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Blockchain technology is now being applied to various areas of everyday life that are causing the necessary changes, including in the sports industry. What impact does blockchain and crypto have on the sports industry? Find out in this blog!
impact-blockchain-technology-in-sports-industry
When we think of blockchain technology, we often immediately think of coins that are subject to market fluctuations where we secretly hope to make a lot of money. In addition to the financial aspect, we often forget the entire underlying technology and the possibilities this entails.
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What is the blockchain technology?
To understand how blockchain technology can change the future, it is of course essential to look at what this technology is and how it actually works. The blockchain is a new way of recording information in such a way that it is impossible to change or even hack the system.
In principle, the blockchain is a digital ledger of all transactions that is distributed across the entire network of all users. It is these users who approve all transactions, through Proof-of-Work (PoW). This ledger is completely decentralized and makes this a new and above all transparent and secure way of storing and distributing information and digital currencies. This means that you can apply blockchain technology to all facets of everyday life, from government agencies to in-game applications, but also the sports industry.
The decentralized aspect is the core here. Often unnecessary third parties are no longer used, but everything is done in a peer-to-peer network where transparency and efficiency prevail. Let’s see how this technology impacts the international sports industry.
Blockchain technology in sports
The sports industry is a multi-billion dollar business that affects society as a whole worldwide. Via CoinGecko we see that at the time of writing, June 2021, there are no fewer than 38 projects in the field of sports and e-sports.
Without even realizing it, we are all connected to a sport in one way or another. Maybe you have children who are members of a sports club or are you even on the field every weekend? Sport is a broad concept and ranges from cycling, football, tennis to the latest trends in 2021 such as padel. But how can blockchain technology influence the sports industry? Let’s approach this with some examples:
How Blockchain technology is been used in Sports Box office
Are you a sports fan who will go through fire on the sidelines for your team? Then you may have bought VIP tickets for a very important sports match. It is therefore often these matches that sell out in no time and after which numerous false tickets are circulating for far too high prices. Another recurring problem is that certain people buy up tickets and then resell them at a hefty profit margin.
Counterfeiting and fraud are often major problems in the ticket industry. Due to the implementation of the blockchain technology, all this information is recorded on the blockchain during the sale. This means that when purchasing a ticket, the personal data is linked to a (digital) ticket. As a result, it is always clear and transparent who is the rightful owner of a ticket.
By tokenizing these tickets as a non-fungible token (NFT), each ticket is unique on the blockchain and cannot be counterfeited and the rightful owner is always known. By using smart contracts, a ticket system can also choose to sell an x number of tickets to the same person. For example, it is not possible for a person to buy a large number of tickets and then resell them at extortionate prices.
How Blockchain technology is been used in Sports Fan management
Fan management takes on a completely new dimension through the use of blockchain and crypto in the sports industry. Do you live for a certain club and would you like nothing more than to be more involved in a club? It is possible, thanks to blockchain technology!
One of the frontrunners is Chiliz (CHZ), a crypto project that aims to connect fans more with their favorite club. By investing in Chiliz, you get a governance function and a say in decisions made at your favorite club. For example, you can vote which song will be played when scoring a goal or you can even choose in which outfit your favorite club will play next season. In addition, you have many other benefits, such as access to a pre-sale for VIP tickets and the like.
Chiliz is currently mainly active in the football industry, but this technology can be used for any club, in any segment of the sports industry.
Impact of Blockchain technology on Sports NFT Merchandise
Merchandise is still a big part of the sports industry. And what could be better than having a shirt signed by your favorite player? But what if you come across this one online? After all, you never know whether this is really the shirt of your favorite player or if this is just a replica of the original. Thanks to blockchain technology, such assets can be stored digitally as a unique token. We know this as NFT.
This is recorded on the blockchain and is accompanied by a certificate that always refers to the rightful owner. This way you can always check on the blockchain who the previous owners were and for what price it was bought or sold. Through this transparency you always know whether fraud has taken place.
Passive income
Athletes can also generate passive income via the above method on top of their usually generous salary. For example, the players can determine by means of smart contracts that with each sale of this NFT, he will receive a certain percentage. Despite being a relatively small percentage, these unique items are often bought for high amounts because they are collectors items.
How Blockchain technology is been used to avoid Doping and cheating in sports
Did you know that Russian athletes are not allowed to participate in the Olympics until 2022? After a scandal that has plagued the sports industry for years, it was concluded that doping practices were organized for Russian athletes during the Winter Games in Sochi in 2014.
One of the properties of blockchain technology is that everything is transparent and decentralized. In concrete terms, this means that information should not be manipulated and validated by the network. These organized practices would be impossible if the blockchain technology were applied. All athletes should be tested in an equal way, with all information being stored on the blockchain and therefore not subject to further manipulation.
How Blockchain technology is been used in Sports Rights Ownership
A big advantage for using bockchain and crypto is the acquisition rights ownership. Just think of broadcasting certain matches, but also rights regarding a sponsorship with a big brand, you name it! These are contracts that often involve astronomical sums to secure these rights.
Nowadays all information is available online and not all rights are respected. Think of paid streaming services that have exclusive rights to broadcast certain matches. It happens in practice that this content is taken over and it is unlawfully distributed. This also applies to rights to images of athletes and/or teams.
The blockchain can record all content on the blockchain and provide the rightholders with the correct rights at all times. This way, content can never be distributed that you do not own. Authentication of users online can thus be simplified, whereby the intervention of third parties is no longer necessary.
How Blockchain technology is been used in Payment of salaries for sports athletes/players
Everyone gets his or her salary paid in the currency we know as the national currency, be it the euro or the dollar. But it is not such a bad idea at all to pay out salaries and/or premiums of athletes in crypto coins. At the end of 2020, Russel Okung was the first American football player to receive part of his salary in Bitcoin.
More and more companies offer the possibility to pay their employees in Bitcoin. For example, Domino’s Pizza has confirmed that employees at 16 locations can choose to have part of their salary paid in Bitcoin. In addition, top athletes can also demand a certain percentage of premiums that are paid automatically by means of smart contracts. The advantage here is again openness and transparency and that no one can withhold certain premiums.
As Bitcoin and other currencies become more widely accepted as an effective means of payment, there will also be more possibilities here and who knows, it may become evident that salaries may or may not be partly paid in crypto.
Conclusion
We see more and more applications of blockchain technology in everyday life. Large institutional companies, but also international sports clubs see a future in this new technology. Thanks to projects such as Chiliz (CHZ), these possibilities are already being applied in practice, making the implementation tangible and thus setting an example for many other sports organisations.
Full integration of blockchain technology into society will require sufficient time, which will involve experimentation and trial and error. But we are seeing more and more interest and successful stories, also in the sports industry.
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