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While cryptocurrency started off as an investment opportunity, it has now made headway into use as an alternative to fiat currency for payment. There is still much we need to understand about this wonderful technology but what we have seen is the disruption it has caused in traditional money markets. Simply put, cryptocurrency is a digital currency or asset used as a means of exchange and is kept in a digital ledger which is in the form of a computerised database.
Noone has claim or control over the life cycle of cryptocurrency, and governments cannot exert custodianship, hence the huge interest that has been sparked worldwide. Bitcoin especially, is what most are familiar with, and its use has spread to various industries, mostly in gaming and sport. In 2021, there are 4000 crypto currencies in circulation versus 158 fiat currencies we are accustomed to. There is therefore no denying that in the very near future, cryptocurrency may as well be the dominant mode of exchange across the globe.
Current use-cases for Cryptocurrency
Cryptocurrency infiltrated the gaming industry around 2009. Now, more than a decade later, you can imagine how seamless the experience is when you opt to use virtual money. The technology has improved such that if you like playing online slots or any game for that matter, you can now earn, spend, or exchange assets using cryptocurrency. Transactions are fast, and there are no exchange rate woes to worry about when you translate your winnings into local currency. Neither will you have to deal with a middle-man that also requires payment, or hidden fees. This has been a highly attractive pull for gamers to start using cryptocurrency world-wide.
In addition to the above, we also learnt that in online gaming, cryptocurrency can be used for in-app purchases, in-app advertising, and affiliate marketing. With in-app purchases, a gamer can buy coins, extra lives, or additional characters in the game. In in-app advertising, players earn the currency by watching ads, finishing specific tasks, and filling out surveys. And on the affiliate marketing side, gamers can click on links within the game to refer a friend, earn rewards or sign up for free offers.
The recent pandemic shook the sports industry as usual revenue inflows were threatened with the no-contact regulations and shut-downs. An industry that was once a laggard when taking on new technological innovations has moved rather swiftly this time around after realising that blockchain technology has a lot of advantages to their existence.
Football clubs in particular, have embraced this new digital wave in order to meet supporters’ expectations world-wide, and to keep attracting sponsors. