124 - Is Mark Cuban Buying the Bear?

Transcript

welcome to bank list where we explore the frontier of internet money and internet finance this is how to get started how to get better how to front run the opportunity this is ryan sean adams and i'm here with david hoffman and we're here to help you become more bankless guys we got a special episode for you we just pinged mark cuban and said hey mark do you want to come on the podcast sometime i know the the playoff season is over for the mavs and you want to talk some crypto we're in a bear market and he said yeah sure right maybe 30 minutes let's do this and so we jumped on and we did it and dave and i just recorded an episode with mark cuban picked his brain about a number of things how he feels about the crypt uh the current crypto bear market

how he thinks we're going to recover if we will recover and uh where do we end up on the other side in particular what he's looking for from an application perspective from crypto so it was all of mark cuban's thoughts on where we are in this market and of course he's uh you know he's been deep down the rabbit hole in some of these protocols messing around with d5 protocols you guys heard in our original episode with him uh he's into axi infinity in the game five market he's also doing things with carbon credits and klima dao so like he is deep in a number of these things david what were some of your thoughts going to this episode yeah it's interesting to hear how mark cuban thinks about these things and you can definitely like try and put yourself in

mark cuban's shoes as like a shark tank investor right the external investor uh he he's coming from this with a like a business mind right uh he he's uh got this experience coming from the the world of traditional finance and he when he talks about the bear market you can hear him put it into these terms and and ideas that he's familiar with but then i then i kind of clicked at me to what he was saying is like oh you're waiting for like uh layer ones to like band together and merge because in times of bear markets and times and struggles things like have mergers and acquisitions and so i like putting myself in the shoes of mark cuban and trying to understand how he thinks about the crypto industry via more traditional routes i thought was pretty interesting and again from the external investor

who's always in the mindset of utility for the customer utility for the user what product am i actually going to go out of my way and even though crypto is hard i'm still going to go out of my way to use it and so it's always a refresher talking to mark cuban about the external reference point for how the how people like mark cuban look at crypto and what they see when they take a peek inside of our industry guys we're going to get right to this episode with mark but before we do we want to tell you about these awesome tools to help you go more bankless rocket pool is your friendly decentralized ethereum staking protocol you can stake your east with rocket pool and get our eth in return allowing you to stake your east and use it in d5 at

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the cost of the average gas fee if you're a developer who wants low gas fees and instant transactions for your users visit arbitrum.io developer to start building your dap on arbitro if you're a d-gen many of your favorite dapps on ethereum are already on arbitrom with many moving over every day go to bridge.arbitrom.io now to start bridging over your eth and other tokens in order to experience defy nfts in the way it was always meant to be fast cheap secure and friction free mark cuban we had you on the banks podcast a little over a year ago and so much has happened since then how's it going my man well like everybody else i'm getting torched there's one one big club absolutely uh and so yeah we had you on a live stream

as you were going down the d5 rabbit hole you're into nfts you saw the potential you we even learned that you were writing your own uh learning about solidity and doing your own contracts uh and so i kind of want to just get a speed run of what you have done since then so can you like speed run us through the last year of mark cuban in crypto i mean just a lot of investments a lot of research a lot of learning a lot of losing um a lot of optimism still but just like everybody else you know you learn from all your experiences um you learn or you get burned and so um that's what i've tried to do i don't have any one thing or two things that that really stand out i mean i'm still doing well overall but like everybody

else um you know my ethereum and my my bitcoin have gone down a little bit yeah so i believe this uh that makes this uh your first cycle so congratulations you get your first cycle badge uh 17. i was around in 2017 but actually i think this is a lot there's some similarities but there's a lot of differences sure yeah let's go into that what do you think are the differences that stand out to you the most you know in the ico craze and the first real push of bitcoin that's where you started to get the early interest but there weren't a lot of mainstream applications there were there were companies trying to do some things with smart contracts crypto kitties among them and um there were a lot of different ico type approaches but nothing really was

already mainstream and that that was the big difference you you know it was just about people getting into crypto not crypto getting into people's lives amazing and uh i i'm wondering how have you like how is your interest developed uh like like i kind of alluded to i remember talking about euler beats when you when you came on and uh just we were generally super interested in the way that artists can receive automatic dividends how have your interest in crypto developed since then no i mean it's just continued right i mean i think you know where i got a lot of flack early on was you know the focus on the utility of of whatever it is i was looking at you know what what how was it going to be used what was the value proposition and like you just mentioned what was exciting to me back then with

