Demystifying cryptocurrency in esports is a five-part series created in collaboration with Bitcashier, a corporate-focused cryptocurrency trading platform, to unravel the nascent relationship between cryptocurrency and esports.
Part 2 looked at the crypto industry’s existing penetration of the esports space, while Part 3 delves into use cases for cryptocurrency in esports.
Esports is awash with speculative venture capital dollars pumped in by cryptocurrency firms over the last couple years. But what actually is the endgame of this big-money marketing?
As covered previously, there’s significant overlap between esports audiences and cryptocurrency audiences, a lucrative convergence that’s seen record-breaking commercial deals set in esports.
But cryptocurrency offers discernable use cases that go beyond sponsorship opportunities. It offers to solve endemic industry problems — and promises to alleviate others.
According to corporate-focused trading platform Bitcashier, one of the prime use cases for cryptocurrency in esports is the ability to offer prize pool payouts in crypto. That use case stems from crypto’s permissionless and decentralised nature.
Having tournament prize pools in cryptocurrency is an appealing proposition because esports is an inherently global industry. Tournaments take place across countries and continents and can involve players from all over the world, making fiat currency payment options tricky (and notoriously late) in esports.
The borderless nature of cryptocurrency offers a solution, particularly in less economically developed regions. “The use case for crypto — particularly now, what’s happened with world events is pretty relevant — is that crypto is borderless and decentralised,” explained Giles Whitby-Smith, CEO of Bitcashier.
“If you’re an organiser, [especially] in a country where perhaps you’ve got extreme volatilities of currency movements, you’ve got the high inflationary pressures — areas like say the Philippines or Latin America — crypto can be a really really useful, attractive proposition for prize money,” he added.
Cryptocurrency trading platforms like Bitcashier have links to all the major exchanges, meaning tournament organisers can facilitate transfers from fiat to crypto and back again. This potentially offers a flexible and speedy payment option for participants to choose.
Nevertheless, Whitby-Smith stressed that it wasn’t about switching all prize pools away from fiat, or that fiat shouldn’t play a role in esports; crypto simply provides another prize option, one that is arguably native to the industry’s constituents.
Outside of just prize pools, cryptocurrency can also help facilitate cross border payments where it might be hard in traditional currency. Crypto payment options have, for example, already deeply penetrated adjacent industries like gambling and iGaming.
With betting and gambling becoming an ever-bigger part of the esports industry, firms in the esports betting sector can offer crypto as a seamless, native payout option, Bitcashier’s CEO said. “We’re facilitators of existing betting portals within the esports industry — we facilitate them to attract new revenues via crypto.”
Taking advantage of these use cases still has a long way to go, which Whitby-Smith puts down to inertia on the part of existing organisers in esports. Despite esports’ young and innovative slant, old guard gatekeepers don’t see the opportunity for crypto, he said, entrenched as they are in conventional habits for payment distribution and tournaments.
“The companies that might be putting the prize money up generally are, or have investors who are, of the FIAT generation, who still have this sort of ‘crypto is scary we don’t really understand it’ attitude.”
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There are other obstacles to implementation that hinder the wider adoption of crypto in esports — fees, technical difficulties, environmental and political impact all play a role, though exchanges like Bitcashier aim to alleviate them. One of the most persuasive arguments for implementing these use cases, however, is that cryptocurrency is already particularly native and endemic to esports’ core audience.
“For the younger generation and those predominantly under 40 who are involved in esports, many of them already hold cryptocurrency accounts or have wallets,” Whitby-Smith added. “So it’s sort of a bit odd if there isn’t an option for esports tournaments to have a BTC prize option.”
In part 4 of this series, Bitcashier and Esports Insider jump into emerging and potential future use cases and applications for cryptocurrency — which are increasingly becoming viable as esports entities embrace blockchain technology more broadly.
Supported by Bitcashier