
Kodak’s Dubious Blockchain Gamble - IntronExon
https://www.nytimes.com/2018/01/30/technology/kodak-blockchain-bitcoin.html?rref=collection%2Fsectioncollection%2Ftechnology&action=click&contentCollection=technology&region=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
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TaylorGood
The real gamble was Kodak offering their namesake in a token project for "no
direct revenue from the public offering... receive a minority stake in WENN
Digital, 3 percent of all KodakCoins issued and a royalty on future revenue."

Minority ownership in a random company owned by a former fraudster and 3% of
the tokens with their own name on it? So many things wrong with this. Where is
the secret deal that made this happen? Did the Kodak CEO get 40% of the tokens
in his personal wallet? For a multi-decade, legacy brand to entrust that guy
with their future is rather bizarre. If this fails, it is quite possibly the
last nail for Kodak..

~~~
patcheudor
>If this fails, it is quite possibly the last nail for Kodak..

The equivalent of the founder taking all the remaining company funds to Vegas
and betting it all on black.

~~~
ergothus
Were you referring to FedEx, or just pointing out the riskiness?
[https://www.huffingtonpost.com/2012/10/15/fred-smith-
blackja...](https://www.huffingtonpost.com/2012/10/15/fred-smith-blackjack-
fedex_n_1966837.html)

~~~
mstade
Wow, that is one heck of a story! As a business owner, some things come to
mind:

\- How do you explain (to the tax man, really) where the money comes from?

\- Isn't this a gross misappropriation of company funds, and very much
illegal?

\- How does this guy find pants to fit his enormous balls?

~~~
chx
The company got an investment from his personal funds. If you are asking about
where he as a person got money, Vegas is legal and likely gives tax receipts.

He took a loan from the company; if he couldn't pay it back then yeah he is in
deep trouble but he could.

~~~
mstade
Wait, so which was it – he used $5000 of his own money or the company's?

I'm surprised loaning money from the company is legal in the U.S., it's
certainly not here. Probably because then you can fairly easily create a tax
evasion scheme where you never pay yourself a salary and just keep borrowing
money at zero interest and payment due long about five years after the sun
explodes...

~~~
fyfy18
I don’t know where “here” is, but in the U.K. it’s perfectly legal. You can
even give yourself (as a director) an interest free loan.

However if the amount owed is greater than ~£10k(?) at the end of the
corporate tax year, you need to pay it back within 9 months or it’s treated as
income and taxed accordingly (there’s also regulations about paying it off
before the end of the corporate tax year and taking out directly after). Still
21 months for an interest free loan isn’t bad...

------
stickfigure
Also covered by Matt Levine in today's Money Stuff, with his trademark
hilarity:

[https://www.bloomberg.com/view/articles/2018-01-30/iss-
tells...](https://www.bloomberg.com/view/articles/2018-01-30/iss-tells-
investors-how-they-want-to-vote)

(search down for 'Kodak')

It's sad how far the brand has fallen.

~~~
jpatokal
This pretty much sums it up:

 _The point is to build new decentralized protocols that will not be owned by
any one central company, but will instead be the property of all of their
users, who will fund their development by buying coins and who will then be
rewarded by the increasing value and usefulness of those coins. This is not
that. This is more like: WENN Digital will manage a centralized database of
photo rights, and someone will stand off to the side shouting "blockchain!"
occasionally when it seems like people's attention is drifting._

Also, that chart in the NYT with all the Kodak-colored little boxes and arrows
is buzzword comedy gold. Blockchain leads to Tensorflow because _why not_!

~~~
paganel
The first part about institutional investors deciding which company gets to be
part of a market index and which not (thus defeating the purpose of “index
following”) is also very interesting. But for now everyone is happy that the
“tide is lifting all boats”, that the “fundamentals are healthy” and all that,
even though to me it looks sketchy as hell and reminds me of how the rating
agencies were doctoring their ratings pre-2008, for “the good of their
clients”.

------
johnpowell
I know this is probably not the best place for this. But I am a bit tipsy and
want to type.

I was janitor at KEZI (a ABC affiliate in Eugene Oregon) and gave up and went
homeless for a bit. My sister got me a room with her friend for a few months
while I found a job in Portland. I had to find a job.