nfts was the fact that artists could receive royalties you could create a textbook nft you know we did a lot of things with nfts with the mavericks with mavscollectables.com um there's just a ton of applications but there's got to be utility for them they can't just be about speculation and i think when you know there's an old thing everybody's a genius in a bull market and so when everything was going up everybody was smart right when everybody's smart everybody thinks they can do anything and not lose money and then that obviously changed multiple times all you know over the past 15 16 months and so now you know you i continue to look for applications but you know it's it's interesting that you know my focus now so what's really changed over the

past 15 months is you know we were looking at d5 there was the d5 summer and then there's d5 and you know but there was really defy on just a couple blockchains right mostly ethereum is where all the action was and there was a lot of subsidies again it's like the you know people were approaching crypto and d5 in particular like they did software applications um where they were you know back in the day vcs would subsidize um apps or applications and offer them for free and knowing that they were losing a boatload of money just to get users to try it and we saw that with defy as well where you know every you know on ave wherever you went there were all kinds of rewards that

were just handouts that somebody had to subsidize and that subsidy was coming from investors they were coming from you know misperceived tokenomics or they were coming from you know just buyers who were just wanted to play the game think you know trying to earn as much um just trying to go as dj as they can and you know what we've learned since then you go to ave now and you see what the real rates should be and it's all algorithmically driven without the reward and once you took out the rewards the whole perception of d5 changed and i think that's also one of the reasons why defy has kind of survived a little better than c5 has survived because c5 is a centralized business has tried to run with rewards more and subsidies more and that catches up to

you real quick yeah sure of course and uh as the nft the steam in the nft market has really dried out and like like you've alluded to the the yields have gone down to their very base primitives mark is your conviction on crypto shaken or are you going to hang out with us during the bear market no it's not at all it's not shaking at all i mean i think this is a good thing it's painful to lose the money right but but it's really really good because you know one of my favorite sayings is first there's the innovators then there's the imitators then there's the idiots and what what's been happening in crypto over the past 18 months or actually the past six months i should say is when something worked on ethereum then it went to an l2 of ethereum so you saw

defy go from ethereum oh it's too slow it's too expensive so then you go to an l2 of ethereum well it's cheaper now that's a good thing right then it went to another chain and the same you know and then another chain and another chain and another chain sounds like a song it sounds like um something dj khaled would do and another change and another change you know um but what would happen is because blockchain for the most part is a zero-sum game there's not a whole lot of differences we can argue the try the trilemma right and the nuance differences among all of them and bitcoin maxies argue a whole different story but the reality is if those chains don't get enough volume they're gone

and because a lot of the competitive aspects of compa you know ethereum competitive chains are cheaper and faster you've got to get a whole lot of transactions in order to in order to survive and so what they all did and they all did the same thing let's go get defy so they all put together grants and funding and and subsidies to go out and get lps and others that excuse me would support you know defy on their platform defy on blockchain x you know fill in the blank and then they did the same thing with nfts we're gonna go get this celebrity and we're gonna go subsidize it and we're gonna put it on um our our chain and that's how we're going to get enough traffic and and we're going to show off why our chain is

better and then they go through the long list of you know blockchain x maxi you know things they would say and what they found out very quickly is that doesn't work when you're a copycat even if you have your checklist looks a little bit better it's really really hard to get somewhere and so all that said we've gotten to the point now where all those chains realize they're in deep [ __ ] you know there's just no there there you can't just you know and these are multi-billion dollar cap companies now obviously the market caps of the companies are are convoluted and kind of configured the way you want them based off of your float versus your total allocation or your total um mint but now what are they going to do

and so you're starting to see some of the the fissures in these chains that really don't have any traffic and really don't have anywhere to go and to me that's just part of the cleansing that's natural i you know i've said before that this is a lot like the early days of the internet and when we went you know in 95 94 95 you know my company we started streaming we were the first company to do you know commercial streaming and this and that and it was a race because the next thing you know there are 20 companies 30 companies 40 companies trying to do streaming and you know 39 of them died or 35 of them died and you saw the same thing and then when the 2000 in 2001 hit and the bubble burst

95 of companies were gone but the ones that were able to survive are still crushing it today the amazons etc google et cetera um because they had good valid business models and that's what we're going to see right now with crypto crypto you know has got a lot of things that it can do really really really well but we we've seen all the money and brain power really geared towards defying nfts and for 99 percent of those apps it's a waste of brain power you know it's not you know what's the difference between you know defy on blockchain on ethereum and polygon and all the others

not a lot and maybe just the subsidies and like we saw with anchor you know those subsidies just you know if you don't earn the money like we saw with axe and i'm an investor naxi you know and i told him unless you're able to create enough of an economy that you're able to create productivity meaning you have enough users that you can sell ads and sponsorships and nfts and earn income from all those things in order to buy the um the slps and and the tokens the actual tokens from users meaning you know it's earned to buy them then you're going to run into problems and so we went from play to earn being this great thing and you know what helping people in the philippines to

