Kodak, once a leader in pre-digital photography, saw its popularity and customer base dwindling with the arrival of new technologies. Ever since, the company has found it challenging to regain its former place. It appears that Kodak’s attempts to enter the world of crypto are facing further hurdles.
After the introduction of Kodakcoin, the company’s latest foray into the cryptocurrency industry ended once again in utter failure as a partner selling a hardware mining service with its branding scrapped its project.
Known as the Kodak KashMiner, it was a simple ASIC acquired by Spotlite USA to mine Bitcoin. The company would offer to rent these devices and provide its own cheap electricity to start hashing.
Kodak said to the BBC that it didn’t license the product in any official capacity, but our own research shows that Spotlite is a “brand license” for Kodak LED Lighting, an attempt by Kodak to shift its focus from analog film to cheap LED light bulbs.
Looking at the miner
Offering to rent hashing power for a fee with an in-house power generating operation seems like a loosely acceptable business model until we look at the fee structure itself.
If Spotlite’s plan had come through, it would have charged over $3,000 up front to rent the miner, allowing customers to keep only a part of the Bitcoin that the device would have earned.
That sounds a bit sketchy, but things get more complicated when we look at the Kodak KashMiner itself. The image provided by the BBC from CES 2018 showed what looks to us much like a Bitmain Antminer T9+, a model that costs $373 (with its own power supply) and provides 10.5 terahashes per second, due to start shipping on July 21.
The only noticeable difference between the two is the Kodak KashMiner branding slapped onto the devices.
Spotlite said that they had 80 devices running already and promised that the up-front $3,400 investment would yield $375 per month in earnings over the two-year rental period.
Crunching the numbers
Let’s look at those numbers for a second and see what you’d earn with an Antminer T9+.
We’ll be generous and say that one would already have a power supply laying around somewhere and would choose to buy the cheaper model without the PSU. That’s $283 up front.
Now, let’s run it for 2 years non-stop in your own mining pool.
The T9+ consumes a nominal 1432 watts and we can expect a monthly turnout of 0.0152952 BTC, which is about $102.
If we presume that you’ve somehow discovered a way to generate free energy without having to pay a single dime for maintaining the power generator. You are still left with $102, not $375.
In a more realistic scenario, the cheapest you can expect to pay for electricity is usually around five or six cents per kilowatt-hour. So, even in the most generous of circumstances, you can only expect profits of $51.32 per month with current Bitcoin prices.
We’re still not looking at the mining pool fee. With a low fee of one percent, the number goes down to $50.29 per month.
If Bitcoin’s price goes up into the hundreds of thousands of dollars, we can expect this to be massively profitable at some point. At this very moment, however, Spotlite’s promise of $375 is unsustainable.
The only scenario in which such a thing would be realistic is if you’d be renting a large number of devices for the $3,400 fee. This would also mean that you keep a high proportion of the profits that come out of this whole ordeal.
This article appeared first on Cryptovest
