Does the past week have you worried about the future of cryptocurrencies? If yes, then Mark Cuban’s recent comment can help shed some light on where the industry is headed. The Billionaire investor made some interesting links between crypto and how internet projects fared during their lull phase.
In a tweet, the Billionaire investor turned crypto advocate, Mark Cuban, believed that crypto is going through the same phase as the internet did in the early 2000s, where new blockchains were just mindlessly built to copy larger projects without offering much utility.
“Crypto is going through the lull that the internet went through. After the initial surge of exciting apps, NFTs, DeFi, P2E, we saw the imitation phase as chains subsidized the movement of those apps to their chains”.
Popularly known as the ‘dot com bubble crash’, technology stocks, and by extension, the internet, suffered a massive sell-off during 1995-to 2001 The growth of the Internet had created a buzz among investors, who poured funds into startup companies. Many of these companies had poor business plans and were built mainly to capture the Internet hype. Once the Internet bubble burst, several projects shut down, and eventually, those that offered a stronger utility remained.
Mark Cuban said that for crypto, smart contracts were a driver for growth in the saturated market, and projects utilizing the same to improve their business model could outlive the current phase.
“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 this make it fungible?). We need smart contract apps replacing [software as a service] apps.“
Mark Cuban’s comments come after Bitcoin suffered its fifth straight daily correction on Monday amidst weaker global markets. At press time, BTC traded at $31,000, down by 19% for the week and 50% from its November 2021 ATH.
Ripple’s Brad Garlinghouse says 99% of crypto will fail
Mark Cuban’s comments bring back echoes of Brad Garlinghouse’s take on the state of affairs in crypto. In a 2019 Bloomberg interview, the Ripple CEO suggested that a majority of crypto projects would die out and those that solve real-world problems would survive.
”I think anytime there’s a new market, there are a lot of people who run into that market to show that they can solve a problem and deliver customer needs. I have said publicly before that 99% of crypto probably goes to zero“.