okay it's barely hanging on and no new play to earn um platforms have succeeded that i know of do you guys know of any that have worked no yeah actually been it man yeah and actually got that if actually would have gone in and they still can do it and i hope they do and even though i'm an investor i don't really have that kind of connection with them just to tell them what to do but you know if they're out there selling ads and sponsors sponsorships and then taking that money and buying tokens from you know the people who are playing to earn so that there's some you know there's a replenished economy that works you know you know if i buy one of those nfts you take my money you buy some sop etc you know like anchor they wanted to be able to do loans to pay for the 20

but they just kept on going subsidy subsidy subsidy instead of just saying okay at some point hey guys we ain't doing [ __ ] for loans you know we generated 150 it's like what you pay lps you know um on different platforms right with their native token you can pay a minute but if you got no one to buy them you know and that's what this is all about and that's where a lot of this has failed there's got to be second order and third order and fourth order demand particularly for nfts that's like with the mavs we used nfts as a reward for going to a game you have to actually attend a game and you're only allowed to get one it's free you go to the game your reward is this nft and if and when you have these nfts we'll give you

discounts we'll do these other things and if you miss a game you can buy one from somebody else and collect them but because we gave away for for free there was no expectation that a b or c you know we we didn't i didn't have to worry about whether there was a second order a third order or fourth order purchaser in order to make people feel good about what they got when they went to a game and now when you put out an nft unless you're really lucky and you're the board apes or crypto punks or whatever and there's you know hopefully sustainable what are you going to do you know you get people excited in your community to buy the nfts and then what yeah no exactly so okay so we had a

investor on recently who talked about like you know 2000 2020 being sort of a high conviction crypto rally and then seeing similar to what you said 2021 was a lot of copycats low conviction rally it just kind of wasn't there and it just the whole thing ran out of steam and i think we understand that because we're in the crypto space we see it the way you do mark and by the way i love that you're doing stuff with the mavs with nfts and smooth love potions you know what that is in axi like the level of detail you go to just always blows me away but um how do you explain this to someone who is not in the crypto industry who doesn't see this potential no like back in the day i'm old enough like um i remember so we started streaming in

early 1995 and we would have we had a local radio station in dallas and i would tell people look if you've got your computer and you want to listen to this local radio station and get dallas sports anywhere in the world then this is what you have to do and back then you had to have a dial-up modem you had to download a tcp client you had to download a client from an isp service provider you had to pay your monthly fee to that isp service buyer then you had to download the streaming media client then you had to go to audionet.com and find your cubs game or your dallas station or whatever high hassle factor and i would say that to people and they would go you're out of your mind i'll buy a radio you know or i'll buy a tv what do i need

this [ __ ] for and so it wasn't that i would that didn't work trying to explain how what worked was i want to listen to the cubs game and i'm in dallas and the only way i can listen to the cubs game was to go through all this hassle or i'm at work in dallas and i want to listen to klif was the first station that streamed full-time and i want to listen to norm hitskis who was a big sports broadcast still this big sports talk radio guy and so i don't have a radio or i'm not allowed to have a radio on my desk i can't have a tv on my desk i got my pcs and these cheap little nine dollar speakers so i can or headphones and i can listen while i work that was a reason for them to go through

the hassle crypto is the same thing right there's got to be a reason for regular people to want to use an application it's like why would you why did you go to the app store for the first time to download your first app whether it was on an android or it was on an iphone there had to be reason you know you could have just used the default applications but there was something else you wanted to do whether it was snapchat or whatever you know why are 90 of the apps on your phone unused but you downloaded them right why do you just use the 10 cryptos exact same way there is no difference why do you use default well if i want to

you know get a quick loan and be able to lend money and earn some money you know some money on my my deposits even though it's over collateralized if i need quick money and i have a credit card against it i can just transfer it and it's easy right there's a lot of simplification versus dealing with the bank or if you're unbanked if i need to do even with lightning if i want if i'm with bitcoin and i want to do some lightning or tip somebody on twitter it's easier that way um maybe not easier compared to cash app or venmo but that versus a lot of traditional business approaches and so there was there's a reason that you use it there's it's compelling it's the path to least resistance that's what we need now for crypto right we don't have enough of that and

so you know at some level maybe the you know the bear market was uh was coming no matter what we got a little ahead of our skis but but also mark there's like this backdrop man we're looking at max so we've been through spare markets and crypto you've been through a bear market in crypto right um people like krypto natives have been through many of these and they're always painful um but this one is a little bit different from like a macro economic landscape right like we got inflation that's 8.6 man we're headed towards a recession like what does all of this mean i don't think it really means much in terms of crypto unless there's an application so we can go both ways so first of all look at the stock market it's gotten tech stocks in particular high growth