I had about 80 in cash so I had to cover job hunting and food with that. Not a
easy task. So I stole a paper from a neighbor to look at the job listings.
Great.. A temp listing and only a three miles away. So I can walk there. Fuck
paying 2.50 for the bus.. That is two totinos.

So I am waiting after filling out a application. They basically have you sit
there all day and call you if "day labor" is needed. "Labor Ready" if I
remember correctly.

So I go out for some air and outside there is a weekly employment thing. I
flip through and there is a promising ad. It is on 21st and Holgate near Reed
College.. Way to far to walk. So fuck it.. I will risk the 2.50 to take the
bus there and hope for the best. In my mind I was thinking job I will probably
not get or 24 packets of ramen.

The job was at Qualex. Basically Kodak. We did all the film possessing in
Oregon. And yes.. I got hired.

I worked in the digital room. Which was basically turning digital images
upright and burning CD's. Processing thousands of images a shift. Calling the
police when we hit kiddie porn, processing the images from murder scenes. The
cops used us. So many suicide photos. They did not prepare us for this. Yes,
suicide with a shotgun is possible. That was my Monday.

I was fired because of 9/11\. I went to work on 9/11 and there was a note on
the time machine spouting shit about "respect" and "mourning" and that we
didn't need to come in. Which is bullshit. We didn't need to come in since
nobody wanted film developed that day. And a call letting me know before I
spent 90 minutes on the bus would have been fab.

So the next day it was all cool and during lunch I bitched. Shocker. After I
said they didn't have us work because there was no work my card I used to
clock in stopped working.

~~~
isoprophlex
That sounds rough. I hope your employment conditions are more stable these
days...

------
Apocryphon
As a potentially marketable concept (if not necessarily an actually useful
product), blockchain for visual data might not be such a bad idea. With the
recent advent of AI-modified videos such as deepfakes, blockchain validation
has been brought up as a solution to prove the authenticity of videos.

[https://www.metafilter.com/172026/AI-Generated-Fake-
Revenge-...](https://www.metafilter.com/172026/AI-Generated-Fake-Revenge-Porn-
is-Becoming-Increasingly-Easy-to-Do#7302200)

Forget copyrights, market this as a way to address Fake News.

~~~
tCfD
What's the long term value of paying for highly redundant, (yet highly
gameable) custodial tracking of a piece of digital media when a dozen
competing blockchains can be flooded by a hundred perfectly identical looking
fakes made by altering a single bit in a single pixel, to generate a new hash
and merkle root? Will enough people care that they don't have a signed
original pepekitty by banksy when essentially perfect fake copies can still be
made and distributed? Blockchain does nothing to solve this

~~~
Apocryphon
I think you're missing my point. The original concept framed by Kodak was
protecting IP, so that freelance photographers or whomever (likely large
corporations) don't have their pictures re-used. But I'm saying that
blockchain watermarking could have greater immediate appeal to the public when
it's reputations and lives on the line. So journalism organizations and media
corporations end up buying watermark protected hardware to ensure the veracity
of content.

~~~
duskwuff
But what value does "blockchain" add here? What is so special about photo
watermarking that makes a traditional database unsuitable to the purpose?

If anything, the transaction rate limits of current blockchain technology seem
like they'd be hugely limiting for this application...

~~~
syntaticSugar
I guess you could say that the fact it's using a block chain, any form of
processing the transfer of ip/rights of the hash desired, can be out sourced.
Bitpay, meta mask,. Etc

Side note I see no reason to use pow for this application, pos seams like a
more appropriate security tradeoff

------
programmarchy
Putting proof of ownership of a photo on the blockchain is an interesting
idea, but I don't understand the economics.

Artists pay Kodak to register their image with the blockchain, and Kodak has a
mechanism to crawl the web to find images violating this blockchain
registration.

Okay, great, but why would anyone want to mine their blockchain?

