As many sporting events have been cancelled worldwide or held without spectators, clubs need to claw back the losses from unsaleable tickets and impacted sponsorship deals. Increasing fan engagement digitally has become a critical priority. As the industry struggles to survive, new technology in sports is needed.
The future of sports, in fact, lies in embracing digitisation and incorporating innovative fan engagement solutions underpinned by blockchain technology as part of clubs’ and teams’ wider digital strategies. Through digital fan engagement, clubs can adapt to appeal to a younger ‘digital native’ and foster a sense of loyalty and belonging across geographies. They can open up new revenue streams and improve ROI for investors and sponsors alike as many aspects of the game move increasingly online.
Through cutting-edge solutions enabled by blockchain technology, teams can significantly increase fan interaction both online and offline, unlock new sources of profit, and encourage greater interaction with team sponsors.
Like many industries, the sporting industry has historically found it difficult to keep up with the rapid pace of technology. New generations of fans that are both geographically dispersed and accustomed to interacting online are seeking the same kind of fresh solutions from traditional clubs that they expect from other areas of their lives, such as social media or online gaming.
Blockchain technology constitutes a new infrastructure for storage of data and management of software applications which thereby decreases the need for centralized middlemen. They operate through a different hierarchical structure wherein a network of computers are linked together via an overarching software protocol. Since blockchains do not come with any centralized authority or gatekeeper, anyone with an internet connection can retrieve information stored on a blockchain simply by downloading an easily accessible open source software.
Digital solutions with blockchain technology
With a clear evolution already occurring in sports accelerated by the events of 2020, sports organisations are increasingly relying on innovative digital solutions, underpinned in part by blockchain technology, to enable their digital transformations.
Not only can blockchain serve to connect a club to its fans faster, easier and more securely, but its immutable and cryptographically secure technology can enable game-changing solutions such as digital collectibles, fan tokens, and loyalty and rewards programmes.
Several major sporting organisations — from top soccer clubs like FC Barcelona and Juventus to the National Basketball Association (NBA) — are already utilising fan tokens underpinned by blockchain technology to engage their fans and create new revenue streams. They’re using fan tokens that act as the club’s own virtual currency and can be purchased with fiat currencies like pounds, dollars, or euros.
Sports fans can then exchange these for merchandise, collectibles, or even exclusive matchday experiences. Fans can also use their tokens to accumulate voting rights in decisions that affect their club, further deepening their affinity to it.
Digital collectibles such as digital trading cards expand on an already popular revenue stream for clubs — but take it to the digital realm. By moving away from physical memorabilia, fans can trade more easily online across the globe. Blockchain technology allows clubs to create completely unique one-off digital assets or limited-edition digital collections that are provably scarce and secured on a transparent digital ledger.
These digital collectibles have several advantages over traditional trading cards. They can never be destroyed, forged or replicated, and they have a completely transparent cryptographically secured audit trail that allows fans to prove ownership. They’re also designed to be interoperable, meaning that trading cards can be used over a variety of applications, giving them a broader appeal.
This opens up massive opportunities for teams to incentivise fans to collect all team players or purchase rare or exclusive cards for different prices. Not only are collectible cards and other memorabilia, such as in-game items, a great way to increase engagement among younger fans, but they can be very lucrative for clubs as well.
BENEFITS TO ESPORTS
Blockchain is gradually finding prominence in the e-sports industry as a block-chain based game allows players to trade weapons, cards or even characters on a more open market enabling the users to trade the virtual gaming items with each other with the use of cryptocurrency rather than using fiat currency to purchase items directly from game developers. Blockchain empowers the gamers to own the cryptocurrencies and even convert them into fiat currency. A crucial issue blockchain hopes to tackle is the common problem of delay in payments to the e-sports players.
Blockchain technology makes use of smart contracts on which people can build decentralized applications. Instead of relying on standard legal agreements, parties can use a smart contract to stipulate certain contractual rights and obligations which binds the parties together. For execution of a smart contract, the parties have to first negotiate the terms of their agreement and once that is agreed upon, all or part of their understanding in smart contract code is triggered by digitally signed blockchain based transactions. Once smart contract is put into motion, the terms embodied in the code are executed and cannot be stopped unless parties have incorporated logic in smart contract to halt the program’s execution.
The use of cryptocurrency in gaming also solves the problem of ownership of in-game assets, as blockchain-based games tokenize all gaming items. Once gamers acquire assets, they remain in their possession within a digital wallet until they decide to trade or sell the tokenized asset just like any other cryptocurrency. The potential power of blockchain for gaming industry is enormous. Blockchain provides the opportunity to both the players and owners to earn. Blockchain drastically improves the eSports gaming process because of its transparency, decentralized structure, and token system.
With blockchain technology, you can potentially use a decentralized, public database as your gaming portfolio to get sponsorships.