The owner of the NBA Lone Ranger team talks about valuation: encrypted assets have become a legitimate value storage target

Original title: "NBA Lone Ranger team owner talks about NFT: Encrypted assets have become a legitimate value storage target"

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Original Source: Babbitt

Translator’s Note: This article is translated from NBA Dallas Mavericks owner and billionaire Mark Cuban Cuban) wrote a blog post on February 1. Cuban is an encryption enthusiast. At the end of January, he sold exclusive encrypted art on the NFT trading platform, and he did not hesitate to praise NBA TOP Shot. In the article, he recalled the experience of collecting stamps in his childhood, compared them to digital goods, and then led to the WallStreetBets incident that was hotly discussed last week.

What is valuable? Buildings, pens, stocks, cryptocurrencies, gold, intellectual property or other assets? Valuation is more of an art than a science.

When I was young, my mother often told me stories about stamps, which made me fall in love with stamps. At the age of 15, in order to collect more stamps, I started to participate in various stamp exhibitions, and soon discovered that this is an inefficient market, and the same stamp can be sold at different prices in the same exhibition. At the time, I bought stamps from a stamp dealer for 50 cents and sold them to a dealer an hour later for $25 (2500 cents). So I went from being a stamp collector to being an investor and paying for college that way.

The recent WallStreetBets incident reminded me of these childhood experiences. Every market has inefficiencies and traditions where capable players profit so much that they think they are the rules themselves.

The market often starts from a small scale, such as a child selling items he does not need on ebay, or getting a card from someone, and then online sold. It became a business. It’s interesting to explore inefficient markets where you have to own something and sell it somewhere face to face or by mail, or sell it through an intermediary or ebay or whatever.

In today's digital age, everything is changing.

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First let's talk about what is a store of value, In my opinion, we assign value to an item and are willing to buy it and hold it for a long time in the hope that it will increase in value in the future. Gold is one of the most quintessential stores of value in history. Gold lovers believe that gold has intrinsic value as it was once used as a currency, a hedge against inflation, and it can also be made into jewelry. While other precious metals also meet these criteria, gold has more buyers. As the number of buyers increases, the price of gold rises accordingly, and vice versa.

"Collectibles" such as cards, artwork, cars, stamps, etc. are also considered stores of value, partly because of physical ownership and scarcity by users prove. Forgeries or fakes do exist, but for the most part, we believe that Picasso is Picasso and that Luka or Lebron cards are still authentic. Collectors regard it as an investment product in order to obtain value-added benefits.

In the early blockchain industry, only blockchain games could bring revenue. After three years of development, smart contracts enable digital goods to have unique identification and transaction capabilities.

What is a digital good that can be sold? Literally, any digital commodity. If digital goods are generated and saved in a file format, they can be combined with smart contracts to define their usability, scarcity, attribution of ownership, and transaction rules. Distributed storage is realized through the blockchain, no one party is responsible for the transaction and the miners compete to confirm the transaction, so the assets based on the blockchain have become a legal value store.

Digital value storage is not limited to digital goods, but also includes cryptocurrencies (should be called CryptoAssets), such as Bitcoin, Ethereum, DeFi tokens coins etc. Bitcoin has a transaction history of more than ten years, and the wealth effect is significant. To many, the idea of a crypto asset as a store of value is crazy. They believe that encrypted assets have no intrinsic value and are air. Is this really true?

In the eyes of academics, tangible things are valuable. Only what can be seen, heard and touched is truly valuable. However, for a generation that has grown up in a digital world, digital things have value. They know that digital goods or encrypted assets based on smart contracts have more investment value than physical goods. I spent a lot of money collecting stamps and baseball cards to really understand this.

To collect stamps or cards, you need to keep the physical integrity intact. In the actual delivery, there will be greater risks and costs in the transportation process. But digital goods do not suffer from these drawbacks.

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Take NBA TOP Shot as an example, you can get the fun of collecting, without Any risk, the price is determined by the law of market supply and demand. Fortunately, I got Maxi Klieber's dunk card in NBA TOP Shot. Of course, one could argue that you could always watch the same video on the internet, or print out a picture of the physical card on the internet, and it wouldn't change the card's value.

In addition to the purchase and collection features, NBA Top Shot also provides a marketplace where it can be sold. On the website created based on the Flow public chain, we can view all the cards related to Maxi Klieber, including numbers, prices and player information. This is the basis for a consumer-friendly and efficient marketplace. One thing I don't understand is why anyone would sell Maxi's card, he is a top 10 defensive player in the NBA!