~~~
jethro_tell
It's not a bad idea but they got blockchain mixed up in it. Would have been
better if they had just built a low cost subscription service with some
embedding in the image a crawler and the weight of a corporate lawyer for
enforcement. That's a service that a one person pro photog may be willing to
pay for.

~~~
sib
That service actually exists and has for many years (e.g., Pixsy
[https://www.pixsy.com](https://www.pixsy.com), DigiMarc
[https://www.digimarc.com/solutions/photography](https://www.digimarc.com/solutions/photography)).

It just didn't involve the term, "Blockchain" :)

~~~
jethro_tell
well, by the many years part I would assume it's not a bad idea then and
there's no value add from the blockchain so guess they are late to that party
as well.

Kodak finally decides they aren't going to be late for once and this is what
they choose to get in on. Classic

------
mv4
I wish Kodak had started with a clean slate, instead of recycling WENN
Digital's failed coin attempt:

[https://www.sec.gov/Archives/edgar/data/1515139/000149315218...](https://www.sec.gov/Archives/edgar/data/1515139/000149315218000017/form8-k.htm)

[https://arstechnica.com/tech-policy/2018/01/kodak-
apparently...](https://arstechnica.com/tech-policy/2018/01/kodak-apparently-
re-branded-a-paparazzi-licensing-platform-as-kodak-coin/)

~~~
mannykannot
I get the impression that WENN pitched the idea to Kodak, which has been
looking for straws to grasp for quite a while.

------
yitchelle
The following truly describes the hype, the bubble, or the snake oily aspect
of it. Investor beware!

"As investors seek to capitalize on the popularity of currencies like Bitcoin
and Ethereum, a number of struggling companies have reversed their fortunes,
at least temporarily, simply by adding “blockchain” to their names or
announcing a new cryptocurrency venture unrelated to their previous line of
work. (The most notorious example is Long Island Iced Tea Corp., a beverage
company that tripled its value overnight after it rebranded itself “Long
Blockchain Corp.”)"

------
jatsign
After some googling I found a SV company that already does everything Kodak
wants to do. Not saying there can't be competition, but storing data on the
blockchain just isn't that hard...

[https://www.binded.com](https://www.binded.com)

------
Relys
“I would not be sleeping very well if I was involved in this,” said Jill
Carlson, a blockchain consultant.

~~~
roywiggins
Blockchain consultant sounds like a fun job, though probably the only advice
I'd be able to give as one would be that same quote over and over.

~~~
pyromine
My roommate does PR consulting in the cyrpto space, I've never heard more
bullshit come out of one person's mouth. Seems like 3 months after each
project he's talking about how bs that on was, but this new project is super
legit.

------
ExactoKnight
Lately I've been having a hard time telling the difference between "unique
hash id" and UUID's.

If all your blockchain is, is something akin to a decentralized database using
UUID's, then you don't need a blockchain.

------
gt_
While I’m not going out and buying any KodakCoin, this does sound like an
excuse to load up on Tri-X 400.

~~~
bradfa
Tri-X is sold by Kodak Alaris now, not Eastman Kodak, although I'm not sure
who actually manufactures it:

[http://imaging.kodakalaris.com/professional-
photographers/ph...](http://imaging.kodakalaris.com/professional-
photographers/photographers/professional-films)

Kodak Alaris and Eastman Kodak are separate companies.

Disclosure: I'm employed by Kodak Alaris.

~~~
toomanybeersies
Is the new Ektachrome that's being released by Kodak being released by Kodak
Alaris or Eastman Kodak?

~~~
bradfa
Ektachrome still photography film is a Kodak Alaris product. Kodak Alaris
announced its return at CES in 2017:

[https://www.kodakalaris.com/en-gb/about/press-
releases/2016/...](https://www.kodakalaris.com/en-gb/about/press-
releases/2016/kodak-alaris-reintroduces-iconic-ektachrome-still-film)

Eastman Kodak is also, as per that press release, going to bring Ektachrome
movie film to market for their Super 8 camera.

------
pwaai
fuck...I just loaded up on KODK March put options....

if I don't post on HN for a while....you know why

~~~
nwsm
you bought KODK options and didn't know about this?

~~~
mikestew
Parent said puts, and (assuming they _bought_ puts) that means they think the
price will down. Which is why I’m confused by the post: you won’t be posting
on HN because...you’ll be busy rolling in a bathtub of money in March?

