Cryptocurrency is already involved in esports via various startups which want to gain a foothold in the industry. Many of these startups want to try innovative ways to lure viewers to spend time on their websites. The advantages of a secure transaction, the anonymous nature of payments in the digital currency space appeal to the needs of a gaming enthusiast. As esports and cryptocurrency grow, the merger of the two industries is a growing reality.
Growth of esports
The Global Esports economy is slated to reach $905.6 million in 2018. A recent Newzoo report provides an insight into the rise of the global and regional esports economy. It also provides a rough estimation of the future potential in terms of the hype, viewers, franchises etc. The growth of esports in 2018 has been fuelled by the launch of the Overwatch League as well as Riot’s own franchised league for League of Legends.
With a current Year on Year (YoY) growth of 38%, the esports economy is expected to reach $905.6 million. Further extensive details are stated in the report which points to the majority of the money coming via direct sponsorships and advertising. With the viewership numbers rising to 380 million, there is increased interest in esports from young fans. Brands expect the esports business to fully professionalize within the next 3-5 years. Esports has become the hot investment target right now with big names associated with the industry. An investment in the current market will reap huge rewards in the near future when esports matures as an industry.
However, esports still has a lot of ground to cover compared to regular sports. But the growth rate and the young demographic involved in esports guarantee its future success. Over the past few months, we have had brands such as Audi, T Mobile, Mercedes, Toyota invest in esports teams and leagues. Other non-endemic to esports organizations such as the Kroenke Brothers, Kraft family have bought teams in the Overwatch League. The success of esports can be judged from the huge interest displayed by these parties.
Cryptocurrency and esports
Cryptocurrency is a term that is misused by several companies in the market. It is the most hyped up term in the current investment market. But it is necessary to understand cryptocurrency in order to truly realize it’s potential. It can revolutionize the markets, but its implementation in regulated national systems is filled with obstacles. But esports is just starting out and is the perfect grounds for the cryptocurrency.
What is Cryptocurrency?
A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
Cryptocurrency offers various advantages to esports fans, not all of which are immediately evident. The vast use of cryptocurrency and blockchain technology ensures that it can be customized to the needs of esports fans. Cryptocurrency is the ‘Magic word’ which brings in investment in the current market. The hype around Cryptocurrency and Blockchain technology will obviously become more realistic in the near future. However, there are still many companies who exploit the usage of the term for their own financial benefits, the technology has useful features for the esports ecosystem.
The following segments are the most obvious choices for the esports and cryptocurrency integration.
- Streaming and Viewer Interaction
- A virtual esports market
- Maintaining the anonymity and security of financial transactions in esports
Streaming and Viewer Interaction
The viewers’ current choice in streaming services is extremely low. WIth Twitch dominating the segment and having a near monopoly on the market, viewers have little to no options available. While there have been several attempts to diversify and bring in new players such as Facebook into the market, it has met with a lot of resistance from the community. In the case of Facebook, it was mostly due to the poor performance of the Facebook live Video player which resulted in a substandard experience for viewers. But with time, the quality of the new entrants in the segment is going to improve and the end beneficiary is going to be the viewer
At the same time, businesses are always exploring new ways to lure customers to their service. Retaining existing customers forms a core part of their strategy. Viewer interaction is one such way to retain a high number of viewers on the platform. The interactions can come via means of cheering for your favorite team, betting on the outcome of a match as well as predictions on a streamer’s next move. This ensures that the viewers have a direct relationship with the stream and they can feel involved in the stream itself.
A virtual esports market
How many times have you wished you wouldn’t have to pay the 15% tax on the Steam market? Well, Cryptocurrency ensures that there are no fees to be paid, individual websites will be levying their fees on the transactions.
Cryptocurrency provides the ability to create a truly free market for esports fans. The skin economy is a reality and forms an important part of most of the game titles today. Ensuring that these skins are properly priced and a vibrant trading community is possible with the implementation of digital currencies.
Anonymity and Security
Financial transactions in esports depend on regular payment methods. Whether it be Visa, Paypal Mastercard, the transactions rely on regular payment mechanisms. But these instruments of payment collect your information and do not provide the anonymity of cryptocurrency. While fairly secure, they pale when it comes to the use of blockchain technology which is by far the most secure type of transaction.
The security of financial transactions might not be a big issue right now. But as esports grows bigger many of the institutions will become targets. Using cryptocurrency as the primary currency will provide a very high level of security for these transactions. Ofcourse this depends on the widespread use of cryptocurrency in primary financial markets, but esports can pave the way for the same.
Similarities between Cryptocurrency and esports
There are several similarities between the cryptocurrency industry and esports. The two industries are still in a very nascent stage. There are several critics of the two which points towards a dedicated move trying to bring them down. However, their popularity with the new generation is unmistakable. The growth of the two industries comes on the back of the support of the younger generation. There is a lot of resistance from the existing systems who do not want to be rendered obsolete.
While they are vividly different as industries, they have many broad similarities. Gamers might not be knowledgeable about cryptocurrencies and blockchain technology per se. However, most of the problems faced by fans in the esports industry can be resolved with the use of cryptocurrency. The two industries receive massive investments from venture capitalists and brands looking to associate themselves with the younger generation.