In my opinion, digital goods can have the same ownership as physical goods, and the value is determined by supply and demand. Other than saving passwords and using the wallet, I don't find it particularly troublesome. Conversely, if you're a traditional sports fan and want to share something you own with someone, you'll have to take a photo and send a link.

In addition, digital goods have other benefits. On Mintable, Rarible and other platforms, mint and sell digital goods; on OpenSea, NiftyGateway and SuperRare, sell encrypted art or other types of digital goods; on the CryptoSlam website, you can easily see the market conditions of any digital goods, And the transaction can be completed within minutes. Transparency is the biggest advantage, you can see the historical information of each seller and auctioneer, such as items owned and prices. Therefore, the threshold for such digital goods is much lower than that of traditional artworks and collectibles. The door to a new world is opening.

The digital commodity and encrypted asset market is not perfect, and there are some defects, such as poor user experience of the wallet, high transaction costs, and the market may be manipulated by giant whale players. Will also be affected by narratives like stocks and physical commodity markets.

Most importantly, more and more investors and traders believe that digital commodities and crypto markets are better than traditional stock and physical markets. The vast majority of them are young people who don’t like being controlled by power institutions and hope to get the wealth they deserve through their own efforts. They see people around them gain wealth through cryptocurrencies and digital assets, and most of the starting capital is not many. Most of these people's gains come from understanding, buying and using crypto assets, and that is power.

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So, with WallStreetBets (WSB), GME and others that are trading What's the deal with stocks?

Apparently WSB is applying the principles of the crypto market to the stock market, and they hate the old school too. They know that Wall Street hasn't changed much over the years, that despite digitization in many ways, the gameplay hasn't changed. Wall Street sets 100% control and conditions from top to bottom, which stock is number two in the S&P 500? Which is deleted? Nobody knows, but it's instructive and can change an investor's fortunes. The SEC uses internal administrative powers to prevent defendants from enjoying their constitutional right to trial. You are powerless to fight them. Big brokerages call millions of clients, offer them price targets, and hope to move the market. WSB is doing the same thing on Reddit these days, is it wrong? Stock manipulation and buybacks were illegal until 1982, when the SEC brought a brokerage CEO to justice. Guess what happened to CEO salaries since then?

Wall Street and its governing body, the SEC, are satisfied and happy. This is because the learning speed of the conservatives has slowed down and it is difficult to adapt to the changes of the times. They don't realize that the world is changing, or don't believe in those changes. They believe that whether it is the company stock that retail investors buy, or the digital asset they buy, the price will fall. They study companies such as GME, AMC, BBBY, etc., to understand what happens in short-term squeezes and how to make prices rise. After bankruptcy, company stock is either redistributed to debt holders or written off entirely. If the companies backed by WSB and other investors go bankrupt, their shares will also be worthless. What they don't understand is that WSB fully understands and accepts this risk.

Now, we connect the store-of-value generation with the old school. This is a generation that doesn't care what Wall Street conservatives think about valuations, ROI or cash flow. They learned from the rise and fall of Wall Street stocks, (Wall Street) made other people a lot of money, it is a game that makes rich people richer. Those narratives are sales pitches designed to sell stock, and they want to change the game. They deserve and have every right.

Stocks are just a way of digital value storage. Like previous and future successful value storage, the more decentralized the power, the greater the power of collective cooperation. Whether it is GME, AMC, or Bitcoin, AAVE, everyone knows that they can make or lose money from the transaction. Some people may take unacceptable risks, but in their view, the investment advice they follow on Reddit or CNBC or Bloomberg basically makes no difference.

They understand that the more united retail investors are, the less power Wall Street has. They also understand that bloated Wall Street is in trouble. Retail investors as a whole can change the rules of the game by targeting any hedge fund or stock anywhere, anytime, for any reason. Analysts on Wall Street can make big decisions and get whales to buy and sell stocks, and now WSB followers can do the same, with far greater influence and power.

This doesn't have to be negative, it could be positive instead. Retail investors back and pump up stocks of companies with a social mission, as well as companies that offer equity at minimum levels to employees, driving them into the market and making their fortunes. People in corporate positions or activist investors can’t unite 100 companies at once, and they don’t need to. To have an immediate impact on something of significance is both amazing and great for this country.

This is also why Wall Street hates and joins the fight because it makes them lose their power. The "store of value" generation does not want to break the law, but to challenge the existing financial system. Those who ignore them and ignore the future will be punished. Every generation in this country has its own unique strengths, and the "store of value" generation has found its strength in the financial system. If we can understand, respect and learn from them, the country will be better too.

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