Exclusive: Investor Mark Cuban Talks NFT’s and our De-Fi Future
One year into a global pandemic and just following the /r/wallstreetbets limited stock incident we are in the midst of what seems to be a perfect storm for acceleration of Crypto, NFTs, and De-Fi as a whole.
To make sense of things, I took the opportunity to have a conversation with investor Mark Cuban, long-time Crypto enthusiast, and recent champion for NFT’s (Non-Fungible Tokens).
Here is a our conversation:
Jeff Weber: It’s publicly known that you have had your eyes on Cryptocurrency and De-Fi for a while but can you tell us the story of how you ended up minting your own Crypto Art as NFT’s on Rarible?
Mark Cuban: I just wanted to learn about it. So i took a .GIF I had and went for it. But the real learning moment for me was seeing the Royalties option. That was the game changer for me to dig in. That simplifies (although not inexpensively from a fee perspective), a lot of pain points for digital creators. That is a huge game changer that opens many doors
JW: Aside from minting your own NFT, you have a growing collection of work from other artists. Do you personally select the Crypto Art you collect on your profile? What do you look for when you are selecting a piece to bid on?
MC: Most of those were transferred to me. I have bought some things, but i want to keep the why private. I don’t want everyone front running me !
JW: What advice can you give to investors in the NFT space who are looking to avoid pump and dumps and decide what is here to stay?
MC: This is early in the life cycle of NFT collectibles. Its going to be hard to pick the winners and losers. There were will be great growth, but like the analog collectibles business, there will be trends that are hard to see in advance. That said, talent is talent and great platforms, once they are able to really increase visitors and buyers will enable new ways for artists of all kinds to get paid.
JW: Right now we are seeing art marketplaces emerging using this technology as well as applications in the sports or music industry, among others. In what sectors do you see NFT offering the most value?
MC: Anything that is digital will be sold here. No exceptions. The only question is what blockchains will be used. If ETH comes through lowering costs significantly and speeding things up, i think its the favorite. If not, the door is open and there certainly a lot of blockchains competing for that business.
JW: Especially in light of recent events, many retail investors are looking for true asset ownership. How far out– if at all do you see the world adopting decentralized finance? How do you see NFTs co-evolving with De-Fi?
MC: Its here to stay. The only question is how do the economics evolve. There are now multiple generations that have grown up digital and highly value digital goods and have no problem paying for them. To own something digital to them is an advantage over owning something physical. No one wants to own a CD over an MP3. The same can apply to all things digital
As far as De-Fi there are so many pain points in traditional finance that De-Fi solves. Not all of them, but for many users its far better. Anything that requires going to a bank and talking to a human, particularly a loan is always a hassle and usually expensive. Even if you want to borrow less than you have in the bank. With the overcollateralization requirements , borrowing can happen in seconds or minutes , without all the hassles. Its friction free. It will only grow as new features and easier interfaces are added.
JW: De-Fi and NFT seem to be exploding at the moment. What big challenges do you see ahead of them?
MC: The pricing volatility of Crypto that backs it up and the transaction fees. Its crazy to have to spend $84 in ETH if you happen to mint something at a busy time.
JW: There have been articles recently that have been asserting blockchain activity is compute intensive and therefore has an unreasonable ecological cost. Especially so for the dozens of transactions involved just for single NFTs. Do you have a response to those claims?
MC: They are right. It’s an issue that needs to be addressed and solved. I don’t have the answer
JW: They say in “In a gold rush, invest in the shovel seller, not the gold digger”. So far we have seen you test the waters by minting your own NFT, can we expect to see a larger scale investment from you in the space?
MC: I have been investing for several years. Not huge, but I will be doing more . I’m not looking for the next blockchain . I’m looking for applications that simplify and replace analog features
JW: In a tweet last month you wrote that “Watching the cryptos trader, it’s EXACTLY like the internet stock bubble. EXACTLY”. With that in mind, is there any general wisdom you would like to impart on this younger generation of investors who is now in the same place you once were?
MC: I said it because there were a lot of people investing because their friends were investing. That’s typically not a good idea, although in a bull market like we are seeing now, everyone feels like a genius. My advice is always the same, do your homework. You work hard for your money. Work a little harder to make sure you understand how things work. Particularly with De-Fi, its easy to chase the highest yields , but that can backfire . it’s easy to chase the latest narrative, but you need to find out what it really means. When you do these things and actually learn about it, you can make real money. Far more than putting your money in the bank or traditional accounts. But there is risk, but if you learn it , you can minimize it.
JW: You are one the first household names to begin bringing NFTs to a mainstream audience, do you have advice for others on how to be “early” to new ideas or tech?
MC: Steve jobs said everything is a remix. Once you really dig in and put in the time to learn an area of technology, then its not hard to keep up with all the remixes that are extensions. Crypto is the same. Once you learn the general principals and basics of the tech, as new versions or updates are released its not hard to understand what it means.
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