tech stocks have gotten torched even worse than crypto right i got tech stocks worth down a whole lot more than my ethereum or my bitcoin during my polygon right they just gotten torched why is that because it went too high you know when interest rates are basically negative and you can get as much capital as you need or come you know into some people can get as much capital as they need to go out and buy stocks thinking they're going to go up why wouldn't they you know you're borrowing at let's say one percent and do you believe stocks will go up one percent sure so yeah you know it was 50 a year ago but it's 300 today so what you know everybody's doing it it keeps on going up why would it go down well

you get to the point where it's just too damn high just because it's down 80 or 90 percent doesn't mean it's mispriced today it may mean that it was mispriced last year and with a lot of this that's what it was the money was so easy it was so available that prices went too high and it may well be that even though we're down you know enormously that we're in the right place in terms of pricing and we're finding the right place and the problem isn't now the problem was last year in the easy money and so to your point in terms of inflation you know i don't necessarily think well first there's two when you talk about inflation with crypto i always have to remember there's two worlds of inflation with crypto there's the real world and

there's the bitcoin maxi world right people just deal with it you know as best you can and even though it's painful and you know i'm old when i came out of college the inflation rate was not quite as bad now but the unemployment rate was more than 10 percent in this net and so it was a struggle just like people are struggling now um and when i say you're old you're supposed to say no you're not but but the point being that peop crypto isn't impacted any more or less than anything else and it's not going to change what people do any more or less right now i'll say that

by if interest rates go keep on going up and that's translated into savings accounts that you know and all of a sudden you can get a cd a six month cd for four five six percent or something tax free for four or five six percent that's going to impact people's decisions because you go from okay i might be able to make some money in crypto last year and i can make my 10 on my usdc last year right and that seemed to be relatively safe or i'm willing to take more risk to hey i don't have to [ __ ] around and i can make five percent on this cd that will impact the money that comes into crypto and stocks for that matter then there's the bitcoin maxi side of it with the bitcoin oh you know bitcoin

that's a hedge against inflation yeah i don't see that working you know i always analogize bitcoin as it's a better version of gold it's a digital version of gold and i truly believe that and all the gold maxes think it's a hedge to inflation yeah not so much if that were the case gold wouldn't be worth 17 000 18 000 wherever it's at it would be 30 000 you know and so there there was a lot of hope that bitcoin would do this or that now where bitcoin and gold do offer a hedge is in countries that are not reserved currencies because the world uses the dollar you know if you're in pick a country right um zuma zuma

what was the um zumunda right what was the one with eddie murphy coming to america yeah yeah yeah yeah yeah yeah picking on a fake country yeah picking a fake country right um and they have hyper inflation owning bitcoin or gold is much better because it's going to it's going to fluctuate relative to the dollar or let's say the euro and it's going to be stable and it's going to look like a really good hedge against that zumundo currency but then so would the dollar you know so you know i think the bitcoin maxis got it dead wrong um and i think part of the challenge for bitcoin is you know even with the lightning network improving and becoming more popular there's not enough utility but that's the same problem gold has you know nobody needs gold jewelry people

like gold jewelry and want it um but they don't need it and so there's a utility issue with bitcoin but that said light gold it's a good store value it's a better store value um as you know when you're trying to be diverse in your portfolio and that's why i own it you know because i think even i i have no idea where it'll go i have no idea how long how low it'll go but i do know that um once there are applications with smart contracts not on bitcoin but across crypto that regular people use and figure out just like streaming was a better version of getting audio and video than traditional media was when there's better reason to use crypto

applications that's when it takes off what do you like better mark uh ether bitcoin which one if you had you know if i had to buy one today for a month i'd probably buy bitcoin because there's not um there's not that push of applications right now i mean i'm trying to invest if you got one that you know is a business application that replaces not just fintech but let's just say something you do in the office you know here's the way we've been doing it i use this app all the time and you know it has nothing to do with fintech it has nothing to do with collectibles this is just i replaced i'm using smart contracts on ethereum or whatever blockchain and it's made my life a lot more efficient and a lot

better when those start to happen whichever blockchain they're on bam right then people start saying oh i got to use it's just like you know my 13 year old wants snapchat damn we got to have snapchat gotta when i turn 13 i gotta have snapchat you know i gotta have instagram or whatever it is tick tock you know what made people download tick tock why does every kid use tiktak we it doesn't have to be social media and i i think it'll come from business first but we need that business application the decentralized version of quickbooks you know the centralized version of whatever that is a crypto app that is just better and when that happens

