Billionaire and Dallas Maverick owner Mark Cuban analyzes the meaning of crypto assets. Compared with old-school investors, the value store generation does not want a few people to make more money, but to make more people make money.
Written by: Mark Cuban, owner of NBA team Dallas Mavericks Compilation: Lu Jiangfei
What is valuable? Buildings, pens, stocks, cryptocurrencies, gold, intellectual property, or other assets? Sometimes when we evaluate certain things, we seem to pay more attention to the artistic quality and ignore the scientific one .
When I was a child, I liked collecting stamps very much. Why? Because my mother liked to collect stamps when she was a child, she introduced me to the world of stamp collecting. Then, when I was about 15 years old, I started to participate in the stamp exhibition, hoping to further enrich my stamp collection, but I quickly realized that this market is very inefficient, even if the same stamp is in the same stamp exhibition, it will be different. Price sale. As a result, I discovered that I can actually buy stamps from one person and quickly sell them to another person, so that I can make a difference in price.
For example, I bought a stamp from a stamp dealer for 50 cents and sold the stamp to another dealer for $25 an hour later. As a result, I quickly changed from a stamp collector to a stamp “investor” and tried to make money using the ” advantage ” of the inefficient operation of the stamp market to pay for my university tuition.
Now, seeing what is happening on Wall Street reminds me of the days when I was young when I bought and sold stamps. It is undeniable that there are some deep-seated problems in every market, such as inefficiency and penetration by those in power, so that those in power will think of themselves as ” market rules .” Under this kind of authority, even if not all market participants-but the vast majority of market participants will be forced to obey-until they can’t stand these practices.
This kind of ” resistance ” usually starts on a small scale. For example, a child finds some discarded items, then puts them on eBay after taking care of them, and then gradually turns them into a business; others get low prices from somewhere. Price trading card, and then check the price difference online and sell it, it will also gradually turn into a business. It always makes us happy to see people think so.
So how can we find that the market is inefficient? In fact, we need to follow an interesting method. When I was a child, I started from pure simulation. You have to own something, and then you can go somewhere and sell it face-to-face (of course you can sell it by mail), Or you can use a broker to sell physical goods on the Internet and websites such as eBay.
Now that we see that the market is constantly developing, what will be the next step? What happens when everything is digital? Literally, when any digital technology can play the role of store of value, what will happen to the market? Will the stock be affected?
What is a store of value ? I think that some people assign value to something and are willing to pay a sum of money and stick to it, hoping that this situation can increase the value of “this thing.” For example, gold is one of the most historical and visible stores of value.
Gold investment ” old guns ” will tell you that gold is the real store of value, because it has played the role of monetary base throughout the ages, it is also the anchor of practical currency, and it is also a hedge against inflation. Gold has intrinsic value because it is widely used in manufacturing and jewelry industries-and this is actually the narrative of gold. Although there are many other ” precious metals ” on the market that meet the same standards. But there are more gold buyers. When the number of buyers increases, the price will rise, and vice versa. In fact, apart from enough people who believe in the gold narrative, gold has nothing unique or special.
Transaction cards, artworks, cars, stamps and many other ” collectibles ” can also be regarded as stores of value. One of the reasons people want to “store value” is that they need to have materials as evidence of physical existence and scarcity. . For creating a certain number of collectibles, people can always think of the most reasonable way. Physical products are actually to confirm the real existence of “stored value” (in most cases, there will indeed be fakes, and fraud is also a tricky problem). But in most cases, we believe that Picasso is Picasso, Luka Doncic rookie card is Luca Doncic rookie card, LeBron James rookie card is LeBron James rookie card. (Chain note: Luka Doncic and LeBron James are both NBA stars.)
Of course, those who use ” physical objects ” as investment and collect them hope that the value of “physical objects” will rise, and they can often confirm that the value of these objects will rise before investing. Owning and selling them afterwards can bring enough profit. In the analog world-before the birth of the blockchain, “physical” investment seems to be the only means of storing value for people.
