Selling stamps as a kid helped Mark Cuban see appeal of digital assets
Now, remembering those days helps him understand the next generation and its interest in digital goods and digital assets like bitcoin, he said in a blog post published Sunday.
“[W]hen I got to be about 15 and started going to stamp shows to add to my collection, I quickly realized that there were inefficiencies in that market,” Cuban wrote. “The same stamp was selling for different prices at multiple stamp dealers at the same show. It didn’t take me long to realize I could buy from one and sell to another.” Cuban would buy a stamp for 50 cents and sell it an hour later for $25.
He compared this experience to what has happened with Reddit WallStreetBets and its traders buying GameStop and other stocks.
“Watching what has happened with Wall Street Bets reminds me of those days,” he said of the subreddit that initially spread the word about buying GameStop stock, helping spark a frenzy. “There are inefficiencies and traditions in every marketplace that have become so engrained by the power players that they literally think they are ‘rules’ that most, if not all participants will follow,” Cuban wrote. “Until they don’t.”
Back in the day, it was “a kid finding discarded items, cleaning them up and selling them on eBay, turning this into a business,” Cuban wrote.
But more recently, “finding inefficiencies has followed an interesting path from purely analog when I was a kid, you had to have something, go somewhere and sell face to face or by mail, or use an intermediary like a broker, to using the internet and sites like eBay or other marketplaces to sell their physical goods.”
“Now we are seeing the next step in that evolution” with digital assets like bitcoin and stocks being sold via apps or online and smart contracts (the kind of contract used in blockchain), Cuban wrote.
“What happens when literally anything digital can be a store of value?”
Cuban predicts the next generation will find value in digital assets — from any digital good, including any creation made online, to different cryptocurrencies, like bitcoin and ether (the cryptocurrency powered by Ethereum) — which will be easier to maintain than physical assets, he wrote.
To sell collectibles like stamps or cards, an owner must store them, keep them in pristine condition, protect them and when selling, take on risk when delivering them, Cuban wrote. “Because much of the industry is person to person, there are a variety of other risks and costs introduced… All of these are expensive, time consuming, risk increasing and annoying.”
But with digital goods and digital marketplaces, “you have all the fun, none of those risks and the value is still set by the same…