boom because then people will start saying well if it worked for i replaced docusign as an example you know um or i've got um quickbooks decentralized quickbooks which allows me to to buy or sell or e-commerce even like i did this talk at the university of chicago and i only you know these are mba students um and i was like how many of you have used crypto and about half had i'm like how many of you have used a wallet a crypto wallet to buy something and about half the half did or poor other people i'm like of those of you who did wouldn't it be a lot easier if you could just go to an e-commerce site connect your wallet buy what you want click it sign it and have a lower transaction fee and it's just paid like that and if you were a

vendor wouldn't it be easier to just sell knowing because you get that cash immediately and so you could probably sell for less with less friction yeah of course but nobody's done that yet you know we've looked at it with the mavs and you know but there's so many everybody tries to go through traditional means that to connect your your e-commerce through bitpay or whatever through a bank and that just gets convoluted ave is the leading decentralized liquidity protocol and now ave v3 is here ave v3 has powerful new features to enable you to get the most out of d5 including isolation mode which allows for many more markets to be launched with more exotic collateral types and also efficiency mode which allows for a higher loan to value ratios

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products prop products that we had as a crypto industry in 2017 and how they basically weren't any products uh and then went through a bear market and came out and and you know how the conversations that the industry have had in 2021 or where in 2017 it was almost basically just bitcoin that was a household name in 2021 a lot more things became household names ethereum broke into the mindshare nfts and d5 broke in because we had some semblance of realness yield and defy people like the nfts were starting to break into commerce and some of the some of the components that you uh just talked about just now we we did just hear stuff like that announced out of things like stripe for example stripe is getting into the

world of web 3 crypto payments it's still so early and everybody's into crypto payments at some level sure right paypal etc none of that is first first to market they're all we're big we got to be there and none of that is original and none of that is something that if you didn't already you know know you you couldn't find you could already use lightning network you know there's a dozen different apps apps you can use to do transfers you know it's those things that we go [ __ ] that's you know i could really use that i got explain mark you know someone calls me explain to me how i make this work because again i'll analogize when we started streaming business i would get

the calls all the time i want to listen to the cubs game i had somebody from microsoft call me and say how much will it cost us for you to start broadcasting the nebraska nebraska football and basketball games on audionet i'll pay for it all just so me and my friends can listen to the games online in the state of washington right you know that's how compelling it was and so what do you what do you think is going to compel us in the future in the next cycle when we get through this bear market what's the next thing that becomes a household name out of crypto what are you really looking at right now market i don't know yet i really really don't if i did i would start it yeah you know um i i that's what i'm scrambling to find out there's just too much focus like you

said on payments or defy or nfts you know i i'm talking to a company to do nfts for and i've talked about this before um for textbooks for uh college textbooks because if you think about it you take an nft you can incorporate a kindle reader reader into it you take the um digital text of the book and you know you check for the nft and that unlocks the digital reader if you own the nft for the textbook and buying and selling them is going to be a whole lot cheaper than creating selling shipping reselling textbooks where the publisher only get and the author only gets paid once and so you know now it's hard it's hard for those publisher industries to

disrupt themselves that's not something they're good at but it's conversations i'm having that's not going to get everybody to change over but you know it certainly could get it could be a start with college kids are all using it and that's a better way to get textbooks um you know people are trying to do social networks um icp is trying to do it their way but it's hard because it's it can't just it doesn't benefit you just because it's decentralized or it's crypto one of the better because it's better one of the differences we've seen in this bear market at least so far is like even though prices are down the builders are still here and i'm wondering if you saw that yeah for now do you think that'll last or do you think do you think that yeah how long do you think

this bear market will last then and like is this going to be a long dark winter no it lasts until there's a a catalyst and that catalyst is going to be an application or we get so low people go [ __ ] it i'll buy some i'm almost there are you there it's like stocks right i look at stocks and i'll look at the market cap i'm like you know is amazon i own a bunch of amazon but should i buy more amazon it's a trillion dollar market cap that's not a [ __ ] price right there there's some other companies where you look at and they're like it's a 250 market cap plus some debt now because they borrow cheap i'm like if this were coming public i mean i'm sorry if this were being pitched to me as a private company at this valuation on shark tank would i

invest in it and if the answer is yes i'll buy it right and so and if you think back whether it's bitcoin ethereum polygon matic um icp any of them or even the new ones like ape and you look at the market caps and you see it's a billion dollar plus market cap or 6 billion or 8 billion or 40 billion you don't look at that and go that's cheap because if you remember back to you know d5 summer these things were selling for less than a penny and their market caps were in the hundreds of millions and then you look at some things like alcx and you look at um uh what are some of the others that are deep um uniswap or sushi swap rather and even unis particularly sushi swap it's

