Mark Cuban gives exclusive insight into why he believes bringing the Dallas Mavericks into the cryptocurrency market is a smart investment for venture capitalists, but cautions millennials who are starting to invest in the new money.
If you’re a basketball fan in the Dallas metro area, the upcoming 2018-2019 Dallas Mavericks season will be an exciting one. Dallas Mavericks owner, tech billionaire, and Shark Tank investor Mark Cuban announced on Monday that fans will soon be able to purchase season tickets to Mavericks games with cryptocurrency, specifically bitcoin and ethereum (“Ether”) come the 2018-2019 season.
Mark Cuban was kind enough to allow me to interview him about why this move towards crypto is not just a smart investment for him, but for his team, and the NBA.
What Is ‘Cryptocurrency’?
“Cryptocurrency” is a digital/virtual currency that is designed to work as an unregulated, decentralized medium of exchange. It uses coding (“cryptography”) to secure and verify each individual transaction. The idea behind this market is to entertain a decentralized digital cash system without a central entity controlling its flow.
The digital currency requires a payment portal/network, recording a ledger of expenditures and balances on a centralized server, e.g. PayPal. However, in a decentralized network, there is no server. Rather, every computer on the network needs to have its own ledger containing all the transactions.
Crypto–Craze: Today’s Global Phenomenon Of ‘Crypto–Vesting’
If you’ve invested in any cryptocurrency, what you really have is a private key/password and a public key/password to its physical address on the blockchain (public ledger), allowing for the holder to withdraw the currency to spend or trade. But, without the password, the individual cannot access his or her funds. Bottom line is, don’t lose it. The blockchain contains all trades, expenditures, letting others know how much value has been exchanged. For security purposes, the identity of the individuals behind the transactions are hidden.
Today, the idea of digital currency has become a global phenomenon to both the consumer and to venture capitalists such as Mark Cuban. While most people, businesses, banks, and governments are still trying to understand its purpose, how it functions, and how to even consider implementing it in relation to our centralized currency, they still recognize its important in the marketplace.
“We want to make our products and services how and where our customers want to buy it.” —Mark Cuban, Owner of the Dallas Mavericks
What businesses, consumers, and even the government are still trying to wrap their heads around is whether it’s actually possible to remove the central authority and still have the ability to create/declare a valuation and state of balances. Despite these questions, investors like Cuban continue to believe and ride the bubble of the early success of these currencies like bitcoin (“BTC”), litecoin (“LTC’), ethereum (“Ether”), and ripple are bringing.
Inside The Shark Tank With Tech Billionaire And Crypto-Shark Mark Cuban
I had the opportunity to speak with Cuban two weeks ago about hisTwitter TWTR +1.55% announcement January 15, informing Dallas fans that they could soon expect to purchase tickets with bitcoin and ether as early as next season, and his thoughts on the current state of the cryptocurrency market and why he has chosen to bring the Mavericks franchise into it.
- The Cryptocurrency Market
The crypto market has continued to draw the attention of venture capitalists such as Shark Tank investor and Dallas Mavericks owner Mark Cuban. Cuban recently backed a new venture capital fund for cryptocurrency-related investments called “1confirmation.”
When asked on his thoughts on the current state of the bitcoin market, Cuban responded that “…it’s a collectibles market. The more buyers, the higher the price. In that way, it’s very similar to gold, art, and other collectibles.”
Since the beginning, Cuban has stood by the notion that the crypto market is heavily influenced by the actions of the buyers. When one buys, many buy; when people sell, others sell.
- No Blueberry, No Ticket: Making Economic Sense Of Enigmatic Currency
Businesses such as Facebook are beginning to look into cryptocurrency and whether or not its worth opening their systems up to. In his 2018 mission statement, Mark Zuckerberg wrote that he’s “interested in going deeper and study[ing] the positive and negative aspects of these technologies, and how best to use them in [their] services.”
If they wanted to pay in blueberries and I thought it made economic sense, I would let them pay in blueberries.” —Mark Cuban
Andrew Rossow: Why do you think it’s beneficial for businesses, and even sports organizations such as the NBA to consider entering into the cryptocurrency market?
Mark Cuban: For the same reason that content owners stream their content—you want to provide your product, [specifying] how and where they want to receive it. The same applies to crypto. We want to make our products and services how and where our customers want to buy it. If they wanted to pay in blueberries and I thought it made economic sense, I would let them pay in blueberries.
Investors such as Mark Cuban and Robert Hervajec also understand that going deeper into these technologies requires understanding the risks associated with them, such as learning how to control and implement them.
“Invest in the infrastructure, not the speculation,” says Robert Herjavec, CEO of Herjavec Group. You’re not just talking about how to transition currencies, but transitioning an entire way of thinking on the minds of consumers, organizations, and most importantly, financial institutions.
- Keeping The Dallas Mavericks Organization Trendy And On-Top
Since the beginning, Cuban has pushed for growth, development, and success from not just his team, but from his business ventures and most importantly, his customers. His undying loyalty to his team and fans has earned him a warm spot in Dallas fans’ hearts. When it comes down to success in business, “you have to re-earn your customers business every day,” says Cuban.
Rossow: Why would this [move] be a good thing for Dallas sports fans and the Mavericks organization as a whole?
Cuban: …[W]e want to allow customers to buy how they want to buy. As long as we can hedge or exchange the payment method and it works with our payment gateway, we will accept it as payment.
Like the Sacramento Kings, the Mavericks will join as the second NBA team to enter into the crypto market.
Cuban continues to lead his organization in a positive direction, ensuring that the Mavericks continue to grow and develop, but most importantly, reminding fans that without their loyalty, support, and patronage, the organization would not be what it is today.
- Millennials Investing In Crypto Need To Understand Their Wallet
Since the crypto-craze began, millennials have been investing their funds in various cryptocurrency markets, most notably, Litecoin and Ripple. When asked whether this is a good starting point for millennials to begin building a portfolio with, Cuban warned against this.
Rossow: Do you feel this is a good starting point for teens and millennials to start building a portfolio, even if it’s not a regulated currency?
Cuban: No. This is still a very volatile place to put money. You have to be able to afford to lose it.
Emphasizing Cuban’s point on the volatility of the market, the entire crypto market fell by double-digit percentages. Bitcoin dropped by 15%, falling to below $12,000 for the first time since December 4, 2017; Ether dropped by over 20%, hovering right above $1,000, and Ripple fell by 33%, dropping to $1.23 at the time. These price drops have a huge impact, which goes to show the direct correlation between number of buyers and the inescapable thoughts plaguing consumers on when these markets may crash.
As Cuban has indicated in the past, “you need to do some homework before you ask business questions.”