Despite the fact that the downfall of one of the top cryptocurrency exchanges in the world has left many investors scared, billionaire Mark Cuban is still bullish on crypto.
According to a tweet from November 13, Cuban noted that he has stayed involved in cryptocurrency since “smart contracts” are one of the major underlying technologies that enable cryptocurrency transactions.
A smart contract is essentially just a piece of code that is stored within the blockchain. The logic behind them is based on “if/then” statements: if condition X is met, carry out action Y.
Consider a vending machine as a simplified metaphor for a smart contract. Select what you want, put in the appropriate amount of money, and take your purchase home. After a user makes a purchase, the “smart contract” in the machine will distribute the purchased good.
Cuban thinks that smart contracts will have a major impact on the development of useful apps for everyone.
Cuban opines on Twitter that a token’s worth is contingent on the use of the services it enables.
But what’s still missing is an app that has broad appeal, both inside and beyond the crypto community, so that more people are motivated to understand how to use cryptocurrencies so that they can utilize the app.
There are still drawbacks associated with cryptocurrency
Despite the fact that Cuban is optimistic about cryptocurrencies, he has some harsh words for the former CEO of FTX, Sam Bankman-Fried.
Cuban revealed this while he was speaking at a conference hosted by the Sports Business Journal on November 11. “With FTX now — that’s somebody operating a firm that’s simply dumb as f—- greedy,” Cuban remarked.
It is anticipated that the collapse of FTX would have repercussions throughout the cryptocurrency sector. As a result of the repercussions, one of the leading cryptocurrency venture capital firms, Multicoin Capital, which has assets connected to FTX, has informed investors that it anticipates a large number of trading firms would be ripped out and shuts down in the coming weeks.
According to a recent tweet from Cuban, he does not consider the current events that have been shaking up the cryptocurrency industry to be “crypto blowups,” but rather “banking blowups.” This involves providing financial assistance to an unsuitable organization.
Cuban has been involved in the cryptocurrency market for a long time. Over the course of his career, he has made investments in Ethereum in addition to a wide variety of other digital coins, NFTs, and blockchain startups.
In point of fact, during an episode of the podcast titled “The Problem With Jon Stewart” that was released on January 12, he stated that “80% of the investments that I end up making that are not on ‘Shark Tank’ are related to cryptocurrencies.”
However, many people in the finance industry caution against putting too much money into cryptocurrencies. James Royal, the chief writer at Bankrate, told CNBC Make It that cryptocurrencies are the epitome of a confidence game. “Cryptocurrencies are a confidence game par excellence,” he said.
According to Royal, “with the exception of so-called stablecoins, the prices of cryptocurrencies are supported purely by belief in their future.” This belief is not supported by any basic grounding, such as assets or cash flow.
It is essential to keep in mind that bitcoin is a very volatile asset whose value is prone to irrational swings. Because there is no assurance that you will turn a profit on your investment, the standard recommendation made by financial experts is that you should not invest more money than you are prepared to potentially lose.