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How Crypto and Esports Are Fueling Each Other’s Growth

Written by:
Aaron Goldstein
Published on:
Aug/04/2022

Decrypt has an excellent piece on how how the eSports and digital currency sectors are becoming increasingly intertwined.

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The two sectors continue to engage in sponsorship deals plus collaborated on NFT and gaming projects and more.

A perfect example cited is the FTX crypto exchange announcing a 10-year, $210 million sponsorship and naming rights agreement with leading esports club Team SoloMid (TSM) June of last year. Two months later, FTX announced a seven-year deal to sponsor Riot Games’ League of Legends Championship Series (LCS) league.  Details of that particular deal were not disclosed.

Crypto firms want the esports audience—and esports startups need the cash, writes Andrew Hayward of Decrypt.

eSports teams continue bleeding cash.  Countless teams and leagues have crumbled and faded along the way, Hayward observes.  And as teams choose to go public, their struggles become more visible.

One such team, Guild, lost a stunning $6 million in the last half-year period.

“Running an esports team is a labor of love and the promise of a big outcome someday,” said Mark Donovan, co-founder and CEO of Web3 startup Kolex, which offers esports team NFTs. “Even running an esports tournament organization is a lot of the same, and it has been for 20 years. It’s not for the faint of heart, that’s for sure.”

Even the most successful eSports teams are not immune.

TSM FTX and 100 Thieves—which Forbes claims are the two most valuable teams in esports—both laid off employees, just as many crypto firms did, Hayward notes.

eSports teams do not attract the type of mainstream attention that traditional sports leagues do, "but for an audience that has potentially significant overlap with that of crypt, esports sponsorships could provide greater value," Hayward writes.

“Relatively speaking, for the audience size and how it fits with these companies, the price tags are not very expensive to sponsor these leagues right now,” said Donovan. “Going out and sponsoring a [traditional] sports league is way more expensive, and probably not as good of a bang for your buck.”

What is the New Internet?

Well, unless you were born before the age of Bon Jovi, you wouldn’t know that the internet was not always a welcome idea among the government policymakers and big computing companies at the time it was introduced, writes Jerry Chan in an opt-ed for our colleagues over at CoinGeek.com, noting that the internet began as a military network with much pullback when it came to introducing an open computer network. 

Chan writes that the new internet is all about peer-to-peer transactions.

Chan writes:

When the tech giants lost control over the network technologies and hardware markets, they shifted to the role of communication intermediaries. Few understand that when you use the internet today, you are not communicating directly with your peer. You are communicating with a proxy company, their internet service provider or ISP, who then forwards those messages to the receiver. This is much like the current banking system. When Alice transfers money to Bob, she just initiates a transfer request to her bank, which then sends instructions to Bob’s bank, and debits and credits are done accordingly. There is actually no involvement of Bob at all. Bob’s money is sitting in an account at Bob’s bank.

Although the banks are legally unable to take Bob’s money, they can refuse to accept transactions incoming to Bob in certain circumstances.

The banks are analogous to ISPs. You rarely, if ever, communicate directly with another network peer. Your ISP could block access to your PC or home devices if it was legally impelled to.

Chan observes that, in the whole scheme of things, few folks really cared about how the internet worked as they were too preoccupied with whether or not messages reached their destination.  True eCommerce must think beyond that concept.

Enough addresses for every person on the planet(s) for all our communicating devices in the foreseeable future. The key point is that, with each person and device having its own unique address, we can finally realize the dream of the internet. To have true peer-to-peer communications and be able to conduct trusted commerce with no middlemen.

Chan also draws a direct correlation with Bitcoin.

You may have realized how similar this notion of unique addresses is with IPv6 internet and Bitcoin. In fact, Bitcoin, as designed and released in 2009, solved the problem of having unique addresses for every possible transaction and exchange. With this innovation, Bitcoin was the first truly successful implementation of digital cash, which is also a peer-to-peer transaction (in contrast to the bank account analogy, which has middlemen). And though Bitcoin the coin (if used properly) is peer-to-peer, the coins themselves were still being passed through the intermediaries1 of our existing IPv4 internet, the ISPs. But with IPv6, we finally have the ability to go fully peer to peer. Meaning we will be able to conduct trade, having complete trust in the other party because they have identified themselves and have a verifiable unique Internet address which is registered to themselves, a natural person. And with the addition of Bitcoin addresses, we can have verifiable unique addresses for every unique transaction between each person/device.

- Aaron Goldstein, Gambling911.com

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