But in the past 3 years, the situation has changed a bit (crypto enthusiasts told a different story, in fact, this has been happening since 2009). Blockchain has the ability to support smart contracts and can uniquely identify digital goods and related transactions.
So, what are digital goods that can be sold? Literally, any digital item can be regarded as a digital commodity. If the part can be generated and saved as a file format, it can be defined as intelligent contracts (Smart Contract), which can be a smart deal, “If this is the way” (If this then that) rules to play a strong role through a lot, and then A certain degree of control over the digital commodity includes:
- Define the availability or scarcity of digital goods;
- Define what should happen when digital goods are sold;
- Define whether to grant ownership.
I like the concept of digital goods very much, and even think that this may be the ultimate game changer, regardless of whether or not a certain percentage of the sales amount will be paid to the individual/company who originally minted the digital goods in the future.
Due to the intelligent management of digital commodity distribution, storage and maintenance through the blockchain , no one party is responsible for the transaction, and miners are competing to confirm the transaction. Therefore, assets driven by the blockchain have now legally become a store of value .
In fact, this kind of digital value store is not limited to digital goods, but has already been included in cryptocurrencies such as Bitcoin and Ethereum (perhaps should be called encrypted assets, because they are rarely considered a currency). And the creation of tokens to support decentralized finance and other value-creating crypto-asset derivatives-they are all stores of value, of which the largest market value is Bitcoin. This crypto asset has been born for more than ten years. Has a long history of trading and wealth creation.
However, for many people, it may still be a crazy idea to think of crypto assets as a store of value-for them, crypto assets have no intrinsic value; to them, crypto assets are nothing but empty ” Digital representation” is nothing more than; for them, those who invest in crypto assets are crazy and will pay a high price for it. But that is not the case.
Traditional investors will always say that you need to have something “tangible” to make it valuable, otherwise it will be difficult to deal with fraud. If we can touch, see or hear these “tangible things”, it is real and valuable. But the new generation of people who grew up in the digital world know that the greatest value for them is digitization, just like music, which was burned on CD in the past, but now you can listen to it online.
This generation knows that smart contracts and the digital goods or encrypted assets reflected in them are better investments than traditional, visible, tangible, or felt-use (STFU) physical objects. 🙂
I have spent a lot of money and time collecting stamps and baseball cards, so I am very impressed. I also think digital goods or encrypted assets are better investments.
When you collect stamps or cards, you will save these physical objects very carefully. You must store them and keep them in their current physical state, and you also need to protect and keep them safe. When you want to sell stamps or cards, you need to deliver the goods to the buyer, and there are considerable risks in the transportation process. In many industries, many operations are person-to-person, so there are other risks and costs in these traditional systems. All of these are expensive, time-consuming, and also increase risk, which is very annoying.
I use digital trading on the NBA Top Shot comparative example, in the NBA Top Shot You can get a lot of fun, there is no risk associated with the above-mentioned, and the transaction value is still determined by the law of supply and demand similar.
I am very happy to know that I have the classic dunk moments of NBA star Maxi Kleber, and know the serial number. Some people may find it boring to watch the same video on the Internet anytime, anywhere. Well, actually, I can get the same picture on any traditional physical card on the Internet and print it out, but doing so will not change the value of the star card at all.
When I want to sell this star card, NBA Top Shots provides a trading market. With the help of the website created on Flow BlockChain , I can check every Maxi Kleber star card, serial number, Prices and other information. On this trading platform, it’s consumer-friendly and efficient, but I must add that I don’t know why anyone sells Maxi Kleber star card. You know Maxi Kleber is one of the top ten defenses in the NBA. Whoever!
