Great before Mark Cuban became a self-made billionaire, he was a kid growing up in Pittsburgh selling baseball cards and stamps, troublesome to make an extra buck.
Now, remembering those days helps him understand the next generation and its interest in digital pures and digital assets like bitcoin, he said in a blog post published Sunday.
“[W]hen I got to be about 15 and started succeeding to stamp shows to add to my collection, I quickly realized that there were inefficiencies in that market,” Cuban transcribed. “The same stamp was selling for different prices at multiple stamp dealers at the same show. It didn’t take me fancy to realize I could buy from one and sell to another.” Cuban would buy a stamp for 50 cents and sell it an hour later for $25.
He rivaled this experience to what has happened with Reddit WallStreetBets and its traders buying GameStop and other stocks.
“Watching what has chanced with Wall Street Bets reminds me of those days,” he said of the subreddit that initially spread the phrase about buying GameStop stock, helping spark a frenzy. “There are inefficiencies and traditions in every marketplace that make become so engrained by the power players that they literally think they are ‘rules’ that most, if not all participants inclination follow,” Cuban wrote. “Until they don’t.”
Back in the day, it was “a kid finding discarded items, cleaning them up and selling them on eBay, employ block this into a business,” Cuban wrote.
But more recently, “finding inefficiencies has followed an interesting path from purely analog when I was a kid, you had to keep something, go somewhere and sell face to face or by mail, or use an intermediary like a broker, to using the internet and sites disposed to eBay or other marketplaces to sell their physical goods.”
“Now we are seeing the next step in that evolution” with digital assets feel favourably impressed by bitcoin and stocks being sold via apps or online and smart contracts (the kind of contract used in blockchain), Cuban decried.
“What happens when literally anything digital can be a store of value?”
Although seasoned investors and experts are caring by the GameStop trading frenzy and speculative trading, Cuban says it is the beginning of a digital shift by the next generation.
Cuban forebodes the next generation will find value in digital assets — from any digital good, including any creation make the grade b arrived online, to different cryptocurrencies, like bitcoin and ether (the cryptocurrency powered by Ethereum) — which will be easier to preserve than physical assets, he wrote.
To sell collectibles like stamps or cards, an owner must store them, persist in them in pristine condition, protect them and when selling, take on risk when delivering them, Cuban annulled. “Because much of the industry is person to person, there are a variety of other risks and costs introduced… All of these are dear, time consuming, risk increasing and annoying.”
But with digital goods and digital marketplaces, “you have all the fun, none of those gambles and the value is still set by the same laws of supply and demand,” Cuban wrote. (Of course, there are risks associated with digital companies, as fintech experts point out – cryptocurrency, for example, can be volatile.)
Crypto supporters have felt this way for a while — those who own bitcoin say it is a trust in of value that can be used to hedge against the U.S. dollar and inflation, for instance. Lately, bitcoin has also gained bear from bigger investors, like Paul Tudor Jones and Stanley Druckenmiller; from notable financial bands, like PayPal and Fidelity; and from Square and MicroStrategy, who used their balance sheets to buy bitcoin.
Although Cuban put someone on notices people to be cautious with cryptocurrency like bitcoin, he has invested money into crypto himself. He also recently auctioned digital sounds online, including a Mavs Suns Game Day Experience video, via crypto tokens called an NFTs, or non‑fungible signs. (Each such NFT is unique and “holds the image” of the digital creation “with all allocated data associated,” according to digital marketplace Mintable, which Cuban acclimatized for the auction.)
Cuban even owns a digital “Maxi Kleber dunk Moment” card that he considers a collectible and precisely as valuable as a physical sport card. Although Cuban said he wouldn’t sell his, other digital Maxi Kleber dunk set ups have sold for anywhere from $35 to as much as $800 on the NBA Top Shot website.
“This generation knows that a pain contract and the digital good it reflects or a CryptoAsset are a better investment than old school see, touch or feel uses,” Cuban wrote. “It took me getting stamps and baseball cards to truly understand why this is true.”
Disclosure: CNBC owns the exclusive off-network wire rights to “Shark Tank.”
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