Digital Athletes

Next Generation Sporting Warriors

eSports puts the competitive video gaming experience center-stage for the world to take notice. While live events and tournaments have long been a part of video game culture, broadband live streaming has radically widened the audience. Over the last couple of years, eSports has been the fastest growing segment of the digital entertainment industry.

In 2017, its value reached $1.5 billion and is forecasted to grow up to $2.3 billion by 2020, according to data from Superdata Research. In the eSports world, speed of transactions is vital.

Despite its enormous potential, there are gaps that can be improved upon. For one, game makers are closing off their eco-systems which prevent other services from feeding off of real-time data. To this, the idea of implementing Blockchain technology is presented. Blockchains are decentralized digital ledgers on which information is saved publicly. Their most popular applications and cryptocurrencies have moved from a seeming fad, to a potentially disruptive alternative form of storing and transferring funds or information.

eSports Industry

Use Cases of Blockchain and Cryptocurrency

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., 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.

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eSports Betting

Just as with casino gambling, eSports betting benefits from blockchain technology. The technology creates a trust-less, secure ecosystem for low fee betting outside the control of a central party. This opens up jurisdictions that are notoriously strict on betting to a whole new market of gamblers.

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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.
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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.

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Middlemen Redundancy to Compensate Players

As eSport events grow in popularity, they are catching the eyes of the mainstream media channels and advertisers, who also sponsor in pumping funds into prizes. In 2017 on a game titled DOTA 2 (Defence of the Ancients), the International 7 competition prizes ended up reaching almost $25 million in total.

Just like traditional sports, eSports are either individual-based or team-based. Competitions are organized in leagues or tournaments throughout the year, with the best players competing to the finals. When representing as an individual rather than a team, players are at risk of being treated unfairly. To represent the unrepresented, a number of blockchain startups have emerged which aim to democratize access to tournaments and also make sure that players get their fair share of the prize money when the final whistle blows.

FirstBlood, which harnesses the Ethereum Blockchain, decentralizes tournament setups and winning distributions. This means that players are guaranteed their winnings will be delivered straight into an e-wallet, rather than having to lose money through expensive money transfers or middleman payment processors taking a percentage of their cut.

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While most of the buzz around Blockchain and gaming to date has been centered around Cryptocurrencies designed for eSports gambling, there are many ways which Blockchains can make positive changes to the industry as a whole. In the same way as traditional sports have become highly legislated over the years to protect the interest of players and teams, emerging technologies will help eSports get up to speed, much quicker.

If this use cases above is relevant to your industry and you would like to discuss further, please reach out to us on for a free, no commitment consultation.

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