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Summary
- New crypto entrants are snowballing in the tech-driven space of football industry.
- Football teams are also trying to tap into blockchain and crypto market to increase earnings potential.
- Euro Cup 2020 is among the most-watched tournaments across the world and fan tokens can change the entire ball game in crypto space.
Cryptocurrencies have disrupted the traditional financial markets in the last few years. Not bounded by the international borders and their exchange rates, this decentralized currency can not only be bought through fiat currency, but you can also mine them by solving complex mathematical problems on high-tech hardware.
While bitcoin is said to be the oldest decentralized currency, several other altcoins have evolved over the years that are equally capable of holding investors' attention.
There are thousands of cryptocurrencies in the market and seeing their surge in popularity, one can say that the proverbial cat is out of the bag. Many analysts consider cryptocurrencies safe and transparent because of the underlying blockchain technology.
In blockchain, information is recorded in a way that can’t be manipulated or changed or hacked. This has characteristic has significantly pushed the popularity of cryptocurrencies.
Recently, El Salvador President Nayib Bukele took a landmark decision to establish bitcoin as legal tender in the central American nation. Now, there are speculations that South American country Paraguay is also exploring bitcoin legalization.
Like many industries, even the football industry has been tracking the progress of cryptocurrencies and is looking to grab its massive potential of monetizing and engage a global market in ways that were unimaginable not long ago.
Uncertainty around cryptocurrencies
The business of cryptocurrency is based on trust. As a cryptocurrency enthusiast, you may be in control of your investments, but cannot ascertain the genuineness the crypto network, which may drop off the face of the earth.
We are not saying that cryptocurrency networks may disappear, but critics of this network often point us towards this risk. The primary reason behind this is decentralization – which is both crypto’s boon and bane.
With decentralization, no central authority can control this network. This lends credibility to the network but induces investors’ reluctance to trust it. It is dramatically different from fiat currencies are deemed trustworthy and backed by central authorities. If something goes wrong with the crypto network, there is no one to ensure you’re reimbursed for the losses.
Football industry embracing cryptocurrency
Over the last few years, the football industry has adopted new technologies to improve the game and increase fan engagement. After criticism and heated debates, the Fédération Internationale de Football Association (FIFA) introduced the Video Assistant Referees (VAR)
technology at professional football competitions. FIFA included it in the 'Laws of the Game' in the 2018-19 edition.
Apart from the VAR, a new entrant is snowballing in the technology-driven space of the sports.
Blockchain technology has seeped into the game, and international teams and famous football clubs have embraced it to engage with fans and get more sponsors.
Source: Pixabay
The ongoing Euro Cup 2020 is among the most-watched tournaments across the world. Millions of football fans remain glued to their screens as the premier continental championship entered the knockout stage. However, the ongoing pandemic has also impacted the potential of maximizing the earnings through full stadiums.
To recover from these woes, the Union of European Football Associations (UEFA) signed a five-year deal with AntChain, a blockchain-as-a-service platform. The company will be the official global blockchain partner of UEFA Euro 2020 and UEFA national team football.
AntChain's blockchain will store top scorer's records in this year's championship and upload the result on the blockchain ledger for permanent storage. Since AntChain is a subsidiary of the Alibaba Group, the tournament's top scorer will receive a trophy from Alipay.
Fan engagement and crypto business go hand-in-hand
Apart from the international football teams, premier football clubs are also trying to tap into blockchain and crypto market. Paris Saint-Germain (PSG) and Juventus Football Club, leading football clubs with millions of fans, have signed deals with Socios, a sports fan engagement platform on blockchain fintech provider Chiliz.
Socios offers fan engagement tokens, and PSG and Juventus are the two major football clubs whose tokens $PSG and $JUV are listed on major exchanges like Binance, Upbit and Paribu.
According to CoinMarketCap, the $PSG token was trading at US$ 12,57, up by 5.4 per cent, and the $JUV token was 4.4 per cent up and trading at US$ 7.45 at 10 AM EDT on June 29.
Source: © Okfotopuntoit/Megapixl.com
As far as fan engagement is concerned, those who investing in fan tokens get the right to vote on certain decisions of the football clubs. Apart from PSG and Juventus, major sports organizations like FC Barcelona, AS ROMA and Atletico de Madrid have partnered with Chiliz.
Socios is increasing user engagement and giving a chance to these clubs to monetize their fanbase and increase the brand presence across the world.
Bottom line
Looking at the evolving trends, it seems that the ideas promoted by blockchain companies may revolutionize the football industry. Despite the volatilite-nature of digital currencies, crypto-based sponsorship deals are set to increase in future.
The above constitutes a preliminary view and any interest in cryptocurrencies should be evaluated further from investment point of view.
