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 3 dove into current use cases cryptocurrency already provides in the esports industry, while Part 4 explores emerging and future use cases.
As cryptocurrency penetrates further and further into industries and economies worldwide, use cases for crypto in the global esports industry have become increasingly apparent.
Using cryptocurrency for tournament prize pools may offer a convenient antidote to the byzantine cross-border payment issues experienced by tournament organisers attempting to distribute money to teams from across the globe.
It can also be an attractive proposition for many aspects of esports, from prize money to merchandise, especially in countries with high inflation and volatile currencies — though cryptocurrencies have their own share of volatility worries.
Additionally, with esports’ increasing proximity to the betting and gambling industry — in which crypto is already deeply embedded — esports entities offering cryptocurrency payment options seems to follow logically.
We’re heading into a future where crypto, Web 3 and the metaverse only seem to be gaining more and more traction — especially amongst esports’ younger audience.
Esports teams and tournaments will therefore eventually have to offer crypto payment options for merchandise and prize pools to stay relevant, said Giles Whitby-Smith, CEO of corporate-focused cryptocurrency trading platform Bitcashier.
However, while demand is growing, Whitby-Smith highlighted that using crypto as a currency in the real world remains a way off. “Nine times out of ten you can’t go out into the streets and spend your crypto for a loaf of bread or cup of tea or your rent.”
He continued: “You still need to exchange at some point. You still need to come back to us to do that exchanging. And that’s where we still fit in in this space.”
Moreover, companies have come under fire in esports and gaming in recent years for using cryptocurrency to avoid regulation. Twitch streamers have received backlash for promoting shady crypto gambling companies on-stream.
Additionally, Danish esports organisation Astralis quickly terminated its partnership with online crypto casino Roobet, which was found to not be legally accessible or regulated in Denmark and much of the West.
Esports teams and tournaments will therefore eventually have to offer crypto payment options for merchandise and prize pools to stay relevant, said Giles Whitby-Smith, CEO of corporate-focused cryptocurrency trading platform Bitcashier.
However, while demand is growing, Whitby-Smith highlighted that using crypto as a currency in the real world remains a way off. “Nine times out of ten you can’t go out into the streets and spend your crypto for a loaf of bread or cup of tea or your rent.”
He continued: “You still need to exchange at some point. You still need to come back to us to do that exchanging. And that’s where we still fit in in this space.”
Moreover, companies have come under fire in esports and gaming in recent years for using cryptocurrency to avoid regulation. Twitch streamers have received backlash for promoting shady crypto gambling companies on-stream.
Additionally, Danish esports organisation Astralis quickly terminated its partnership with online crypto casino Roobet, which was found to not be legally accessible or regulated in Denmark and much of the West.
According to Whitby-Smith, that’s why making sure crypto proceeds in esports are transparent is important. “There is a need for compliance and KYC because the question is going to be asked, ‘well, where is this from? What was the source of these funds?’ And then the other side of that is that many banks still won’t accept fiat [currency] that’s come from crypto.”
He also said that many banks will refuse to take money from crypto trading unless it’s from a regulated supplier or service provider. Some even flat out refuse to deal with the proceeds of crypto.
Services like Bitcashier offer conversions to make cryptocurrency more useful in the real world, which is increasingly important as crypto continues its full-on assault on the esports industry.
At a time when the crypto market is in the midst of a significant crash and experiencing major volatility, such services are even more essential. Being able to convert crypto to fiat if and when deemed necessary is vital as cryptocurrency options are added to tournaments, online payment platforms and other places in the esports industry.
Whitby-Smith said: “When you get these big market drops, people will think ‘that’s fine so long as we can exchange our prize money straightaway into fiat because we feel more comfortable’. They don’t want to be holding the Bitcoin and suddenly find it’s worth half of what it was last year when you need it.”
The recent cryptocurrency market crash does underscore the risks of dealing with the speculative asset, but risks are always inherent in an emerging technology — a technology Bitcashier thinks has many upsides in esports.
“From the point of view of [esports] being digital, and something of the future, it doesn’t really make any sense for it not to be adopting what is potentially going to be a form of value alongside cash.” Whitby-Smith concluded.
In Part 5 of this series, Bitcashier and Esports Insider will look to the future to discuss the role cryptocurrency may play in the industry years from now, after the hype and dust have settled on the esports x crypto craze.
Supported by Bitcashier