Blockchain, eSports, and increased transparency.
During the last few years, both blockchain technology and eSports have seen a large increase in popularity. Esports has transitioned from being declared “not a real sport” by the head of ESPN, to being regularly shown on the Worldwide Leader, and even accepted as a medal sport for the Asian Games that will be held in 2022.
As for blockchain, these decentralised digital ledgers which publicly save information, and of course their most popular application- cryptocurrencies, have developed into a truly disruptive form of transferring money or data.
Besides from the launch of a few different esports betting token ICOs, blockchain seems to have made little impact in the esports industry but this could be about to change.
As esports leagues become more professional, there has become a need for them to be more legislated, more professional and to provide increased rights for players including fairer pay and contracts. In other words, there need to be fewer grey zones and much more transparency for everyone involved. This is where blockchain comes in as its transparency and the way it adds a permanent block to a public chain where it cannot be falsified or eradicated. The blockchain becomes a perpetual source of information for parties to confirm and complete transaction and everyone can see when someone has or hasn’t held up their end of the deal.
There are three ways in which blockchain technology will drive change in the world of eSports.
TIPPING WITH CRYPTO
Apart from online competitions and prizes, one of the main sources of income for helpful pros are the tips that they receive from fans via PayPal. Back in 2013, a mystery donor called Amhai started giving donations of up to $50,000 to World of Warcraft streamers such as Isaac Cummings-Bentley and Chance Morris. These huge donations are not regular occurrences. Fans usually donate a couple of dollars here and there, but there is always the risk of chargebacks. A chargeback is a system that was designed to protect customers from online fraud, but as with most things, a few have found a way to abuse it.
An individual can make a serious amount of donations using a credit card, via PayPal and then they can lodge a chargeback request via PayPal and sometimes get the full amounts returned. Should it be approved, the streamer will have to return the cash and they will also have to pay a fee to the payment processor.
If gamers were able to receive donations via cryptocurrencies over the blockchain, this problem would cease to exist. For one, you cannot ask for a chargeback when you are using cryptocurrencies, and secondly, every transaction is logged on the public blockchain making it impossible to say that someone else made the payment. Whilst this is a big plus for gamers, it could result in headaches for other consumers who fall foul to hackers because as most blockchain users know if your ewallet gets hacked, it’s almost impossible to get it back.
This idea of tipping with cryptocurrencies is not a new one as Dogecoin was originally used to tip people for making or sharing great content. Another daily fantasy eSports site has even developed its own cryptocurrency, Skrilla. These tokens use the Ethereum blockchain and users can use them to take part in daily fantasy contests as well as entering contests with fiat currency to compete for a fiat payout as well There is also Unikrns Unikoin Gold which was made with eSports betting in mind. As more of these tokens are created, it is likely that we will see cryptocurrency token tipping become more popular and more secure as time goes on.
SMART CONTRACTS TO PROTECT PLAYER RIGHTS
As esports leagues become franchised, prizes, salaries, and sponsorships have increased at a drastic rate and players’ rights have become something of the elephant in the room. In a recent interview, a leading esports lawyer, Ryan Morrison suggested that both agents and sponsors are taking advantage of eSports payers’ lack of experience with things such as contracts and sponsorship deals.
There have been many examples of teams sidestepping contract clauses to fire players if their performance took a dip, or to avoid paying salaries as a result of imposing “fines”.
As esports careers are incredibly short when compared to others, a movement has begun in the last few years to campaign for the protection of players rights. Riot Games, producer of League of Legends recently announced its plans to launch a players’ association similar to a workers’ union which would defend the rights of players.
Another way of doing things would be for esports players to request the use of smart contracts. As the blockchain is decentralised it means that all parties- teams, players, sponsors etc- would be able to set their terms and requirements in data onto the blockchain. The resource would then be saved forever and would not be able to be changed, edited, or deleted by any party.
This means that players would be able to set a certain percentage that they would receive for each tournament win, or even a monthly salary that would be actioned directly from information in the blockchain itself, meaning teams and agents would have no choice but to pay up. Whilst this is a great idea, it is still a bit far off as we would need to create a platform that can check if the clauses in the contract are executed, and then send the request to the smart contract for payment.
GETTING RID OF THE MIDDLEMAN
As esports continues to grow in popularity, they are beginning to get interested from mainstream media channels and advertisers. Whilst most popular esports are team-based competitions that are organised into leagues or tournaments, there are events such as Hearthstone which individual players can compete in as well. When a player represents themselves, rather than a team, there is a greater risk of the player being treated unfairly. To be able to represent the unrepresented, a number of blockchain startups have emerged which aim to democratize access to tournaments and make sure that players get the right share of prize money at the end of the event.
Firstblood uses the Ethereum blockchain and it decentralises the tournament setup and winning distribution, meaning it is guaranteed that all winnings will reach the right person as they are sent to an ewallet. Eloplay has another platform which is able to detect cheating and foul play as well as rewarding players Elo-coins for every win.
Whilst most of the excitement and hype around blockchain and gaming has been in relation to cryptocurrencies designed for esports gambling, there are other ways that blockchain can help. As traditional sports have become highly legislated over the last few decades, it seems that esports will be helped by emerging technologies to reach a similar level.