Mr Mark Cuban, the billionaire star of the popular pitch show Shark Tank and owner of the NBA team the Dallas Mavericks has given an interview responding to questions from twitter in which he gave a frank assessment of blockchain and cryptocurrencies.
In response to a question about why Cuban supposedly hates crypto, Cuban emphasised that:
Bitcoin is worth what somebody will pay for it
Cuban then drew a comparison between Bitcoin and collectibles such as baseball cards, art, and comic books, stating that:
there's no real intrinsic value [in collectibles], you can't eat a baseball card, or shouldn't eat a baseball card... Bitcoin, there's even less you can do with it.
This comment is not necessarily a criticism of Bitcoin, or other similar cryptocurrencies.
Intrinsic value is not intrinsically linked to monetary function. Although a good form of money should be portable and easy to trade, scarce and durable as a store value, fungible and divisible, having an alternative practical use as a commodity is not a critical characteristic of money.
Then, ironically, Cuban compares Bitcoin to a commodity with intrinsic value, gold, stating that:
[Bitcoin is] just so difficult, that it's only worth what someone will pay for it. So I say it's like gold. Gold's a religion.
But while gold might have some intrinsic value, as it turns out, it might not be that much. According to the World Gold Council, only a small majority of hold is used in industry. The majority went toward making jewelry and gold bars and coins — items that have value mainly because they’re trusted to be valuable. Similarly, the overwhelming majority of the value in a $20 note comes from the trust people place in it from the knowledge that it was issued by the government.
Cuban makes this point well, saying that while gold evangelists will tell you that gold is the perfect asset for a recession, the reality is that in a crisis gold is unlikely to function well as money.
In contrast to the relatively dour outlook on Bitcoin, Cuban qualifies his pessimism about Bitcoin by saying that:
I can make a great argument for blockchain, there's a lot of applications and they'll be used... It's not that I'm against cryptocurrencies. You just have to be very careful. At best they're stored value.
See the full video here.
Cuban's comments follow the Mavericks partnership with crypto payment processor BitPay in August 2019, offering fans the opportunity to pay for tickets and merchandise with Bitcoin.