Mark Cuban loves cryptocurrency so much that he continued to advocate for it as an alternative investment after someone hacked his digital wallet for nearly $1 million. The multibillionaire owner of the NBA’s Dallas Mavericks is famous for his “no risk-it, no biscuit” business philosophy, and his allegiance to cryptocurrency is evidence of that mindset.
Like anyone who holds cryptocurrency, Cuban keeps his funds in a digital wallet, an online repository that acts as a bank for cryptocurrency. As is the case with any bank, the funds Cuban deposited can remain untouched in his digital wallet for months or years until he needs them. One of the digital wallets that hold Cuban’s cryptocurrency is known as MetaMask.
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It allows cryptocurrency holders to easily buy, sell or transfer crypto from their mobile phone or desktop. The drawback of such a system is that hackers have developed Trojan Horse MetaMask app downloads that look and act like the real thing but also give hackers a backdoor into the user’s digital wallet.
These hacker apps function so much like their legitimate counterparts that it can be difficult for users to realize they’ve downloaded the wrong app. All it takes to be exposed is for a user to install or reinstall the Trojan Horse/hacker app on their mobile device while thinking it’s the real one. After the download, the hackers are inside and can download as much of the user’s cryptocurrency as they want.
The flexibility offered by digital wallet services like MetaMask is exactly why users love them. It allows crypto investors to hold as much cryptocurrency in any form they want — Bitcoin, Ethereum or Dogecoin — and easily convert it into other denominations or transfer it to a fiat currency like U.S. dollars or euros.
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The problem is that if the wrong person gains access to the wallet, there is no recovering cryptocurrency once it has been hacked. In Cuban’s case, he lost a mix of Stablecoin, rare Ethereum coins and other cryptocurrencies worth an estimated $870,000 before he realized the error. He was able to transfer the remaining balance to Coinbase before the MetaMask hackers did any more damage.
You might think that after losing nearly $900,000 to a well-organized cryptocurrency hacking scheme, Cuban would go cold on crypto and divest. But that didn’t happen. Cuban switched the funds from the affected digital wallet to Coinbase and remains a big proponent of cryptocurrency.
Cryptocurrency is volatile, but it remains an intriguing prospect for investors like Cuban. They see it as both a hedge against inflation and the wave of the future. It’s much easier to be philosophical about losing $870,000 when you are worth billions like Cuban. But Cuban’s willingness to stick with his instincts on cryptocurrency speaks to his risk tolerance and belief in himself as an investor.
Cuban’s crypto investments are part of a well-diversified portfolio. Any investment carries risks, and the more volatility or risk associated with it, the higher the potential profit. The key takeaway goes back to a fundamental rule of investing: Don’t play with more money than you can afford to lose.
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