Why Are eSports Betting on Cryptocurrency?Last Updated:
Esports are on fire right now, with the industry projected to hit almost $1 billion in 2019. Your favorite Twitch stream’s jaw-dropping viewer numbers aren’t a fluke, either: market research from Newzoo shows the global esports audience growing to 380 million people this year, of which 165M are expected to be hardcore fans. Opportunities abound in the booming esports economy, and tons of companies are racing to cash in.
The most interesting, by far, come from another hot industry: cryptocurrency.
Like esports, cryptocurrency has enjoyed rapid growth. Entities like Bitcoin and Ethereum have made headlines for their rising stock, and you can now find multiple crypto exchanges touting other “altcoin” currencies, too. Cryptocurrency developments have expanded beyond finance, hoping to find similar successes in more niche industries.
A growing number of crypto projects have their sights set on esports and gaming. Contrary to what you might expect, though, these projects go beyond simple payments. You can find platforms designed to serve different functions or cater to the needs of different segments. Some focus on helping you manage in-game assets, while others venture into providing cutting-edge systems for esports betting; team recruitment and management; and yes, even the sale and distribution of independently created games.
It seems only natural to merge two booming industries that are busting through their respective niches’ boundaries in record time. But beyond their mutual promising futures, what makes cryptocurrency and esports a good fit?
Where Crypto and eSports Meet
The overlap between gamers and cryptocurrency users brims with potential. According to top officials from Unikrn, a cryptocurrency betting system designed especially for esports, their initial surveys found 70% of gaming audiences already owned a crypto wallet or showed interest in cryptocurrency. A similar study by WAX, an exchange for digital gaming assets, surveyed 1000 US gamers and found that 80% showed interest in using cryptocurrency for game-related transactions.
Gamers, it turns out, are ahead of their peers when it comes to cryptocurrency investments. Across all age groups, more than half of those who identify as gamers already use cryptocurrency. Millennials post the highest numbers here, with 55% already into crypto. By contrast, cryptocurrency uptake for millennials in general sits at 5%. With these numbers, it’s easy to see why crypto has set its sights on gaming communities.
Currently, the biggest questions involve finding the best opportunities to use crypto in gaming circles. Of the gamers who currently use cryptocurrency, for example, a full 87% haven’t tried using crypto for gaming-related transactions before. As WAX’s study further reports, around two-thirds also want more opportunities to use crypto in gaming.
What’s So Great About Cryptocurrency?
All of this begs the question: what makes cryptocurrency so alluring to gamers?
“Both eSports punters and crypto users are young and tech-savvy with a passion for innovative concepts and disruptive solutions that can ease their daily lives,” says Lyubomira Petrova, UltraPlay’s Communications and Marketing Manager, in a comment for Esports Insider.
One of the biggest factors hampering the further growth of in-game and game-related markets is the lack of a common currency that can be used across platforms and borders. Thanks to the web, gaming has gained a strong international tack, and so have the related transactions. However, this also means gamers find themselves wrestling with exchange rates, slow and expensive processes, and spotty privacy and security protections. The lack of clear, regulated systems for in-game asset trading, esports betting, and so on, has also left many game communities and networks vulnerable to rampant fraud and scams.
Many gamers see cryptocurrency and the underlying blockchain technology as viable solutions for many of these problems. Blockchain, in a nutshell, is a decentralized, automated system that validates and performs transactions at impressive speeds. Transaction details are validated and logged in secure digital records or ledgers. Since it’s distributed and automated, blockchain technology would also reduce operating costs and eliminate the need for intermediaries for game-related transactions. Its security measures would also afford gamers more privacy and safety, especially compared to the risks posed by trading on unofficial or underground networks.
Since blockchain isn’t limited to handling payments, it can be used for other transactions like in-game item trades, esports betting, or even distribution of services or goods like copies of games themselves.
Who’s Leading the eSports Cryptocurrency Charge?
Several companies have started making names for themselves in the world of gaming-specific cryptocurrency. Foremost of these is Unikrn, which has steadily built its esports betting presence via the Unikoin Gold currency and acquisitions like the ChallengeMe game tournament platform. (If you’d like to try your hand at esports betting, check out our reviews of the top esports betting platforms on the web.)
Other frontrunners include First Blood, which uses cryptocurrency to handle esports rewards and payouts; and Enjin, a top gaming website builder that now runs Enjin Coin as a tool to help gamers use blockchain for everything from in-game assets to game subscriptions.
You’ll also find several projects like DreamTeam and Chimaera, which skip over payments entirely. Instead, these platforms leverage blockchain to implement new systems for team recruitment, game development, and more. To learn more, you can also check out our overview of seven gaming cryptocurrency platforms to watch.
Can Crypto Crack the eSports Code?
Esports, and gaming in general, have enjoyed dizzying success in recent years. What’s more impressive is that gaming’s revenues and audience count have climbed despite existing issues with the business side of esports, particularly payments and other transactions. Cryptocurrency’s entry into gaming promises to resolve many of those issues and pave the way to even more expansive growth for both industries in the coming years. Companies like Unikrn and First Blood are investing considerable resources into making the gaming and crypto marriage happen, and time will tell if their efforts will pay off.