Bitcoin is down over 7% in the past 24 hours in another week of heavy losses, and billionaire investor Mark Cuban says the pain for crypto markets may be just beginning.
The shark tank star tells his 8.6 million Twitter followers that crypto is going through the same phase as the internet was in the early 2000s, when countless startups with little to no use came over their heads.
According to Cuban, the crypto industry, especially smart contract platforms, needs to focus on how to improve business models to justify some of its lofty valuations.
“Crypto is going through the doldrums that the internet has been going through. After the initial surge of exciting apps, NFTs, DeFiP2E (play-to-earn), we saw the imitation phase when chains subsidized the movement of these apps to their chains (aa bandwidth and storage subsidies by startups in the 2000s).
What we haven’t seen is the use of smart contracts to improve business productivity and profitability. That must be the next driver. If companies can use smart contracts to gain a competitive advantage, they will. The chains that recognize this will survive.”
The Dallas Mavericks owner says the digital asset ecosystem is overflowing with too many projects offering the same selling point as everything else. Cuban believes that imitators without unique utility and product market viability will eventually die out as the hype dies down.
“The chains that copy what everyone else has will fail. We don’t need NFTs or DeFi on every chain. We don’t need bridges to move NFTs between chains (does that make it fungible?). We need to replace smart contract apps [software as a service] apps.”
When it comes to utility, Cuban has been vocally optimistic Ethereumas well as platform Polygon (MATIC), its largest scaling solution. Veteran entrepreneur says smart contract ecosystems like Ethereum Here are the real upside opportunities.
“There are the tokens that have utility, like Ethereum. You have these things called smart contracts and they allow you to trade different things, whether it’s NFTs [non-fungible tokens]Insurance contracts on Ethereumes are just a variety of things.
NFTs are one version of the applications and we’re starting to see others [like] Textbooks became NFTS. Music, songs, movies turned into NFTs. Anything digital can use a smart contract to become an NFT.
Therein lies the real benefit.”
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Source: Crypto News Deutsch