Mark Cuban: How selling stamps as a kid helped me see why digital assets are the future of business

Long earlier than Mark Cuban grew to become a self-made billionaire, he was a kid rising up in Pittsburgh selling baseball cards and stamps, making an attempt to make an extra buck.

Now, remembering these days helps him perceive the subsequent era and its curiosity in digital items and digital assets like bitcoin, he stated in a blog post revealed Sunday.

“[W]hen I received to be about 15 and started going to stamp shows so as to add to my assortment, I shortly realized that there have been inefficiencies in that market,” Cuban wrote. “The same stamp was selling for different prices at multiple stamp dealers at the same show. It didn’t take me long to realize I could buy from one and sell to another.” Cuban would purchase a stamp for 50 cents and promote it an hour later for $25.

He in contrast this expertise to what has happened with Reddit WallStreetBets and its traders buying GameStop and different shares.

“Watching what has happened with Wall Street Bets reminds me of those days,” he stated of the subreddit that originally unfold the phrase about shopping for GameCease inventory, serving to spark a frenzy. “There are inefficiencies and traditions in every marketplace that have become so engrained by the power players that they literally think they are ‘rules’ that most, if not all participants will 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, turning this into a business,” Cuban wrote.

But extra not too long ago, “finding inefficiencies has followed an interesting path from purely analog when I was a kid, you had to have something, go somewhere and sell face to face or by mail, or use an intermediary like a broker, to using the internet and sites like eBay or other marketplaces to sell their physical goods.”

“Now we are seeing the next step in that evolution” with digital assets like bitcoin and shares being bought through apps or on-line and sensible contracts (the sort of contract utilized in blockchain), Cuban wrote.

“What happens when literally anything digital can be a store of value?”

Although seasoned investors and experts are concerned by the GameCease buying and selling frenzy and speculative trading, Cuban says it’s the starting of a digital shift by the subsequent era.

Cuban predicts the subsequent era will discover worth in digital assets — from any digital good, together with any creation made on-line, to totally different cryptocurrencies, like bitcoin and ether (the cryptocurrency powered by Ethereum) — which shall be simpler to keep up than bodily assets, he wrote.

To promote collectibles like stamps or playing cards, an proprietor should retailer them, maintain them in pristine situation, shield them and when selling, tackle threat when delivering them, Cuban wrote. “Because much of the industry is person to person, there are a variety of other risks and costs introduced… All of these are expensive, time consuming, risk increasing and annoying.”

But with digital items and digital marketplaces, “you have all the fun, none of those risks and the value is still set by the same laws of supply and demand,” Cuban wrote. (Of course, there are dangers related to digital items, as fintech experts point out – cryptocurrency, for instance, can be volatile.)

Crypto supporters have felt this way for a while — those that personal bitcoin say it’s a store of value that can be used to hedge against the U.S. dollar and inflation, for example. Lately, bitcoin has additionally gained assist from bigger investors, like Paul Tudor Jones and Stanley Druckenmiller; from notable financial companies, like PayPal and Fidelity; and from Square and MicroStrategy, who used their stability sheets to purchase bitcoin.

Although Cuban warns people to be cautious with cryptocurrency like bitcoin, he has invested money into crypto himself. He additionally not too long ago auctioned digital goods on-line, together with a Mavs Suns Game Day Experience video, through crypto tokens known as an NFTs, or non‑fungible tokens. (Each such NFT is exclusive and “holds the image” of the digital creation “with all allocated data associated,” in keeping with digital marketplace Mintable, which Cuban used for the public sale.)

Cuban even owns a digital “Maxi Kleber dunk Moment” card that he considers a collectible and simply as worthwhile as a bodily sport card. Although Cuban stated he would not promote his, different digital Maxi Kleber dunk units have bought for wherever from $35 to as much as $800 on the NBA Top Shot website.

“This generation knows that a smart 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 collecting stamps and baseball cards to truly understand why this is true.”

Disclosure: CNBC owns the unique off-network cable rights to “Shark Tank.”

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