A weird scheme to rent out Kodak-branded bitcoin mining rigs has collapsed

Matt Weinberger/Business Insider

The formerly Kodak-branded bitcoin mininig device from Spotlite, on display on Thursday, January 11, 2018 at Kodak's booth at CES in Las Vegas.

• A Kodak-branded Bitcoin-mining rig which premiered at CES will not go ahead.
• The company behind the project, Spotlite, told the BBC the scheme has has been blocked by the US financial watchdog.
• Originally the rig was marketed as a rentable Bitcoin miner, for which customers would pay $3,400 up front for a two-year deal.
• Critics were sceptical of the machines, with some dubbing them a "scam."

A weird scheme to launch a Kodak-branded bitcoin mining rig, first shown off at CES in January, has collapsed.

Spotlite, the company which licensed Kodak's brand and built the rigs, told the BBC that the scheme won't be going ahead.

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Spotlite's CEO Halston Mikail told the BBC in a phone call that the plan had been blocked by the US Securities and Exchange Commission (SEC), and that company would now operate its machines privately with kit installed in Iceland.

There are some inconsistencies between what Spotlite and Kodak told reporters at CES in January, and what the two firms are saying now.

In January a representative for Spotlite said demand for the KashMiner rigs was high, and that 80 miners were already in operation. Mikail also outlined a plan to install some rigs at Kodak's headquarters, according to media reports. But Kodak told the BBC on Monday that no devices were ever installed.

Matt Weinberger/Business Insider

Kodak handed out flyers at CES featuring the Bitcoin rig.

And at CES, Kodak's booth prominently displayed the branded Kodak KashMiner, with Kodak apparently having licensed its brand to Spotlite. But later in the week at CES, Kodak's brand was conspicuously missing from the mining rigs. And on Monday, Kodak told the BBC the rigs were never officially licensed.

Critics were highly sceptical of the KashMiner when it first launched, and some labelled the project a scam. Kodak and Spotlite originally planned to ask prospective customers to sign a two-year deal and pay $3,400 up front to rent the mining machines. Additionally, Spotlite would keep half of all currency mined by the machine.

Kodak and Spotlite claimed that people who rented the rigs would make $375 a month, resulting in $9,000 over the two-year rental period. However critics said that the companies hadn't taken into account the fact that mining Bitcoin becomes more difficult over time.

Business Insider has contacted Kodak, Mikail and the SEC for comment.