announcement is quickly dismissed as a scam and proof that the Bitcoin bubble is dangerously close to bursting .
Here’s what’s wrong with KashMiner and why you should probably avoid it at all costs.
At first glance, Kodak’s claims are almost the same. Basically, the company is asking you to pay $ 3,400 as an upfront investment to buy a Bitcoin mining rig. Spotlite, which licenses the Kodak brand for this business, will cover the maintenance costs and you share the profits. The company estimates that you will be making $ 375 a month (just $ 9,000 over two years) based on the current bitcoin value and current mining rate, but this is where this whole scheme falls apart.
One of the basic tenets of Bitcoin mining is that it gets more complicated over time. As such, the bitcoin production rate for one of these KashMiners will drop significantly over the next two years. It is possible (probably even) that the value of Bitcoin could rise at the same time, but there is no guarantee that this will be enough to equalize the investment.
According to one “bitcoin economist”, the final profit could be as little as $ 2,457. That’s a lot less than Spotlite and Kodak promise at $ 5,600 ($ 9,000 minus $ 3,400 upfront investment).
This is quite a far cry from what was promised in advance, and given how volatile Bitcoin can be, you might find yourself even worse. The only real winner here could be Kodak shareholders, who saw the company’s value jump 60% following statements this week.