Billionaire Mark Cuban is weighing in on what he believes is the true value and function of each sector within the cryptocurrency realm.
In a new interview with the Scott Hilton YouTube channel, the entrepreneur says that while Bitcoin will always function as a store of value, he disagrees with maximalists who view BTC as the be-all, end-all digital asset.
“The Bitcoin maxis are the people who think that Bitcoin’s just going to own the world and change the world to be the ultimate currency. It’s not.
Bitcoin really is a great store of value because it’s easier to trade than gold, easier to break up into smaller pieces than gold to share with people. It’s easier to store, you can just take the digital file and put it on a card.
Store of value is one thing that applies primarily to Bitcoin.”
The Shark Tank investor next discusses the two main categories of crypto tokens and how the more speculative tokens compare to over-the-counter (OTC) stocks.
“There are two types of tokens. Tokens that have a utility and tokens that they call ‘shitcoins’ that are just there to be traded. They’re just speculation opportunities, just like OTC stocks.
When most people think of stocks they think of the Nasdaq or the New York Stock Exchange… But there are these things called pink sheets and bulletin boards and OTC stocks where there are thousands of companies with no audited financials, where stocks trade for pennies and who-knows-what price, and trillions of shares trade with nothing.
They are the stock equivalent of some [crypto] tokens.”
“Finally there’s the tokens that have utility like Ethereum. They have these things called smart contracts and they allow you to trade different things, whether it’s NFTs [non-fungible tokens], insurance contracts on Ethereum, there’s just a variety of things.
NFTs are one version of the applications, and we’re starting to see others [like] textbooks turned into NFTS. Music, songs, movies turned into NFTs. Anything digital can use a smart contract to become an NFT.
That’s where the real upside is.”
Earlier this week, internet sleuths revealed the contents of Cuban’s Ethereum wallet. In addition to holding quantities of ETH and a variety of other altcoins, the billionaire also owns a significant amount of Circle’s US Dollar Coin (USDC) stablecoin.
Regarding the function of stablecoins Cuban says,
“Stablecoins are kind of like the currency of the crypto world. There are two kinds of stablecoins. One is pegged to the dollar and the most common type is USDC.
For every USDC dollar that is a token in somebody’s crypto wallet, there is a real US dollar in a bank account in their treasury that matches up to that. So that’s relatively safe.
The second kind is algorithmic and that’s where some of the games are played where rather than it being dollar for dollar to each coin, there are algorithms created where they try to emulate certain things.
Those are riskier and… That’s why I think they’re going to be regulated. I don’t think that’s a bad thing.”
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Featured Image: Shutterstock/Alberto Andrei Rosu/monkographic