Tipping with Cryptocurrencies

Aside from prizes from online competitions, one of the main income streams that helps hopeful professionals to play full-time are tips from fans via donations on YouTube and Twitch.

How big is it? The size and growth of the industry is staggering. Twitch.tv, the leading eSports streaming site accounts for more peak internet traffic than Facebook and Amazon. Users of the site watch an average of 421.6 minutes per month on the Twitch platform only. More people watched the Season 3 finals of League of Legends (eSports game) than watching the MLB World Series or the NBA Finals; roughly 32 million viewers in total. Finally, the industry is expected to generate roughly $5 billion in 2020.

The main payment processor these platforms use to process donations is PayPal. If instead of using PayPal, gamers were to receive donations via cryptocurrencies over blockchains; the “charge back problem” would be eradicated. The chargeback problem comes from users abusing the ability to refund their donation which causes the Streamer to lose money in paying for the chargeback fees.

The way how cryptocurrencies can solve this is:

• You cannot ask for a chargeback via cryptocurrencies; and
• Every transaction would be logged on blockchains, so it would be impossible to claim that someone else had made a payment other than yourself; which is the most common excuse for chargebacks.

Payments would also be able to be processed and funds would be available to streamers almost instantly. This is different compared to traditional methods where the long waiting times and high fees they experience with PayPal today.

Smart Contracts to Protect Player Rights

As leagues have become franchised; prizes, salaries, and sponsorships that have ballooned with the size of global audiences; players’ rights have become the “elephant in the room” in the industry. In a recent interview, eSports lawyer Ryan Morrison suggested that agents and sponsors have been taking advantage of eSports players who were inexperienced in understanding contracts and sponsorship deals.

Considering eSports careers are notoriously short compared to other sports, a movement has emerged in the last few years to protect players’ rights. League of Legends producer, Riot Games recently announced plans to launch an official players’ association. It is similar to a traditional workers union which defend the players’ rights, and support them in conflicts arising contracts or sponsorship deals.

Another option would be for eSport players to request “smart contracts” which are saved on blockchains. Due to the decentralized nature of blockchains; all parties, teams, players, and sponsors would be able to set their terms, obligations and requirements in data on blockchains. This resource would permanently saved and cannot be adjusted or deleted by either party.

Examples of this use case can be:

• Players can set a certain percentage that they would be paid for each tournament win
• Set a monthly salary, which could then be actioned directly by information within the blockchain itself, meaning that teams and agents would have no choice in paying what was due.

Exclusive in-Game Items and/or Collectibles

This is something that has emerged recently in popular games like Fortnite and CS:GO where players can collect “skins” for their virtual players and inventory. Due to the rarity of some of these skins, a new market has emerged where users re-sell accounts with virtual skins for fiat currencies. Two examples of this can be seen in both of these popular games:

• CS:GO skins and all other Steam Market items are subject to a $400 maximum listing price. Items are often sold for greater sums through key trades in third party markets. In late 2017, the Dragon Lore CS:GO weapon skin sold for more than $61,000.
• On eBay, Reddit, and on gaming focused auction sites, Fortnite players are selling their accounts for real money. Often they’re asking for just two or three pounds, but sometimes the price is set at $400, $600, or even up to $1000.

A good example on how Blockchain and Crypto can adapt to this is “Crypto Dragons”. Crypto and Dragons are a Decentralized Application (DApp for short) built on the Ethereum Blockchain. Gameplay revolves around collecting, training and battling monsters against other players. These monsters, which can be bought and sold in the marketplace, are solely owned by the user and therefore cannot be replicated, taken away, or destroyed. They are tradable with WAX Tokens (the platforms native token), Bitcoin or ETH. As the popularity of Blockchain games and Crypto Collectibles grows, so does the need for a trustworthy marketplace.