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Volume 27 No. 53
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Top 5 Ways Blockchain is Revolutionizing the Sports Industry

With the rise of the digital-native fan, and the events of 2020 decimating ticket revenue for live events, both the sports and esports industries are being forced to explore alternative revenue streams and more creative ways of maintaining fan engagement, as well as combating existing issues of fraud and corruption. There is one technology in particular that’s catching teams’ eyes: blockchain. Here are the top five ways that the technology is revolutionizing sports.

1. Increasing global engagement with fan tokens

The sports industry has an increasingly global fan base who, while unable to attend games, want to be engaged with their team. Consequently, sports teams are looking for ways to monetize this growing international audience and keep them engaged. One way that blockchain is helping is through the creation of fan tokens. These digital tokens act as a club’s own virtual currency, which fans can purchase with fiat currencies, like dollars or pounds. Fans exchange the fan tokens for merchandise, collectables, or exclusive experiences. 

Fans can also use their tokens to participate in fan-led decisions through a mobile voting platform; as well as serving as a ticket into a secure, exclusive inner circle of fans with shared passions and beliefs. Fan tokens even help supporters feel more connected with their teams from a distance. For instance, FC Barcelona has an estimated 450 million fans worldwide, who are now within their reach thanks to their blockchain fan tokens, $1.3 million of which sold out in under two hours. 

2. Digital trading cards

Trading cards and collectibles have always been a profitable revenue stream for clubs. But a digital age and a growing digital-native fan base (influenced by gaming and esports) demands an evolution into digital collectibles. By creating digital trading cards and memorabilia that fans can buy and trade, clubs are keeping pace with the changing consumption habits of fans and ensuring an even broader appeal. Blockchain-powered crypto collectables allow teams to create either unique or limited-edition collectibles, all provable via a secure and transparent digital ledger. 

These blockchain applications have a huge range of possibilities and lucrative revenue streams for the sports industry. Fans could purchase limited-edition player trading cards, or earn incentives for collecting all team players. In baseball, for instance, fans can purchase All Star cards at a range of prices, generating new income for teams and appealing to a younger audience of sports fans. 

3. Rewarding fans on engagement platforms

Blockchain can also be used to create engagement platforms for fans. On these platforms, clubs can create loyalty programs, rewarding fans for things like creating and sharing content and allowing them to accumulate points or rewards to spend on merchandise, tickets, and digital collectibles. These platforms not only help to foster a sense of community for fans but can also enhance a club’s relationship with sponsors, as the transparent nature of the tech means that fan interaction data can be shared seamlessly with them. This allows sponsors to access verified and immutable engagement metrics, and for fans it means visibility over the transactions when it comes to being awarded or spending loyalty points. Plus, because this information is decentralized (i.e. stored on a secure blockchain network, rather than one centralized server), there is also no single point of failure, making the data incredibly secure and almost impossible to corrupt. Blockchain, then, can provide reassurance of the validity of the metrics and insights gathered from fan interactions, helping sponsors generate a better ROI. 

4. Fighting ticket fraud

One of the biggest problems in the industry is ticket touting and counterfeiting. Sports clubs are looking for more effective ways to prevent fraud and many are turning to blockchain. The technology’s transparent nature means that anyone can look up and verify the validity of a ticket, as well as tracing it back to the club to ensure it is legitimate. 

Blockchain also makes transferring tickets easier as it allows peer-to-peer transfers without intermediaries, letting fans who are unable to attend an event transfer their ticket securely without penalty fees or central actors. This is also true in the case of sports fixtures being delayed or canceled, making rescheduling a simpler process for everyone.  

5. Building stakeholder trust in esports

Esports involves multiple investors, from game developers to sponsors, team managers, players, sponsors, and media. This means that a huge number of transactions must take place, so information must be repeated unnecessarily for each party. Intermediaries are also required, as it does not make sense for one party to hold all the information. Blockchain’s decentralized nature can provide a single platform to bring all these actors together, allowing stakeholders to connect without intermediaries. This allows for a more fluid process when it comes to the transfer of players, prize money or media rights through programmable smart contracts. Not only does this increase trust, but it also removes concerns over unfair distribution of prize money or payments.

Lars Rensing is CEO and co-founder of enterprise blockchain services provider Protokol. He has over four years experience in the blockchain industry, helping to lead and co-found Ark, the open-source blockchain platform that underpins Protokol's blockchain services.