How will the blockchain impact sports? You hear this question quite often nowadays! The question is not if it will impact sports but more so to what extent. The short answer is that there are loads of different applications spread all over. It will indeed have a huge impact.
Many industries will be impacted by the blockchain
Will the blockchain change our lives? Do you know what the blockchain is? Is the blockchain an improvement? Is it complicated? Lots of different questions. Many people don’t even know what it actually is. Something with crypto currency or with bitcoin they may say. Yes, cryptocurrency uses blockchain technology, but it is just one of the many applications the blockchain is used for. It will affect quite a lot of industries and especially those ones that are making use of middlemen. This includes the sportsindustry! The sportsworld will change for the better as a result of the blockchain as we will explain later. Note that the blockchain is one of my expected 11 important trends in sports.
The blockchain simply explained
Many people still find it difficult to understand what the blockchain really is, let alone explaining it to others. I am not going to re-invent the wheel here. Instead, I suggest that you watch this funny video below. It explains it very clearly in simple words.
Allright! I hope things have clarified a bit. It is digital assets we are talking about and they are valuable! Let me briefly summarize the main characteristics of the blockchain:
- It is an open general ledger that records transactions between two parties efficiently and in a verifiable and permanent way:
- It’s maintained by every user on the blockchain.
- It is decentralized, meaning every user has a complete copy.
- It can track the entire transaction history of any given item or currency.
- Middlemen are no longer needed, it’s peer to peer
The big advantage and also showing the immense potential is that it is safer and that intermediaries like lawyers, brokers, and bankers no longer are necessary
Many applications in the world of sports
Ofcourse there are still many barriers, be it technological, governance, organizational or society related. However, the potential is groundbreaking and will result in huge changes in our lifes. The sports world will also be heavily impacted. Below we have listed some possibilities within the world of sports where the blockchain can really have an impact.
Counterfeiting and fraude are huge problems in the ticketing industry. Unfortunately I have been a victim myself. You probably are aware yourself of all these vendors outside the stadium flagging their for sale tickets. Do you know whether they are for real? No! Since asset ownership (and a ticket is an asset) lends itself ideally for blockchain technology, ticketing should benefit. With this technology tickets can now be safely stored in the blockchain and show who is the rightful owner of the ticket.
Sports broadcasting rights of big events, image rights, content rights, you name it! Enormous sums of money are involved nowadays in acquiring and exploiting rights. However, simultaneously there are loads of infringements of people who are not owner of these rights. What to think of all infringements of images on the internet? At the same time, the media landscape is changing. Not only are our viewing habits (streaming, pay per view etc) and distribution platforms changing, increasingly people like you and me can also produce content and distribute it.
The blockchain is ideally suitable for rights holders to track rights they have licensed. Moreover, they also can use the blockchain to facilitate rights payments. Authentication of online users will become much easier and middlemen no longer will be needed. A win win for everybody who owns certain (sports)rights.
Doping is still a hot issue in many sports as performance enhancing drugs are banned but used nevertheless. Scandals continuously plague several sports. I am sure you remember a number of Russian hackers entering the database of the World Anti Doping Agency (WADA) in 2016 and leaking and possibly tweaking some data of several athletes. The blockchain may be an ideal solution for protection of these data, whilst simultaneously providing transparency. A cover up from or manipulating data is no longer possible from an administrative point of view. The blockchain lends itself for structured testing and recording. Once results are checked they will be engraved forever and protected from manipulation.
Increasingly athletes and clubs are using sensors in order to gather their own data. These data can be used to analyze and improve performances or map performances for scouting purposes. This can be a competitive advantage and it is for this reason that more and more athletes and clubs use these data solely for their own purposes. Data can be valuable and therefore needs to be protected. As athletes and clubs are proprietary owners and analytics are valuable assets, the blockchain is ideally suited for these data. Moreover, it also gives the athlete the opportunity to monetize these data at his or her convenience by selling them to other parties if such player wants so!
5. Player and club participations
The blockchain offers unique solutions for investing in clubs/stadiums or athletes. Quite often these are lacking the financial means to give their sporting careers, club or stadium a boost. Small investors will now be able to take a share in their favorite athlete or club as kind of a crowdfunding platform, call it tokenization if you want. The return could be a certain % of the athlete’s or club’s future income. By investing in it you have become an owner of a valuable asset here! The shares in this asset can even be traded as the blockchain keeps track of the rightful owner.
6. Fan engagement
The blockchain is also ideally suited for better fan engagement. Clubs will now be able to create unique tokens (these can be considered as valuable assets) which can be used for all kind of fan related purposes. What to think of access to exclusive content? Or use it as votes for appointing a new manager of the club? Or maybe purchasing club specific merchandise or entering a loyalty programme? The possibilities are endless. Every vote or transaction will be administered by the blockchain and set in stone! Juventus and PSG are just a few names of clubs who have started doing this with the help of Socios.com
Also interesting to read: how to improve fan engagement in the future
7. The sports betting industry
If there is one industry where the middleman plays an important role, then it is the betting industry. Your “bookie” is the man who facilitates the bets and sets the odds. Transparency? Huh?! What do you mean transparency?The betting industry? The blockchain has the potential to completely remodel this industry. It could entirely wipe out the role of the bookmaker and a new peer-to-peer betting system could be developed with much more transparency and with much lower costs involved.
8. Fantasy sports
Fantasy sports have grown big in the last couple of years. Turnover levels are already in the billions of dollars. However, this industry is plagued by fraude, which has resulted in some players leaving the game. They no longer trust some of the platforms. This lack of transparency can be resolved by the introduction of the blockchain, which is rapidly gaining traction. Blockchain transactions are secured this way, transparency improves, assets are safe whilst fund transfer is also running smoothly.
9. Sports collectibles
Sports memorabilia and collectibles are a huge market. Who doesn’t want a signed jersey of their favorite athlete. The problem is that this industry is hugely suffering from counterfeiting. The blockchain again can solve this. Officially licensed collectibles can now be transferred with a token certificate of authenticity. All these certificates are stored in the blockchain.
The E-Sports industry is growing at a stellar pace. However, with its many stakeholders (think about players, sponsors, organizers, managers, publishers, advertisers etc), it is far from transparent at the moment. The blockchain might come to the rescue here! By offering a decentralized platform with all the stakeholders under one roof and with peer to peer transactions, this industry might hugely benefit and rapidly filling in a leaderships role as far as the blockchain is concerned. Think about trust levels, secure payments, sponsorships, distribution of prize money, transfer of players etc etc.
Also interesting to read: 10 awesome reasons why E-sports will take off this new decade
Any other ideas or do you want to comment? I would welcome it!
This post has been updated and was originally published on 11 december 2019