Billionaire celebrity investor Mark Cuban thinks the vast majority of digital assets will go bust – but he’s still a believer in crypto.
This week, the Shark Tank star had a friendly debate on Twitter with John Reed Stark, a crypto skeptic who founded the U.S. Securities and Exchange Commission’s (SEC) Office of Internet Enforcement, about the merits of digital assets and the SEC’s approach to regulating them.
Stark argues that crypto’s promise has “long since faded” and claims that smart contracts aren’t actually “smart” or “contracts.” The former SEC official says smart contacts don’t offer avenues for redress and relief when there is fraud or mistakes involved, unlike financial institutions.
“There exists no intelligence, trust or privity in smart contracts, just code, which is not only often flawed and rife with error and vulnerabilities but can also be easily manipulated to do whatever the coders want.”
Cuban says he has spent his whole career founding companies that people viewed as unnecessary until they started relying on them.
“Smart contracts are about six years old. Maybe the name isn’t accurate, but the utility is valid. 90% of blockchain companies will go broke. 99% of tokens will go broke. Just like 99% of early internet companies did. 99% of the startup companies leveraging [large language models] will disappear.
But the winners will be game changers. That’s the way tech works.”
Cuban also outlines the applications he believes smart contracts can enable.
“Book.io did a deal to sell my book as [a non-fungible token]. What makes this a better option is that the smart contracts can track and immediately pay royalties on sales in the secondary markets. That can’t happen with physical or traditional digital books. I can quickly and easily purchase carbon credits as offsets and using blockchain burn them and remove them from circulation. Possible offline but the blockchain publicly reflects the action.
I can purchase weather insurance that uses a data feed and a public smart contract to immediately pay me (or not) based on the national weather stream.”