got like a 250 million dollar market cap and then you look to say why is that relatively cheap right compared to everything else well because there's no there's no utility there you know you you get you get paid it if you're an lp but then what who's going to buy it from you what's the reason to buy it from you and so what happens is it's it's not so much about the builders yet but what happens is you'll see a consolidation you'll see somebody who's market cap if cardano you know everybody likes to pick on them including me um but like they could use what market cap they have or what cash they have and start making acquisitions and then you take the builders and you start consolidating them around what's what's the name of their um smart

contract like pluto or pluto or bluto or whatever i i don't know is it plutus yeah yeah something like that oh see i was close um but now sudden you start consolidating those developer communities and user communities and they become a little stronger by doing that type of roll up and who knows what's going to happen with near chain who knows what's going to happen with polkadot you know but they all haven't you know high expectations um but so it's not cheap yet you're saying crypto's not cheap yet you want to see it cheaper before mark's piling back in yeah i mean it it's not it's not cheap yet and i think you know i'd rather get with somebody who says okay let's do a roll-up you know let's combine a bunch

of these you really don't have you take zilkwa you take this you take that and you match them all up together and you do a token exchange we do a new token you close four out of the five block chains and you pick whichever one you think is best which has the best applications you allow people to bridge over one time and you know now all of a sudden your user base is 10x now you still have a problem of better applications right you still have to have some some reason that people want to use that blockchain but at least you may be able to have um a better um community to come up with an idea because otherwise you're gone are you saying that you're looking perhaps towards a world of like mergers between protocols so protocols can stay

alive it's like hey like we're all down bad but if we band together we're gonna be able to stick it out is that kind of what you see on the horizon in the bear market that's what happens in every industry and so okay so if we're looking across the sectors there's so many sectors in crypto there's d5 there's nfts and you've named a lot of layer ones and you're also seemingly hot on layer twos let me change that david there aren't a lot of sectors there are different blockchains with apps that have been written on them using smart contracts right yes and there's typically just two verticals d5 and nfts well okay but there's defy application tokens like alchemics right you named the alcx token there's defy apps that exist on chains but then they're

actually the chains itself and those can be like divided into two sectors then we also got nfts well like of all the sectors in crypto like like layer twos versus layer ones versus defy tokens versus nfts what are you really like optimistic for the most you have an opinion there yeah i mean look all of them have potential that's why they got all this money all of them have if you put together a checklist like they did um all of them have a reason why they think they're better and will succeed you know um zero proofs you know can encapsulate and it's 250k or 256 characters and you just plop it on the ethereum and you get the benefits there you know um optimistic roll-ups they've got their way of doing it right

where you check for fraud and you know seven days speed whatever right i can see value for both like an optimistic roll-up if i were going to start in a health insurance company that was decentralized so that rather than having somebody approve each um application for for reimbursement or approve each claim i would have a thousand validators right and um i forget what they call the people who check for fraud right the checkers right and all of them would have to put up some money to get their training but they would get a piece of each claim right and so they would earn it and then the the fraud checkers would get rewarded where if you know they find fraud

they get the stake from that um validator you know and you guys know how that works right so that's an application that could work but that's the application that's going to take five years to develop and 200 million dollars or more to put together and someone and then on top of that the money for the insurance claims and the capital that's required there but that's the type of thing if you have an application that is specific to this features and capabilities of each of the the the enhancements right whether it's zk or whether it's optimistic or whatever yeah i'm very bullish but it's the applications that will make it work every so much of this the first pass was we're going to be faster and cheaper

than ethereum well guess what when there's not a lot of transactions ethereum gets relatively cheap it's not cheap but it is relatively cheap and you've got polygon and others who have just added zk's and added um optimistics on on top of what they're doing and so it's just there's just a lot of people competing for those builders and those builders are just coming up with the derivatives of things that are already being done and when it's only about the checklist that's the hardest thing to to be successful with you know it's hard to compete when you know and that's 7-eleven i'm 7-12 no no not web 3 web web 5. yeah i saw

this recently that's a whole nother thing right web 3 is confusing where 3 should never have been called web3 really you don't like the narratives what narratives do you like what do you do mark that hurts my heart yeah i mean look it's not web 2 and web one right web 3 makes it things like it's a new internet it's not a new internet it's a platform on top of the internet right it's a better way to do a lot of different things and that's what it is that's why i just call it crypto as opposed to web3 and what the [ __ ] the metaverse [Laughter] right i mean they've been around forever you know second life and all these other ones that are around in the early days of the internet you know and anybody can create one there's no standards for

