Sports and Blockchain: Unlikely Bedfellows

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Blockchain technology exploded into public awareness with the launch of Bitcoin and other cryptocurrencies. It requires a computer-science degree to understand the special benefits of blockchains when it comes to digital currency, but everyday people are starting to understand that blockchains have the potential to solve persistent problems beyond cryptocurrency: supply chain management, digital IDs, international remittances, and much more.

With their public key encryption, distributed architecture, and support for decentralized applications, blockchains may seem more at home in the computer science lab than at the ball field. But a surprising number of sports teams have launched major blockchain initiatives – most of them related to non-fungible tokens, or NFTs.

NFT Basics

Imagine inheriting a gold ring or receiving one as a gift. You’d probably want to know the ring’s value, right? You’d take the ring to a jeweler’s shop for an appraisal.

But the appraisal isn’t the final story. If it was your grandmother’s wedding ring, it has a one-of-a-kind provenance that adds to its value. No jeweler’s assessment can tell you what it is worth to you because it is unique.

Rings that have no sentimental value, that have no unique worth, are fungible. The word “fungible” is a bit of jargon that lawyers in the insurance industry use to describe generic objects that can be replaced with items that are essentially identical.

Most cryptocurrency coins and tokens are fungible. One Ethernet coin is the same as any other. But some tokens are associated with unique real-world items — artistic masterworks, for instance.

When you purchase the tokens, you are purchasing partial or full ownership of that single unique piece of art. That ownership is represented as an NFT, meaning “non-fungible token.” NFT tokens work like serial numbers: They have a unique relationship to the online or offline commodities they are associated with.

Every fungible token has exactly the same value, while non-fungible tokens can each have a unique value based on the NFT coin’s relationship with an underlying asset. That means NFTs are bought and sold according to market factors, including the rarity, inherent value, investment potential, and significance of the associated asset.

Sports NFTs: Beyond Bored Apes

In their most widely publicized incarnation, NFTs are associated with digital cartoon images of bored apes and nerdy punks. But many sports teams are starting to make NFTs a central component of their efforts to build and engage a large fan base. Socios is a leading fan marketplace for sports NFTs. The site currently supports more than 50 professional sports teams with NFTs that give fans unique benefits.

For example, fans who have purchased NFTs may be invited to special events where they can meet players. They may get preferred seating at sporting events. Some teams send T-shirts signed by team members. Others allow NFT holders to choose the music that will play in stadiums when the team is introduced or when a team member scores a goal.

Socios started by connecting European football clubs with fans, but the platform has branched out. Today it provides NFT-based services to clubs in many sports: football, gaming, fighting, motorsports, basketball, tennis, American football, ice hockey, mls, rugby, and more.

You can visit the Socios website to purchase NFTs to support particular teams. If you want to invest in the platform itself, you’ll need to visit a cryptocurrency exchange like Kriptomat and purchase the tokens that power the site: Chiliz (CHZ). Chiliz tokens serve as the internal currency at Socios, and buying Chiliz is like investing in the Socios platform.

Socios offers a unique framework that sports franchises can use to increase revenues and engagement with fans. But when it comes to sporting tokens, it is far from the only game in town. You can also pick up sports NFTs at OpenSea, Rarible, Aetsoft, Enjin, Accubits, Nifty Gateway, AirNFTs, Sorare, Dibbs, and other platforms.

Straight to the Source

Many sports teams, players, and leagues have embraced the ethos behind blockchain technology by bypassing marketplaces and offering NFTs directly to fans.

For example, America’s National Basketball Association offers Association NFTs, a set of tokens representing professional basketball players. These “dynamic” NFTs change their appearance based on the real-world performance of the players they represent. A bustling market of buying, selling, and trading funnels commissions into the NBA’s pockets.

Major League Baseball is working on a similar initiative. And in 2021, the New Jersey Devils ice hockey team became the first NHL team to sell its own NFTs.

Prior to Association NFTs, the NBA worked with Dapper Labs to create NBA TopShots, NFTs that were associated with great moments in basketball history.

The FC Barcelona football club has created its own cryptocurrency – not an NFT, but a general-purpose cryptocurrency, the FC Barcelona Fan Token, that trades as BAR.

Most NFT marketplaces require customers to pay for NFTs and associated fees using cryptocurrency. As a result, the first step of a sports NFT journey may be establishing an account at an easy-to-use cryptocurrency platform like Kriptomat.

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