Blockchain and cryptocurrency are technologies created to help people achieve financial independence, free from the complications of traditional banking. One interesting thing about crypto and blockchain is the numerous use cases they have created since their inception. We have seen the applications surface in finance, medicine, transportation, real estate, online payments, sports, and many other industries. As the world aligns with the 4th industrial revolution, industries have begun to join the trend of adopting emerging technologies. Today we look at the emergence of cryptocurrency in sports.
How Did It Start?
The popularity of cryptocurrency in the sporting industry began when betting websites and gambling platforms started accepting crypto payments. Online betting platforms had some flaws that were making it difficult for trust to function between betting managers and bettors.
Most times, it took several days before bettors got their winnings because the transactions needed to be processed. In some cases, the bettor never got their winnings, or it was not complete.
The traditional betting system made it easy for fraudsters to perform their acts. The entire system also lacked transparency, which led to trust issues.
Some years ago when ICOs were still hot, several crypto-based betting sites were created. These crypto-based betting sites were created to give crypto users a platform to deploy their digital assets. As the crypto community began to expand, mainstream betting sites began to show interest in crypto adoption and payments.
A lot has happened in the crypto community between 2010 and now, as more companies have adopted crypto use. While some sports clubs have begun to accept cryptocurrency payments, some others have taken another dimension through tokenization. Some sports clubs create tokens for their fans, which they can use to purchase the club’s merchandise.
Furthermore, the clubs are using these tokens as a way to build strong sporting communities and fan bases. With the tokens, decisions can be made about some of the club’s operations via governance models and decentralized voting mechanisms.
The English Premier League has seen more than 7 of its football clubs get sponsored by cryptocurrency and crypto-based companies. Different sporting clubs are adopting and using cryptocurrency for different purposes.
We have seen sports organizations like the Mavericks, Sacramento Kings, Barcelona FC, and others express interest in digital assets. There are also indications that some players have begun to downplay the use of paper written contracts. They are looking at smart contracts, which leverages blockchain technology and automatically execute commands when predetermined terms and conditions are met.
Crypto making its way into the sporting industry has been a slow and gradual process. If we go back to 2014, the NBA’s Sacramento Kings were the very first team to accept Bitcoin payments.
At the time, Bitcoin had a much smaller following than it does today. Additionally, one could argue that Bitcoin had more market risk compared to today’s environment where corporations are leveraging Bitcoin to offset fiat risk.
Before the pandemic, sports were a consistent avenue for gathering large amounts of people in one spot. They are also the perfect vertical to drive crypto adoption. It will be interesting to see how mainstream sports teams like the Dallas Mavericks monetize digital assets.
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