Blockchain in Sports: How Blockchain Technology Is Changing the Sports Industry (use Cases)
The original blockchain introduced in 2009 which served as the first generation of blockchain stemmed from a white paper published by Satoshi Nakamoto in 2008. Crypto and financial transactions were the main applications of the original blockchain iteration.
However the technology has since evolved into a tool applied across industries especially with the integration of smart contracts. Blockchain technology covers sectors, businesses, and industries such as insurance services, healthcare industry, smart grid technology, the Internet of Things (IoT) supply chain management and of course sports.
Due to its attributes and features blockchain technology has the potential to address issues and enhance effectiveness within the sports industry, which has become a significant game changer. By enabling a shift towards a peer to peer network this technology promotes transparency and accountability by moving from existing fragmented centralized systems. The process of timestamping, encrypting, linking data, within a blockchain ensures immutability which significantly bolsters the sports industry’s ability to track, and verify information.
Numerous companies in the sports industry have collaborated with top tier teams and athletes to offer blockchain powered services like fan tokens and sports tickets and ventures into sports wagering as well as Non Fungible Tokens (NFTs). Back in 2017 Microsoft made waves with "BraveLog " marking the debut of a platform tailored for sports endeavors aimed at establishing an athletic profile for players through secure storage of performance data via blockchain technology—providing them with insights into their abilities and aiding in optimizing their training routines efficiently.
Blockchain Technology in Sports and Cybersports
Blockchain technology has made advancements in sports and esports. More and more people, particularly Gen Zs and millennials, are getting into gaming and esports. For instance, digital assets that are tokenized can be used to develop blockchain-based games.
Additionally, blockchain technology has the potential to generate provably fair results for real-time sports betting. Last but not least, cryptocurrency allows for payments based on smart contracts, doing away with the need for conventional middlemen. Platforms driven by blockchain technology enable fans to have one-of-a-kind, personalized interactions with their beloved teams and sportsmen.
Vitalik Buterin, Co-Founder of Ethereum perfectly captures the essence of the technology: “Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.”
How Is Blockchain Impacting the Sports Industry?
Thanks to blockchain technology, many of the one-of-a-kind experiences that fans and enthusiasts want are within reach. Blockchain technology is revolutionizing the sports industry by providing new tools to boost fan connection, guarantee legitimacy, and streamline marketing and administration processes. The following are some of the key and pioneer applications of blockchain technology in the sports industry.
The Use of Digital Currency in Sports
With its decentralized, secure, and borderless solution, cryptocurrency has revolutionized the way transactions are conducted. This is ideal for the fast-paced world of sports betting. Users who desire quick and flexible payment solutions are driving the integration of cryptocurrency options by betting software development agencies and sports betting app developers.
People who bet online and appreciate their privacy and independence from bank oversight may like the anonymity that digital currency provides thanks to its decentralized structure. In areas where gambling regulations are stringent, digital wallets give users the freedom to transact without linking their personal data to a specific payment method.
Impact on Fan Identity
Increased fan income, digital collectibles, crowdsourcing of assets, and verified superfan celebrity are some of the unique net values that may be achieved via the creation of blockchain-based identities. These identities also enable new and significant experiences. Like a fan profile or a license granted by a sporting organization, a verified superfan may be easily identified.
Insightful and actionable fan data might be gathered by sports organizations, leading to increased engagement and income. In addition to providing new revenue streams, this helps strengthen bonds between fans and their favorite sports teams. Fans may get special material, exclusive content, discounts, meet-and-greets with their favorite teams and athletes, and VIP experiences during games by collecting and exchanging them.
Influence on Memorabilia Authentication
One problem that sports can solve with blockchain technology is fake memorabilia. Each item of sports memorabilia may be given a distinct digital proof of authenticity by using blockchain's transparent and immutable ledger. The $5 billion sports memorabilia market relies on a trust-based system to authenticate each specialized item. However this system is foolproof.
In the battle against the market for fake sports souvenirs, collectID is a revolutionary solution. In order to make items more secure, it adds NFC tags that can't be duplicated. These tags generate a distinctive, dynamically encoded message that varies with each contact. Famous sports teams and businesses have used collectID's technology, including VfB Stuttgart and Bayern Leverkusen.
Influence on Digital Collectibles
There has always been a tendency for technical innovation in the sports industry. But the most promising is blockchain technology, which is creating new possibilities for groups and clubs as well as encouraging fan participation. Once Manchester City and OKX were officially partnered with the cryptocurrency exchange, they proceeded to release a limited edition of “The Roses and the Bees” jerseys inspired by rare NFTs.
The jerseys have hand-painted motifs by artist Christian Jeffer. In the words of Man City’s chief marketing and fan experience officer, Nuria Tarre, “We think it’s important that you can own this piece digitally. I think that’s one of the beauties of Web3 — it changes the ownership process.”
Further, FC Barcelona in partnership with Chiliz, a blockchain platform, unveiled the $BAR Fan Token in 2020. Here are some of the things that make digital collectibles unique:
- These one-of-a-kind digital assets are only available in limited quantities.
- It is possible to trace the history of ownership and confirm the legitimacy of digital collectibles.
- Having the digital pieces as possessions shows a level of competence, passion, and affection.
- To attract new customers and engage existing ones, they can be traded on an open market.
Influence on Athlete Crowdfunding
Personalized, automated contracts provide a new way for fans and communities to invest in athletes via crowdfunding. Losses in equity, expenses associated with capital, or income to third parties are common in traditional finance. The use of blockchain technology in crowdsourcing, on the other hand, allows leagues and players to monitor and monetize fan engagement and loyalty more effectively.
Blockchain-based Ticketing Systems
Blockchain technology improves the efficiency, transparency, and security of the sports ticketing process. It is possible to convert each ticket into a one-of-a-kind digital asset, which would make fabrication very difficult.
In addition, smart contracts made possible by blockchain technology automate several steps in the ticketing process, including validation and instant transfer. As a result, event organizers and teams may have greater say over the distribution and price of tickets, while sports fans can look forward to a more dependable and seamless purchasing experience.
Sports Betting and Blockchain
Despite being an industry worth billions of dollars, the sports betting sector is often rife with problems including fraud and lack of transparency. With blockchain technology, the sports gambling industry can finally be trusted and betting activities can be conducted transparently and honestly. Industry experts like Evelyn Balyton have talked up how the adoption of this technology has helped the sports betting industry.
Another impact of blockchain on the online sports betting industry is how it has revolutionized payments. Today, there are several reputable bookmaker sites accepting Bitcoin for online betting that bettors can use. Blockchain technology guarantees honesty and avoids manipulation by recording all transactions on a decentralized database. Also, smart contracts may automate payouts, so winners get their money quickly and without argument.
Final Thoughts
Blockchain technology has developed into a general-purpose tool with use cases in several sectors, including the global sports business. Although it is still in its early stages of implementation, the potential of blockchain technology holds great promise for the future of the sports industry. It could revolutionize the management of athletes' training and recruitment, the prevention of doping, the detection and elimination of fake sports tickets and collectibles.
Ethereum blockchain technology can also enhance the safeguarding of sports copyright through the provision of an immutable, distributed, and transparent database. The introduction of fan tokens and NFT collectibles on the blockchain might increase fan interactions with the platform and lead to new revenue sources; smart contracts could automate the financing and remuneration of players, as well as the management of sports betting and broadcasting platforms.