Using digital goods, I can still have the same sense of ownership as physical goods, and the value is still determined by the relationship between supply and demand. I have no trouble except remembering the password and downloading the wallet. In fact, remembering passwords and downloading wallets are becoming easier. The interesting thing is, if you are an owner of traditional sports goods, what do you do when you want to share what you have with others? You will take digital photos of the products and send or link…
In addition, digital goods have many other benefits. You can even “cast” digital goods yourself and place them on the market for trading. For example, websites like Mintable and Rarible, I can easily cast digital goods on them, and then sell them directly, and also sell digital art and other products on the market, all of which can be openly hosted. Today, platforms such as OpenSea, NiftyGateway, SuperRare, NBA Top Shot, and Bitcoin Origins can all create and cast their own exclusive content or licensed content-the biggest advantage of these platforms is transparency, I can clearly see every buyer and bid The transaction history of the trader, see what commodities they own and what prices they have paid. For each digital commodity, I can easily see the market situation of similar commodities. For example, CryptoSlam is a good digital commodity platform. Transactions can be completed in a few minutes or less. When I want to trade a digital commodity, I can purchase it directly. In addition, I need to add that basically, the threshold of the digital commodity market does not exist, at least much lower than the traditional art and collectibles trading market, so it also opens an incredible door for attracting new users!
Today, the market is flooded with many different crypto assets. The same problem also appears on the wallet, yes, various digital wallets may cause confusion for you, but this problem is not serious, I believe everyone can figure out the digital wallet. Just as you can clearly distinguish between gold, silver, currency, stamps, and trading cards, the value of these commodities is determined by the relationship between supply and demand. (For crypto users, the market supply of crypto assets is determined by algorithm settings.)
Of course, I am not saying that the market for digital goods and encrypted assets is perfect, nor is it true. For example:
- The transaction cost of digital goods and encrypted assets may be high;
- The market for digital goods and encrypted assets can still be driven by some large players (giant whales);
- Digital commodity and encrypted asset markets, like stocks and physical commodity markets, may be affected by narratives, which may or may not be correct.
But most importantly, more and more investors and traders believe that the digital commodity and encrypted asset market is better than the traditional physical market and stock market, and most investors and traders are still very young. The feeling of being in control. Without a centralized authority, young investors and traders can get rewards through their own efforts, and there is no need for government agencies or large companies to support.
On the other hand, young investors and traders have also been observing their peers who have obtained wealth through cryptocurrency and digital assets. Those investors and traders who entered the cryptocurrency and digital asset market in the early stages did not have much start-up capital. But in the end they all gained a lot of wealth. Not only that, young investors and traders do not like old-school investors and traders to intervene in the cryptocurrency and digital asset markets. They know that using digital assets and unified actions can bring wealth. This is power. They know and are learning How to use cryptocurrency and digital assets.
So, what does this have to do with Wall Street Bets (WSB) and Game Station (GME: GameStop), and other stocks they are trading?
Well, it is obvious that WSB traders are applying the same investment principles in the world of cryptocurrencies and digital assets to the stock market, which is why old-school investors and traders hate them.
Although Wall Street has been passed down from generation to generation, the nature has not changed much. Of course, Wall Street has been digitized in many ways, but the rules of the game have not changed. Wall Street is 100% controlled and regulated from the top down. Do you know what the second-ranked stock in the S&P 500 is? Which stock will be deleted by the S&P 500 Index? Nobody knows. In contrast, cryptocurrencies and digital assets are enlightening and can change the fate of investors. do you know? The US Securities and Exchange Commission actually has its own internal administrative judge, so that the defendant cannot enjoy the constitutional jury trial right? Yes, once you become a defendant of the US Securities and Exchange Commission, you are simply unable to fight them, they are really too domineering! Large brokerage firms will make crazy calls to millions of customers and ask them to buy stocks at the target price, hoping that retail investors can cause market volatility. However, for retail investors on the Reddit forum, is it also wrong for them to trade game station stocks? ? Yes, before 1982, stock repurchases were considered illegal by the US Securities and Exchange Commission. However, the CEO of a brokerage firm later took charge of the US Securities and Exchange Commission. As a result, the 10b5-1 rule was passed in 2000, stipulating that repurchases using pre-disclosed and unchangeable automated trading will not be recognized as insider trading. Think about it. Since then, what has happened to the compensation of CEOs of listed companies?
