Why Staying Away From Kodak’s Bitcoin Scheme is a Wise Decision

In recent times, we have seen that everyone wants to to jump on the cryptocurrency bandwagon, from individuals to large scale companies. One such company is Kodak, the once-iconic camera company made irrelevant due to modern technology. The company claims to be “all-in” on cryptocurrencies, and have announced a two-point crypto strategy. The first strategy involves Kodak introducing Kodakcoin, a form of digital currency aimed to protect photographers’ image rights. The second strategy, called KashMiner, involves the company renting out equipment to people who could use it for money generation.

While a lot of analysts and experts are supportive of the first strategy, they are warning people not to pay heed to the second strategy. Calling it as a scam, they feel that the scheme leads more credence to the fact that the cryptocurrency bubble is close to popping and crashing.

The KashMiner scheme involves the customer paying the Kodak a sum of $3,400 as upfront money to purchase a mining rig. Spotlite, the sub-brand licensing the Kodak name for the venture, will cover maintenance costs and will take a 50% share of all profits generated through the rig. They estimate that one can earn $375 per month by mining bitcoin at current market rates.

But the last line is where their plot falls apart. Bitcoin mining is based on the fact that it would be even more difficult as more time passes. So, one can confidently say that the rate of Bitcoin production through these machines would go down significantly over the years, which would mean their profit generation potential would reduce. While the price of Bitcoin may rise to cover the shortfall, it is speculative, with no guarantee that it would be enough to even recover the invested money.

Taking even the most optimistic estimates, the analysts are coming to a total profit of $2,457 generated by the rig. The amount is way less than the money the company claims the profit would be. According to Kodak, the profit in the machine would be around $5,600, which would be after deducting the investment cost out of the total $9000 of revenue.

Considering how volatile Bitcoin can be, one can either go boom or bust with their money with this scheme, with a much greater probability of facing the latter scenario. The only winners here seem to be Kodak and their shareholders, who saw their stock-holdings soar more than 60% following these blockchain related announcements.


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