Mark Cuban is reliving the internet boom when he looks at crypto. The ‘consolidation phase’ is coming, he says

Billionaire Mark Cuban is famous for many things, being an investor on the TV show Shark Tank and owning the Dallas Mavericks among them. But decades ago, Cuban became an early face of digitally created wealth, and during the pandemic, he has become a vocal advocate for crypto as something worth taking seriously.

Cuban, who made his (first) fortune in the Web1 ’90s, sees the same thing happening now in the crypto space.

“Crypto is going through the lull that the internet went through,” Cuban tweeted on Monday. “The chains that copy what everyone else has will fail,” he added on Twitter. “We don’t need NFTs or DeFi on every chain.”

After a recent surge of “exciting” blockchain-based innovations in the crypto space—including non-fungible tokens (NFTs), decentralized finance (DeFi), and play-to-earn applications—there’s been an “imitation phase” where new blockchains copy popular, existing applications and bring a variation of the same thing to market, Cuban said in his tweet.

He compared this to the dotcom boom in the 2000s, when internet startups behaved similarly, launching copycat products and promising returns, before the bubble burst.

Cuban told Fortune that there will be a “consolidation phase next,” where copycat blockchains will die out. “There will be blockchains that, rather than die, get acquired or merge.”

He said he sees the biggest opportunity in how crypto companies and blockchains use smart contracts, or collections of code that execute a set of instructions on the blockchain. Businesses that use smart contracts to improve productivity and profitability will gain a competitive advantage, Cuban tweeted. “The chains that realize this will survive.”

Cuban built his wealth when the web was in its relative infancy in the ’90s, first with the sale of his computer consulting firm MicroSolutions, and later when his internet radio company was acquired by Yahoo for $5.7 billion in stock. He now mostly invests in the crypto space, with an extensive portfolio of blockchain-related companies and cryptocurrencies.

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