Non-fungible tokens have shown to be a successful method to generate new sources of income in many sectors, including in the sports, arts, film, gaming industry, and more.
The sports industry is full of variables, which makes it a perfect arena for experimentation. The industry is well aware of the value of these tokens but is still exploring their practical application.
Before we start exploring the possibilities, let's first understand what NFTs are and how they work.
What are Non-fungible Tokens?
Non-Fungible Tokens (NFTs) are digital assets that can be used for unique things. Unlike fungible tokens, which represent a basket of goods, such as coins or currency.
NFTs are unique and can't be replaced by other NFTs: each one is different from the other thanks to its identity (the cryptographic key). It's similar to owning a car with your name on it; you can share your car with someone else, but you can't replace it with another one of the same color & model.
They are the perfect tokens for unique items, which one cannot transfer to another person. Just like physical collectibles, players want their piece of history. These works of art or objects can be traded in a peer-to-peer fashion using dedicated protocols.
Now that you know more about NFTs, we’ll look at some of the possible applications of this technology in the sports industry. Decentralized marketplaces are one good example, which is built on top of blockchain technology that enables an open & transparent redistribution of ERC-721 tokens.
Now, let's explore the possible applications of NFTs in the sports industry.
Crypto Collectibles
One great area where blockchain & NFTs have shown to have a successful application is Crypto Collectibles! These are digital assets, which can be bought, sold, or traded on the blockchain. The tokens also provide additional benefits to their owners. They are different from traditional collectibles in that they are more of intellectual property.
Every player wants to own a unique item, which cannot be replicated or substituted with another player's token. Similarly, Crypto-Collectibles allow individual players to have their assets on the blockchain. These digital assets can be traded easily with their cryptographic address & secure identity attached to them.
Some of the popular crypto-collectibles are CryptoKitties, Crypto All-Stars, and Etherbots. They have their value & trading price on the blockchain. These digital assets can be used for various purposes in different industries.
For example, they allow players to play a game with these collectibles without spending any money. The value of these tokens only increases with time due to the demands and scarcity factor.
Crypto-collectibles can also be used as a unique identity for athletes, representing them wherever they go. Just like other crypto-assets, NFTs can give you voting rights & entitlements and play an active role in your favorite sports league.
Moreover, these tokens are great for trading. They can be bought or sold online with ease. A new market & trading platform is created every time a unique token comes into existence. The overall experience becomes more personal and people feel connected to their favorite league due to these tokens being unique & one of a kind.
Cryptocurrency that represents players influence in the league
There are many other applications of NFTs in the sports industry. One such is a cryptocurrency, which represents the value of a player's influence, performance, and popularity in the sports league.
A Decentralized Autonomous Organization (DAO) can be created using blockchain technology that allows you to reward players for their contributions to your favorite sport or club.
One interesting use case would be to see if any ERC-721 token can represent the value of a player's jersey or perhaps their jersey number, which cannot be substituted with other players in the team.
The idea is to create NFTs for unique & one of its kind physical objects using decentralized technologies. This will enable fans to own something that is of sentimental value to them and it can be passed on from generation to generation.
Virtual real estate and ticketing
NFTs may be utilized in a variety of applications, including virtual real estate and ticketing. Fans could purchase a unique portion of their favorite clubs, giving them unique insights and a great experience overall. The current method of ticketing in sports has several problems, such as counterfeiting and other legitimacy concerns.
Virtual Property in Sports
Currently, the majority of people that attend sporting events do so using paper tickets. These are easy to reproduce or share, which gives rise to increased prices for sports fans and lower revenues for teams. For instance, after the lottery conducted by The Sacramento Kings where they began selling virtual items called CryptoCurrency Kings (CCK) in the form of digital assets to pay for tickets, seats, and other team-related items.
Fans purchase tokens representing fractions of CCK. They can then spend these tokens on anything available at the Kings Team Shop website. Notably, they may be split into smaller pieces so that users receive unique combinations rather than having to buy fractions of a single CCK. This allows Kings fans to diversify their portfolios without having to purchase very expensive items or fractions of large amounts of CCK.
Ticketing Issues in Sports
Currently, ticket resale is undermining the economics behind some sports teams and events. Organizations that are unable to regulate ticket sales may end up with a significant number of free agents who are looking to purchase tickets for resale at higher prices.
This occurs most commonly with sporting events, such as professional basketball and football games and some concerts. For instance, the secondary ticket market is valued between $5 and $25 billion in North America alone, with online platforms like StubHub and SeatGeek capturing significant portions of the market.
As it stands, teams barely capture any revenue from these purchases since ticketing companies like TicketMaster get most of the profits after paying the team for the tickets.
