Does the future of football funding lie in cryptocurrency?
Football's relationship with technology has not historically been the best. Just a few years ago, David de Gea's move to Real Madrid failed because the fax machine was too slow. But now there is a breakthrough as cryptocurrency finds its way into the world of sports.
Former Real Madrid striker David Barral made transfer history in early 2021 when he became the first footballer to sign with Bitcoin as payment. The Spanish team Dux International announced the move on Twitter and said: “He is the first signatory in the history of cryptocurrency. Thanks to Criptan, our new sponsor, who made this possible. "
They aren't the only club trying out crypto, however. Italian Serie C club Rimini FC sold their 25% stake with Quantcoin, players AZ Alkmaar were the first in the Netherlands to be paid in Bitcoin, while Premier League Watford wore the Bitcoin logo on their shirts.
What are Bitcoins?
Like any other currency, Bitcoin is a medium of exchange. It was the world's first virtual currency when it was introduced back in 2009. It is created through a process called cryptography, which is 'essentially the art of knitting various encryption codes', explains University of Liverpool Senior Lecturer in Business and Sport management David Cockain.
Key facts:
There are no banknotes or coins, the values appear as numbers on the screen.
New Bitcoins are created by a process called 'mining' on a supercomputer using complex code
New Bitcoins are not minted, they are produced by the people and businesses that run computers around the world
The industry has realized that digital payment systems can attract sponsors and further monetize fan engagement. How? Via fan tokens.
Supporters can easily download the app and purchase tokens that give them access and influence over certain things at their favorite club, such as kit designs and pre-match music.
Alexandre Dreyfus, CEO of fan token platform Socios, believes that this is only the beginning of a change in the relationship between fans and clubs.
“We believe that fantasy games and digital assets in general certainly, may not change football, but it will be part of the distraction needed to really bring sport and football a little closer to the fans. We think that in the next five to 10 years, the relationship between fans and clubs will grow from passive fans to active fans."
Socios already has more than 60 clubs to their name, including football giants like Barcelona and Man City. Even Lionel Messi went along with it by accepting fan tokens as part of his welcome package at PSG, but not everyone was on board.
“They say everything is very crypto, very technological. It's 'we don't understand it, but it's really cool'," said financial expert David Gerrard.
And I don't see many of them taking off in the future because crypto bits are just for marketing, it's really just tokens for fans to trade or get stuff in stores or whatever.
Another crypto by-product that is gaining momentum is NFT which is also known as 'non-exchangeable token'. NFT is like a physical collector's item but a digital asset where unique data is added to the file to represent ownership. It can be anything from videos or pictures of important sporting moments like Messi's first goal or digital trading cards, but some may come at a price. Just a few weeks ago, a unique digital NFT card featuring Cristiano Ronaldo was on sale for €353,400.
Crypto may be complex, it may be unstable, but it is still here. As the explosive interest in digital currencies increases and more and more football clubs embrace it, are we ready for the future of Bitcoin wages, in-app fan decisions, and virtual card trading?
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