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Blockchain & Sports: How Does Crypto Influence The Sports Industry?

Author: Jeffrey Craig Date: July 14, 2021

How Blockchain Is Used In Sports

Let’s take a look at some of the interesting and real use cases of blockchain in the Sports Industry

UFC, NBA, Sports Club, NFL, and more.

At the moment there’s a lot of movement at the intersection of sports and cryptocurrencies. Recently, crypto.com signed two large sponsorship deals: a $175 million deal with the UFC and then a $100 million deal with Forumula 1. On the NBA’s side of things, the Portland Trail Blazers landed the NBA’s first cryptocurrency jersey patch deal by joining with a cryptocurrency platform called StormX. CNBC reported that “aligning with StormX also provides an exclusive blockchain component that positions the Blazers for the future of ticketing and collecting fan data,” which is in our opinion some really interesting stuff.

Crypto is also making gains in the soccer world. In 2018, the Insider reported that “a little-known sports club in Turkey claims it has completed the world’s first football transfer using Bitcoin.” In Britain (the Premier League), the Southampton Football Club signed a new sponsorship deal that includes an option of receiving paid bonuses in Bitcoin. FC Bayern Munich (of the Bundesliga) signed a deal with Sorare, which is a fantasy football video game based on the Ethereum blockchain. Apparently, “users can trade limited edition football player cards and build teams…[and] earn in-game prizes based on the athletes’ performance in real life.”

The NFL is also active in the crypto industry. Tom Brady has stated that he is involved in crypto. The Carolina Panthers offensive tack Russel Okung stated that he is using a startup that converts his direct deposits from the Panters into cryptocurrencies. Also from the east coast, the New York Giants signed a deal with Grayscale Investments to put together one of the earliest crypto deals in the NFL.

Therefore, as we can see, the intersection of sports and crypto is only going to get further congested. It should be expected that we’ll hear more deals being made between sport organizations and large crypto platforms.

How Blockchain Is Changing Sports?

Blockchain technology has opened up many avenues for innovation in the sports industry, whether that’s with data analytics, smart contracts, ticketing, and tokens.

#1 Use Case – Sports Analytics: Blockchain technology can be used to collect and store data for teams. This data then can be used to improve both individual and team performance, improve tactics and overall team strategy, and monitor player health. Of course, sports organizations can also collect data on fans, which they can then use to help boost attendance and fan optimization.

#2 Use Case – Smart Contracts: Blockchain technology can now be used to house smart contracts for all aspects of the sports industry, not just for athletes, but for all parties involved, such as media and broadcasting rights, subscriptions, merchandise, sponsorships, and so on. Smart contracts can also reduce defraudment by eliminating any central or third party that enforces the contract. After all, by putting the contract on the blockchain, it becomes irrefutable, transparent, and automated.

#3 Use Case – Ticketing: Blockchain provides sports organizations with the opportunity to better manage the selling of tickets, especially reselling. This also means they can reduce the number of fraudulent tickets being sold. Blockchain will also allow organizations to collect more accurate data on ticket sales. Of course, questions will arise on privacy as blockchain presents itself as fully transparent.

#4 Use Case – Tokens: Sports organizations are experimenting with ways to increase fan engagement, and thus they’re creating their own crypto token, which fundamentally functions the same as a membership. These fan tokens permit fans to vote on matters such as what songs are played in the stadium, uniforms, charities, and so on.

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Esports Ecosystem & Cryptocurrencies

The monetization of in-game items, from the player’s perspective, has enormous potential, especially when combined with cryptocurrencies. This allows players to sell or lease in-game items they have spent time either developing or earning. Blockchain technology, on the other hand, permits the collection and storage of game and player stats on a single platform. Of course, issues may arise as to whether or not in-game items will be considered the property of players or game developers. It wouldn’t be surprising to hear about property rights in the context of video games and virtual worlds sometime in the near future.

It’s claimed that the esport community has experienced issues with fraud, especially in the context of contracts and informal agreements failing to be enforced. This means that the blockchain and smart contracts can smooth out these rough spots, which will naturally improve trust between players and event organizers.

Blockchain’s ability to collect and store data is an enormous benefit for esports. Video games, after all, heavily depend on data. Furthermore, if games are open-sourced, that means players can take a more active role in game design. Adding onto this, being able to engage in game design can be tokenized.

Conclusion

The crypto and blockchain revolution that is currently ongoing both in sports and esports is going to change a lot of things. However, it seems that esports is going to grab most of the attention, simply because of changing demographics. Younger generations are now paying more attention to esports than traditional sports, and traditional sports are seeing their revenues decline. Therefore, traditional sports see crypto and blockchain as a way to remain relevant, while esports sees crypto and blockchain as a way to further evolve and push the boundaries. The perspectives are simply different, thus, the results will be as well.


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