The marriage of the two industries will provide a big boost to obtaining acceptance. Cryptocurrency and Video Gaming still face a lot of resistance despite being popular amongst the younger generation.
There are several examples of companies promoting their cryptocurrency in esports. A few examples can be listed below.
- Unikoin ( Unikrn)
These are just a few of the huge number of websites popping up and using cryptocurrency as their preferred medium of transactions. Most of the websites are still launching the ICO
Unikoin is one of the most well-known websites in the esports betting industry. It’s CEO Rahul Sood has been pushing for regulation of esports betting. He has been instrumental in ensuring that skin betting is slowly a thing of the past.
Unikoin Gold is an Ethereum based Cryptocurrency designed for high volumes, to deliver high security as well as affordable gaming transactions. It is in a unique position to take advantage of the intense growth in the two sectors. With an entrepreneur such as Rahul Sood at the helm, the company has seen growth after growth. They are already securing exclusive deals and partnerships with certain titles. However, it does lack the popularity and inroad into the big esports titles such as CSGO, Dota 2, Overwatch etc.
Unikrn has some superstar investors in the form of Mark Cuban and Ashton Kutcher. While they do add to the brand presence of the company, there is a lot of work put into the company as well. UniKoin is available for sale through the partner exchange websites such as KuCoin and RadarRelay.
Rahul Sood is a well-known entrepreneur in the industry. His prior experiences include the creation of the first incubation fund for startups at Microsoft. He also helped launch the Microsoft Ventures in 2013 and is on the board of advisors for Razer, a brand intrinsically involved in esports. He is active in the entrepreneurial community, helping and mentoring a variety of startups.
Unikrn has been minting partnerships in the industry. Their recent brand deal with the Sacramento Kings NBA2k Esports Team is just the first in a line of new unannounced partnerships. Unikrn have been on a hiring spree of late, which suggests more and improved features to come in the near future.
FirstBlood is one of the earliest entrants into the esports-cryptocurrency segment. At its core, Firstblood is a decentralized eSports platform based on Ethereum. It relies on viewer interaction by providing them to bet on games and test their skills. All of this would be without the usual industry problems. There would be no fees, no middleman corruption, no downtime or no hacks.
FirstBlood is powered by 1SŦ tokens and runs on the Ethereum Virtual Machine. FirstBlood is a decentralized eSports platform built on Ethereum. A detailed explanation of the working of the system is explained here. It sold several billion coins within minutes for a total of $5.5 million. The virtual currency was off to a strong start and leveraged the first movers’ advantage to its full extent. Firstblood provides opportunities for viewers to earn 1SŦ coins while viewing matches. The system chooses random viewers to award tokens for watching matches. This is one of the ways that viewers can earn tokens and in turn money while watching matches. The price of a 1SŦ token was quite volatile during the latter half of 2017.
However, it was trading around $1 for the most part with the highs reaching $2.6. The automation of the rewards system convinces the developers of its success. There is also a Matchmaking Ranking which pairs the users with each other based on their individual skill level. The system has a safeguard wherein it will use the User Reputation System which punishes dishonest players. The URS enables the players to maintain a friendly environment devoid of griefing and hacks. It is a system where user feedback is the determining factor while awarding URS points.
Play2live has taken the initiative in becoming the first cryptocurrency powered esports tournament. The organizers who have shown a passion for esports and integrating it with Blockchain technology are pioneers in the industry. They include members who have a lot of experience in esports platforms, via streaming services as well as the massive CIS market.
Play2live’s currency is the Level Up Coin ( LUC ) and has already raised $24 million in its first round of funding. The first tournament saw around 120K different viewers with huge viewership numbers. The Play2live streaming service uses cryptocurrency and blockchain technology. However, the LUC is tradeable amongst viewers, which encourages the interaction between the viewer and the stream. They are already en route to implementing new features such as a subscription system, Peer to Peer CDN, Donation system as well as the much-awaited duels between players. The Duels between players would essentially allow users to wager a certain number of LUC on a 1v1 match.
This would provide users with the opportunity to earn LUC and potentially have enough to trade it for cash. The platform has received considerable funding and is definitely on the path to becoming one of the premier blockchain based streaming platforms in the industry. Allowing viewers to earn money via LUC just by watching streams is a very innovative and novel concept. It has the potential to take off, and if the streaming platform can ensure good quality, we will see the platform grow significantly.
Gimli takes the idea of interactive viewers to the next level. Viewers can use their time spent watching games on services such as Twitch or AfreecaTV. Placing bets on their favorite teams as well as put money on challenges and surveys on stream. This is a very interactive way for earning money while viewing games. Ofcourse the currency used will be in the form of Gimli’s own currency system. Viewers will have the option to directly donate to their favorite streamer as well.
There are various other services which are currently active. Many of these will fall by the wayside as the industry grows. But in the off-chance that one of them can become the dominant player, they can secure a big chunk of the esports pie. Cryptocurrency is the future and esports is growing at a phenomenal rate. If the two industries can figure out a way to utilize each other’s strengths, it has a positive outlook for both the industries.