Billionaire Mark Cuban is usually investing in cryptocurrency these days.
“The investments I’m making now are not in traditional businesses,” Cuban mentioned on a recent episode of “The Problem With Jon Stewart” podcast. In truth, “80% of the investments that I make that are not on ‘Shark Tank’ are in or around cryptocurrencies.”
One sort of group in specific has captured Cuban’s consideration: decentralized autonomous organizations, or DAOs. “That is really where I look to invest,” he mentioned.
In concept, a DAO is a blockchain-based collective that is not ruled by one individual or entity. Any modifications to the DAO’s guidelines or governance have to be voted on by its members. To achieve these voting rights, in addition to different powers inside the group, buyers sometimes maintain the DAO’s governance tokens.
“All these new businesses are being formulated now that take this new approach,” Cuban, an investor on ABC’s “Shark Tank” and proprietor of the Dallas Mavericks, mentioned. He added that there will probably be “game-changing businesses” that come from these sorts of organizations.
In specific, he predicts that industries like banking and insurance coverage are “going to change,” thanks to those new applied sciences.
Cuban can also be bullish on smart contracts, which are collections of code that perform a set of directions on the blockchain and energy decentralized purposes. Smart contracts are instrumental in forming DAOs, in addition to in powering different crypto tasks, resembling decentralized finance, or DeFi, applications and nonfungible tokens, or NFTs.
But DAOs and their governance tokens could be dangerous bets for buyers. Financial specialists warn to solely make investments what you may afford to lose, since they deem cryptocurrency to be a unstable and speculative funding.
Nonetheless, this optimistic outlook is not notably shocking from Cuban, who has consistently been outspoken about his perception in good contracts. Cuban is an avid investor in the crypto area, with a cryptocurrency portfolio of numerous digital cash, NFTs and investments in many blockchain companies.
But even Cuban is reasonable concerning the burgeoning business. He referred to as the cryptocurrency area casino-like as a result of it is nonetheless so new. “It’s like the early days of the internet,” he advised Stewart. “The exact same thing is happening now. It’s 1995 for cryptocurrencies.”
“It’s not to say there aren’t a lot of problems,” Cuban continued. Cryptocurrency “is hard to understand and it’s a hassle. But 10 years from now, there’s going to be those that succeed that will create its own economy.”
Disclosure: CNBC owns the unique off-network cable rights to “Shark Tank.”