long suffrin' boulez fan wrote:Could someone please explain to me what’s going on between the NBA and Spencer Dinwiddie?
All I know, from the wiretap article, is that he wants them to deliver his paycheck as a digital token. I have no idea what that means.
As far as I've seen, it's not that he wants to be paid in cryptocurrency, it's that he wants to use his NBA contract effectively as collateral in a cryptocurrency (not bitcoin - there are loads of cryptocurrencies) scheme. Basically, investors give him money up front and he guarantees their principal and interest using his NBA contract based on their buying cryptocurrency backed by his contract. He gets the money up front that he can, in theory, then make more interest on over time investing elsewhere while his investors get security of an investment with a certain amount of interest (can't remember the exact number but it was pretty decent, from what I recall) backed by his contract.
The NBA has a few issues with this, and I feel they're reasonable concerns. I'm not convinced they're going to be able to stop him, though, beyond perhaps the issue of his player option, because that money isn't actually locked in. The simple solutions to that issue would be for Dinwiddie to turn that player option into a guaranteed year, which he probably would rather not do to keep his options open, or to simply use the first two years of his contract in financial transactions, which he would rather not do because it's a significantly smaller transaction and not as potentially profitable for him. I'm curious to see what comes of it.
As for the NBA, they're not against cryptocurrencies in general. The Kings and Mavs already accept bitcoin, for example, and cryptocurrency is particularly popular in Asia where investors want their money kept in places and forms that their government can't regulate - with the NBA after that sweet, sweet Chinese revenue, they're going to be torn on cryptocurrency at worst. The torn part comes from the fact that cryptocurrency being unregulated is both the reason people love to use it and the reason people are hesitant to accept it. If your business is regulated by those doing financial transactions with you are doing them in ways that aren't, you're potentially vulnerable (not automatically so) in ways that would largely be avoidable. My major problem with cryptocurrency stems from the unregulated part of the equation. If something is only worth it if it's unregulated, it's probably not worth it at all. Too much shady stuff goes on. I don't think Dinwiddie qualifies as that kind of shady stuff, at least not the tokenization of his contract, but I have some major concerns. Though we have some economists/financial experts on here smarter than me who may correct me in all of this.