interoperability people look at there's companies that i invested in that that sold real estate against my you know feedback on in meta verses the worst investment ever do you think that's the problem like did crypto get too buzzwordy what's that did crypto get like too buzzwordy and just like silly is that what happened with no the internet was the early days of the internet was the same thing right you know and even before the internet right on prodigy and copy serve chat rooms on aol right chat rooms and arl were the best thing in the worst thing you know all these kids were had all went through all these bad things

because of chat rooms cat rooms just that's the multiverse circa 1990 you know and it's just a bunch of people coming together you give them an avatar they don't have to be themselves but like any community some people try to dominate right and other people try to manipulate and other people try to monetize and when people feel left out and don't benefit from them they go somewhere else or stop participating all together and that's a challenge like i haven't gone on to central land a lot maybe i'm getting a wrong but when you go around to central land you see people playing poker and gambling and that's it did i miss something yeah it there's not a lot going on in the metaverse there's a lot of future

potential and hope in kind of property rights in the in the metaverse but there's not a thing everything is just a click away yeah yeah you know you're next door to the empire state building hey i got my little piece of land next to the empire whatever right okay mark okay so there are a lot of uh crypto people in crypto who are down bad right now and i don't know if you've ever been down bad in your career but like okay well tell us about this because it doesn't feel really great and there's a lot of people sad um depressed like in just the you know one of the five stages of of grief uh do you have any thoughts for him i mean look i've been broke and sleeping on the floor

you know i've been i've lost i remember having thirty thousand dollars and a lot of that was bam gone um in my company i had literally eighty four thousand dollars in the bank and my receptionist stole 82 000 of it what so i get a call from the bank that's my company micro solutions 84 000 in the bank we only have four employees one of them was a receptionist and one of her jobs was just to take the accounts um our our um payables right put them in an envelope take them to the um post office and mail them and then answer the phone yada yada right that was her job i get a call from the bank mr cuban yes we have this young lady who just drove through the drive-in

and she these checks that she was cash in she had taken the the check and whited out the payee and wrote in her name and i'm like you didn't cash them did you yes sir we're a bank that's what we do 82 of the 84 thousand dollars i had god doa gone and we had to work with all those vendors and it took us well over a year to pay them back just to get back to ground zero with them um and break even and so look i i've been there and that that fear and agony of what you're going to do next is awful mm-hmm mark as we as a a lot of people are questioning their conviction in crypto here so leave

us on a high note what's something that you're paying attention to what's a project that you're bullish on what's something in the crypto space that still keeps keeps you excited in these dark times believe it or not i still like refi right i still like all the stuff with um tokens for um carbon carbon offsets and i still buy them i use them i've gotten crushed with klima um and that's okay i actually i bought a ton of beat bct and this whole thing with vera blew up and i got a whole bunch and it went down from eight dollars to 1.90 now and i just burn it which is my carbon offset for my own personal footprint use and then i also convert it to klima because of their treasury and i'm betting you know with klima to me it's like it's an index of

different carbon opportunities and that's not a standard defy application maybe it'll fail miserably i hope not but to me i used to buy carbon offsets from a broker and it was a pain in the ass it was hard right now i go on polygon and when i want to burn more i can buy more bct and i can just burn it that's my carbon offset it's the easiest way to do it not everybody cares about you know offsetting their carbon footprint i do you know to me that's just a perfect app for it doesn't mean it's going to go up no but my worst case is i've done a tiny part for humanity now people will argue that it's not great carbon offsets you can do better all right fair enough but it works you know it does what i'm

looking for to do and as it gets better it'll get better over time so that that's one application um other than that i mean literally scouring for business applications there's there's another one um where we're looking at taking tokens and integrating them into apple wallet that i just invested in so that i can take a mavs nft it can be put into an apple wallet you just scan it and now it's the ticket for a mavs game or an event like pop is trying to do but hopefully a little bit simpler and with um one of them all right you know things we're already doing so you know there's there are things to get excited about the challenges and why i'm not just diving in and buying more ethereum or or in particular is i don't see that one big

breakthrough macro application that like streaming was in the 90s i think there'll be one you know like i said you know using optimistic roll-ups somebody puts together an insurance company great you know somebody whether it's medical insurance health insurance or whatever it may be there will be applications like that because there are better ways to do it and i also think and here's here's the positive thing right let's look at decentralization dows and decentralization right we haven't started to see the thrust for companies that are organized around crypto yet we've seen companies that use crypto to create applications but you know a lot of people downplay decentralization dows because they're like what's the

