Mark Cuban: "ETH Has an Advantage Over BTC as a Store of Value"
Cuban talks about why he's bullish on DeFi in this week's Defiant podcast.
In this week’s Defiant podcast episode, I speak with Mark Cuban, Dallas Mavericks owner, billionaire investor and Shark Tank star —and Defiant subscriber :)
It’s been hard to pin down if Cuban is a crypto skeptic or believer. He has questioned the value of bitcoin and called its price surges a bubble, but he has also accepted crypto payments for his basketball team, and tweeted about using Aave and selling NFTs. You’ll have no doubt after listening to this interview where he stands: Cuban is a crypto bull, but more specifically a DeFi and Ethereum bull.
He says his general stance hasn’t really changed; he still believes bitcoin can’t be used as currency, but thinks its underlying narrative has strengthened, to become powerful enough to support it as a store of value.
But what he’s really excited about is smart contracts, which are allowing developers to make any decentralized application they can dream of, sparking innovation and compounding network effects, and most importantly, laying the foundation for what he calls “friction-free banking.”
Because most of this innovation is happening on Ethereum, he believes ETH is becoming a better story of value than BTC.
We talk about NFTs and how he believes they’ll be a game-changer, predicting digital collectibles will overtake the physical collectibles market. We also talk about DAOs, and he muses how much better Wall Street Bets would be if it was a blockchain-based forum where users could pool their tokens and invest together.
Cuban also goes over his takeaways after using DeFi dapps like Aave, and talks a bit about his portfolio, which right now holds more Bitcoin than Ether. But that may change. He says when there are pullbacks, he’s buying more ETH, not BTC.
The podcast was led by Camila Russo, and edited by Alp Gasimov.
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CR: Mark has made waves recently in DeFi. He's been tweeting about using Aave and buying and selling NFTs. So that's really cool to hear. And I'm really excited to talk about all that stuff with him. But first, let's go back in time a bit and just tell me about your crypto journey. Like what first got you interested in crypto and Bitcoin? And what was kind of your first reaction to this?
MC: So, I'll go back to the beginning. When Coinbase first came out, you know, I like to play with technology, I'm a tech geek and have been for a long time. And so I tried it, some people sent me some Bitcoin because it was dirt cheap back then and wanted me to see it. But the conversation back then was mostly about it becoming a currency. And that's why they're called cryptocurrency, which is really a misnomer, right, because very few of them if any of them are actually currencies.
“I like to play with technology, I'm a tech geek and have been for a long time. And so I tried it, some people sent me some Bitcoin because it was dirt cheap back then and wanted me to see it.”
And so as somebody who had written software, and I did a lot with distributed databases, my very first company, we were a systems integrator. So I would write multi-user applications, distributed applications. And then I sold my company to CompuServe, which had a worldwide network that VISA was on and I did a lot of business with Lotus Notes, which had replication servers. And so I really had an understanding, not as much as some people, but what I felt was a strong understanding of distributed databases and decentralized databases.
And so I was all in on blockchain. But like any other new programming language or platform or anything, there was a long ways to go before blockchain was really going to be ubiquitous. But even back in the beginning, I remember getting into arguments with people by Southwest back then. I was all in on blockchain, but the argument on Bitcoin in particular was always it was going to be a currency. And over the next five years, I was certainly a naysayer. And to this day, I'm not a believer that Bitcoin will become a currency. And most bitcoiners aren't even saying it's a currency anymore. And when they had the split in 2017, that kind of confirmed right, you're not going to do it. And I've listened to all the talk about lightning over the years, and how that was going to change everything, and it just hasn't.
“I was all in on blockchain, but the argument on Bitcoin in particular was always it was going to be a currency. And over the next five years, I was certainly a naysayer. And to this day, I'm not a believer that Bitcoin will become a currency.”
So long story short, what really started to change was even after 2017, and the big price movements, over the last year or so, you've seen people, maybe two years only start to refer to Bitcoin as a store of value. Nobody's really talking up the whole currency thing any longer. At the Dallas Mavericks, we started taking Bitcoin for tickets and other purchases back in, I think, 2015. And I think, ever since then, we've sold maybe $300 worth.And I did it because I wanted to see if people would actually use it as a currency.
And back then, some people tried. You had people going across the country trying to live off a Bitcoin and all that. But now people are like, no, I'm not going to spend my Bitcoin as a currency, I want to see it appreciate. So what really changed was one, watching people change their mind about it being a currency, and start recognizing that it's only a store of value; and two, starting to see the maturation of blockchain apps, particularly on Ethereum; and then three, this past summer, watching on DeFi go nuts.
“So what really changed was one, watching people change their mind about it being a currency, and start recognizing that it's only a store of value; and two, starting to see the maturation of blockchain apps, particularly on Ethereum; and then three, this past summer, watching on DeFi go nuts.”
So for me DeFi, I really was okay now, blockchain in particular, is really starting to mature. You're starting to see applications that are really coming into play. You're starting to see NFT. And it's not so much just about how much is sold and market value, but more just that people are becoming more comfortable with it. And so we're starting to see these applications that are just popping up left and right.
And it reminded me so much of the early days of the internet, where the mid-90s people started talking about internet applications, but the internet had been around for 10 years, right? But it was mostly in universities. And so it was very analogous to what's going on with blockchain. You had early adopter applications. You had banks and private organizations trying to use blockchain. You had people trying to come up with new ways to use it. And then bam, smart contracts came along, and it just blew up. And Bitcoin no longer was all about, well, it's going to be a currency and people would argue about the block size and all that shit, right? It was more now, okay, what can smart contracts do?
And now that people have come up with these ideas, and people are starting to put money into it, you're really starting to see it. So that's what's got me really excited lately. That was a lot longer answer than you expected. Right?
CR: No, I love it. Because you touched on a lot of other topics that I wanted to bring up in this interview. Because I think it's kind of hard to pin you down because you present yourself sometimes as a Bitcoin and crypto skeptic and sometimes as a crypto bull. And I think now you've kind of explained why that happens.
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