We often see a whiff of desperation in old economy companies trying to reinvent themselves as blockchain or crypto companies. For example, according to Krebs On Security, RadioShack relaunched as an online brand in 2020 and “now says it plans to chart a future as a cryptocurrency exchange” by helping old-school clients feel comfortable speculating in cryptocurrency. We know that a few years ago, photo giant Kodak, whose core product has been replaced by ubiquitous digital cameras on smartphones, announced its move to a cryptocurrency called KodakCoin and Kodak KashMiner that quickly and temporarily boosted Kodak’s stock price by 60%. The New York Times reported at the time, “Almost immediately, critics pounced on the company’s plans, calling it a desperate cash grab.” Kodak quickly abandoned its coin and digital mining efforts and now claims to be a pharmaceutical company. Who’s Next, Blockbuster As NFT Manufacturer?
No, the latest surprising news is Norton Security as a cryptocurrency miner. Not that Norton Security is an old economy company, but it is a relatively inert security company offering a two-decade-old product that looks less relevant now than it used to be. In the age of the Internet, software companies from the 1990s might be considered “old economy”.
Norton Security has started offering the “Norton Crypto” tool as part of the popular yellow-brand LifeLock security software for home and work computers. Norton Crypto allows customers to pay for cryptocurrency mining while their computers are idle. When the tool runs, Norton combines all of its customers’ mining capabilities into a pool of computing power that mines Ethereum and then breaks the mined coin’s value into pieces and deposits a small percentage into a Norton digital wallet located in the cloud for each participating customer. Norton skips a 15% active service fee before allocating any value to customers. Norton claims to offer this tool as a way to help customers improve security by providing reliable mining tools and avoiding “unverified code on their devices that could potentially take profit or even plant ransomware.”
Despite some public accusations to the contrary, Norton does not automatically launch Norton Crypto when you sign up for the LifeLock security program. You will need to run the tool if you want to use it. However, it seems very difficult to uninstall Norton Crypto from your computer and it is automatically installed in new LifeLock instances.
The Verge debunked the worst fear myths about Norton’s move to computer use and electricity bills for its customers to mine cryptocurrency, but they were concerned about Norton’s high fees. They wrote that Norton’s 15% fee was significantly higher than most crypto-mining pools, noting that “pool operators often take a cut or fee to bring everyone together. However, the fee is usually closer to 1 or 2 percent, And of course, there’s the elephant in the room: anyone using Norton Lee has already paid the company a subscription fee for its security software… In real numbers, a night of mining on an RTX 3060 Ti netted 0.66 cents worth of Ethereum And it costs $0.66 in off-peak electricity. Norton took all the profits.” Before you can use the cryptocurrency you just mined, you’ll need to transfer it from your Norton wallet to your Coinbase account, bearing the gas fees charged by the Ethereum network.
The fees are likely to eat up your earnings and possibly more. Is this the kind of audacity that Matt Damon has us embracing in his pro-crypto-investment TV ads? No, but getting more people into Ethereum mining increases the pool of investors who have already invested, so the outcome is positive for people who are hype about cryptocurrency (like those who pay Damon to make a fuss of them). Not so much for others. Winklevoss brothers win; We lose.
Why does this strategy make sense for Norton, a security software company? Despite the dubious claim that Norton Crypto is a security focused product, Norton may simply offer this product to open up new revenue streams for the company. Norton has undoubtedly noticed troubling trends with its traditional product line; All companies in the antivirus industry could be hit soon if they aren’t already. After 20 years of ascendancy, the standalone antivirus industry could become obsolete within a few years. As with many important tools, antivirus shields are now integrated into the operating systems of our devices, so Apple, Google, and Microsoft will provide acceptable virus protection for most PC purchases.
As he succinctly stated in Vice three years ago, “With the rise of security-focused operating systems like iOS and even Windows 10, there is a growing group of experts who think, perhaps, the best days of antivirus software are behind us. People may not need it so much anymore, And in some advanced cases, it can pose some risks to users.” Norton may react to the late-life cycle situation of its flagship product by forcing crypto mining to shrink its customer base while the base remains large, resilient and future-proof. Perhaps this is a reasonable play for a formerly up-and-coming company in desperate need of a second act.
Norton is now in the Ethereum mining business and wants to share your PC. Could MacAfee or Kaspersky’s Viral NFT Trading Cards Be Too Late?