point but the reality is companies can't just start becoming using decentralization because they're centralized you're not going to have a health insurance company all of a sudden offer decentralized insurance in the example i gave because they can't adapt their company to that we're starting to see and i'm starting to see slowly but surely companies that are initiated and start off decentralized and integrate their employees whether it's using dowels or just tokenomics but you make it so that the decisions are decentralized so that the utilization is decentralized you know using um nodes to reduce costs because anybody who's done anything um centralized using aws for

applications it's expensive as [ __ ] right and if you're able to create an application that uses the node where somebody can use their pc as a storage facility kind of like coin or you know some of the others but integrated into apps in less expensive ways right i'm just riffing on this but you get my point right there are ways that better things can be done using crypto we're just dipping our toes in and again it's not unusual it's not unusual you know companies went public with nothing nothing and crapped out like that but the good ones stayed same with crypto all these apps all you know these tokens stop thinking about you know how you

know what well i'm trying to think you know all the terminology and all the ridiculous terminology in the crypto world sir and friend and dude but you know stop thinking about the community and how that much community value the community creates because you think that means there's a lot of buyers there stop thinking in terms of the number of buyers start thinking in terms of the utility would you use this on a daily basis yes or no i can find reasons to use defy on a daily basis in some of my businesses i'm just waiting for if someone had an imp had an interface between quickbooks and you

know pika ave and that's what i told them to do i i told those guys i'm like you know you you need to create an interface with quickbooks so people can push in their cash and withdraw their cash where now you're starting to see applications that will stream um usdc to pay workers so they're paid in real time that stuff is cool right i can see applications there but when you're making a decision to buy don't invest in a token or nft because you think there's a community that's going to buy it from you invest in it because either you like it as a collectible or because you like the utility and you would use it if you would you if there's an app on crypto that you'll use

and not just because you bought the token right but because you have a real reason to use that's what's going to bring crypto back and that's what's going to accelerate it and that's what's going to crush the hell out of you know web 2 um when there are applications that are better used with crypto and i'm i've got a lot of money that says that's going to happen that's it guys that's the message from mark cuban is the thing that's going to get us out of the crypto bear market is utility so mark are you going to be spending the the bear market just trying things and looking for that utility yes continuously you've got look if there's something you do at work and you think to yourself if i wrote a smart contract i can do it better using crypto that's what i want

to know if you can go into a company and say look at all this time and money and process your wasting here's how you do it using crypto build on smart contracts yes yes that's what i want to know because those are the game changers you know trying to come up with the next instagram because it's decentralizing your pissed about or twitter and it's decentralized because you're pissed too they let on or don't let on you're not going to get a network effect based off of that it's got to be something that is so compelling that people go this is great kind of like tick tock yeah you know but even tick tock people think it came out of nowhere they spent hundreds of millions of dollars in advertising

just to get it rolling they bought musically for half a billion dollars so that wasn't cheap so it's got to be so like i started this company we went out we bought generics and we sell them at cost plus 15 percent we're already past our two-year projections and we've been doing it for five and a half months you know how much money we spend on advertising oh wow because we don't need to if you need a particular drug right and we sell it and we're saving you 80 you know what the first thing you do is you tell everybody you know who also takes that drug and you tell everybody you know that you know needs cheaper medications which is everybody to try our site and when then you

realize that we're cheaper costplus drugs.com is cheaper than your insurance co-pay for the drugs you have to take you're telling everybody you're going on every facebook group twitter you know and that's that's who promotes us uh crypto needs the same thing where it's again like streaming when we started audio net did spend ever a nickel in advertising ever because if you wanted that that cubs game or that cowboys game or that mavericks game you know if you were a fan and you weren't in the local hometown we were the only way you could get it so you told everybody that's what crypto needs d5 was like that for a while right and it has this place but it's kind of stabilized nfts are like that in terms of they provide creators um royalties

for the creator economy but we need the business version of that that's what we need there we go guys that's what we got to look for is utility by the way mark i want to thank you for uh for cost plus it's uh it's helping a lot of families and you're right about that man i've seen so much goodwill like a reddit post everywhere in the communities just like this site saved me tons of money and it helped my family get through a tough time so i appreciate that yeah i think we need that in crypto too but man it's always a pleasure to talk for with you and i'm always so impressed at how deep you go in uh you know in some of these these projects so i look forward to touching base with you sometime during the bear market and uh come back soon if you will

hopefully it will be the start of the bull market and talking about how everything's going straight up so awesome appreciate it guys always enjoy the show all right take care bye mark hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our daily newsletter podcast and community as a bankless premium subscriber to get the most out of your bankless experience you'll get access to our market analysis our alpha leaks and exclusive content and even the bankless token for airdrops raffles and unlocks if you're interested in crypto the bankless community is where you want to be click the link in the description to

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