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Saturday, July 2, 2022

Crypto is the new currency for athletes

Bitcoin and NFTs are the new preferred payment method for athletes who wish to directly invest

 

By KATHERIN RAYGOZA- sports@theaggie.org 

 

Cryptocurrency is creeping into the sports industry after many leagues suffered financial losses due to the COVID-19 pandemic. To recoup their losses, professional sports organizations have turned to cryptocurrency as a form of compensation for athletes who wish to further their investments. 

After former Arsenal full back Kieran Gibbs received half his pay in Bitcoin while playing for Inter Miami CF, the Premier League for soccer in Europe, begun talking about including cryptocurrencies as the players method of payment. This caught the attention of several other plays and it could be the future of English Leagues.

“All roads lead to Bitcoin,” Gibbs said. “It’s just going to take time for people to trust what this thing is. It’s similar to what we saw on the internet, I believe. It took a long time for that to happen, and now many people believe you can’t live without it. It’s an avoidable part of our lives.”

Cryptocurrency is a digital payment method and/or currency that doesn’t require authorization from banks or trusted third parties to verify transactions. Instead of having access to physical dollars, people can now make payments purely as digital entries. Thousands of different types of cryptocurrencies exist, including Bitcoin and a Non-Fungible Token (NFT), which are one of the most popular ones today.

The main aspect of this type of currency creates units of cryptocurrency that are found through a process called mining, which uses units that are kept in cryptographic wallets, but uses generators that can be downloaded onto a computer to create these units. 

Cryptocurrency first entered the National Football League (NFL) in May 2019 when former offensive tackle from the Carolina Panthers, Russel Okung, tweeted that wanted to receive his pay in Bitcoin. A year later in 2020, he let the world know that he has become the first NFL player to receive his salary in cryptocurrency. At the time, Okung was making $13 million and received 50 percent of his earnings in Bitcoin. 

The NFL is using Zap Strike  — a Bitcoin investment and payments company that transacts over the “Lightning Network.” This means that Zap Strike facilitates ordinary currency into Bitcoin almost instantly. 

New York Giants running back Saquon Barkley earned more than $10 million in endorsements and sponsorships deals and decided to start having his entire income from these deals converted into Bitcoin

“You see inflation,” Barkley said. “You see how high it is right now, and you learn that you can’t save yourself to wealth. That’s why I’m going to be taking my marketing money in bitcoin.”

Since some sports seem to be appealing to crypto nowadays, it represents an opportunity for cryptocurrency companies to expand their network. Crypto is appealing to the sports industry because its most popular players are currently earning more money with the investments they are and also. This is happening at a time when teams are still financially recuperating from the pandemic.

“They’re beginning to exhaust the early-adopter market,” Columbia Business School professor R.A. Farrokhnia said to Sports Illustrated. “They have an incentive to try to increase the market, the number of participants, the volume of trades and so on.”

So far some players from the NFL, MLB, NBA, and MLS are currently using cryptocurrency. Many crypto companies are attempting to make their way into the sporting world, but explaining crypto to fans or people who watch is something that is tricky — particularly in the limited amount they can explain in a sports advertisement. Because of this, they instead focus heavily on building trust. 

As crypto slowly is being incorporated into sports, it is also becoming widely used as a form of payment amongst the fans. Tickets and merchandise are being purchased through cryptocurrencies, allowing the clubs to pay for the players’ salaries allowing them to transfer their fees. 

Despite the rise of excitement and opportunities in crypto-assets in the sporting world, there are many risk factors that sport clubs are conscious of. The value of assets in crypto continues to grow, but there are many risks involved that still remain uncertain. 

 

Written by: Katherin Raygoza — sports@theaggie.org 

 

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