If parent _sold_ puts, well, maybe they should stick to S&P index funds.

------
CryptoPunk
I think we have a shortage of risk-taking in the corporate world, especially
when the gamble has an obvious profit-seeking motive, and I think that's
unfortunate.

Whatever happens, a lot will be learned from this initiative.

------
mikestew
Perhaps this story is why Kodak is down 15% this morning, and trading halted
at one point? Can’t find any news about it, other than Kodak hit a circuit
breaker.

Those April puts I bought are looking better every day.

------
intrasight
As a "son of Kodak" this is just too depressing.

------
digi_owl
I must admit, seeing this title gets me thinking about one of Cory Doctorow's
books...

------
TZimberoff
Blockchain, as well as providing an effective means to track the publication
history (i.e., licensing) of any given photograph, also provides a less
obvious benefit to counter a more insidious problem faced by photographers:
detecting when an original photograph has been modified by Photoshop and, only
then, infringed. Blockchain can provide unimpeachable evidence of its
provenance by its creator.

Nevertheless, despite what Kodak's CEO naively implied, infringement is NOT a
photographer’s greatest problem. I can state that fact authoritatively, with
decades of experience in the Commercial Photo marketplace, including behind
the camera, with both empirical experience and having executed the most
extensive customer development exercise ever seen in this industry.

Blockchain (in photography) is a FEATURE, not a business. But for the sake of
argument, let’s say that it IS the major problem. In that case, if you are a
photographer who has discovered your copyrighted photograph has been infringed
(whether you found out via blockchain or another already-in-use technology),
how do you expect to get paid, to be made whole? Do you suppose the process
will be any easier, or different, just because of blockchain? Isn't that
Kodak's rationale for its foray into blockchain?

An infringer, once discovered, will most likely ignore your payment demands,
irrespective of whether or not you can prove copyright ownership. (Copyright
ownership is implicit , anyway.) You have little or no legal recourse because
it costs too much for most photographers to hire a lawyer to sue the
infringer. The only way a lawyer will take your case on a contingency basis is
if you have already filed a FEDERAL COPYRIGHT REGISTRATION. Registration is
the key to the courtroom. It mandates a $150,000 statutory fee — i.e., backed
by federal law — for each infringement of each individual use of a photograph.
Now, that's a deterrent!

There is nothing in Kodak’s or anyone else’s blockchain business model to
account for getting paid by copyright infringers. Moreover, no wannabe player
in this game has put forth a business model that will attract PROFESSIONAL
photographers to contribute their content to the stock photo pipeline in the
first place.

How do I define "professional" you ask, and why is that important? Simple: any
photographer who has already been trusted & hired by major brands & media
companies to shoot commissioned jobs. That excludes about 99% of every
contributor to the stock photo pipeline. But pros are the photographers from
whom buyers want to license content because, right now, they complain that
content sources are stale, bloated, and overused. (That's a whole 'nother
topic.)

But there is a BIGGER reason why blockchain is a dead end — AS A BUSINESS, not
a feature — specifically in photography. As it represents a “distributed”
model, blockchain antithetical to the idea of a centralized source of curated
content — the very kind of content Enterprise buyers demand. From the
contributing photographer's pint of view, it gives them no individual market
reach; no connection with customers. As for allowing photographers to set
their own prices . . . HA! That IS their biggest problem. They have no idea
how to do it. Blockchain may work in a consumer-retail marketplace, but not
Enterprise. And Enterprise is the larger segment in Commercial Photo, albeit
grossly underserved.

By "Enterprise" I specifically exclude the market currently served by Getty
Images, Shutterstock, and Adobe Stock et al., which is comprised of
shopkeepers, freelancers, and startups, all looking for cheap pictures to fill
up their Web sites. But if your are one of that ilk of photo vendors, your
business model is pile 'em high and sell 'em cheap. That means you have to
sell the same picture over and over again at radically low prices to MANY
DIFFERENT BUYERS to hit your revenue projections. But that's bad for buyers
with a brand identity to protect. (There are a number of other, equally
important reasons.)