Wall Street and its governing body, the Securities and Exchange Commission (SEC), are becoming increasingly large and complacent. This trend will slow down the learning of old-school investors and traders, and make it difficult to adapt to market changes and keep pace with the times. Obviously, they didn’t realize that everything around them had changed dramatically!
The results of it? Old-school investors and traders have missed many opportunities, but they don’t even want to believe that what will happen or will happen in the future. But first, they seem to have an obsession, that is, whether it is a company or a small trader, as long as the purchase of digital assets, its value will decline. In fact, old-school investors and traders have also studied the stocks of companies such as GME, AMC, and BBBY, and they know what happens when short-term shorts are shot. Indeed, for companies with poor performance, stock prices will fall, because this is the most effective pricing method in the stock market, and it makes sense. For a bankrupt company, the shares are either redistributed to debt holders or all written off (of course, there are other options, but these two measures are sufficient). There is no doubt that if the companies supported by WSB and other investors go bankrupt, the shares of these companies will also be worthless. But what old-school investors and traders don’t understand is that new investors like WSB fully understand this and accept this risk. In other words, old-school investors and traders think they are smarter, but they are not.
Now, the “store of value generation” is kicking the ass of old-school investors and traders.
The new generation of young people don’t care about the understanding and views of Wall Street’s old-school investors and traders on market valuation. They don’t care about price yield, future cash flow, net present value, or the yield data given by analysts every quarter. , They don’t care at all. A new generation of investors and traders have learned a lot from the ups and downs of Wall Street, and now they have to change the rules of the game: not to make a few people make more money, but to make more people make money.
Choosing the stocks of companies such as GME, AMC, BBBY, etc. is just a means for a new generation of investors and traders. What they really want to do is to change the rules of the game, and then smash the ass of old-school investors and traders. They have all the rights. , Should also have rights.
Stocks are just another form of digital storage of value. Like other stores of value in past history, the later generation of value stores always outperform the previous generation. The more dispersed the power, the greater the power generated by collective cooperation.
Of course, whether it is GME, AMC, Bitcoin or AAVE, everyone knows that they can profit from trading, but they will also suffer losses at the same time. Of course, some people will fall into an unfortunate situation, risking more losses than they should have earned. However, the more collective cooperation, the less power Wall Street will have. The new generation of investors and traders know that the huge Wall Street has become slow, obsolete and beginning to fall into trouble. It is easier than ever to fight Wall Street.
As a whole, a new generation of investors and traders can target any hedge fund or any stock for any reason and change the rules of the game. This is no different from the major investment decisions made by Wall Street analysts in the past. In the past, retail investors only Can follow the giant whale to transfer stocks, and now WSB and its followers can use collective power to do this, and at the same time have greater market influence.
The targets chosen by the new generation of investors and traders are not always negative. They can be positive and promising companies, such as:
- Support some company stocks with a strong sense of social mission;
- Push up stocks of companies that provide employees with equity at the lowest level so they can enter the market and gain wealth;
- Or, directly hold important positions in the company, so that you can better protect investor power.
Of course, the new generation of investors and traders may not be able to work with 100 companies at once, at least in a short time. But in fact, they don’t need to do this—because the ability to have an immediate impact on things of great significance is both amazing and great for this country.
However, Wall Street will hate them and will fight against them because the power of Wall Street is taken away. The “Store of Value Generation” does not want to violate the law. They just want to break the old-school system that challenges the store of value, “kill” those who ignore them, and let those who truly understand them create a better future. . Each generation has its own unique strength. The “value store generation” has found a special cohesion in the financial field. If we understand them, respect them and learn from them, this country will become better.
Well, if you think my opinion is wrong, please feel free to communicate.
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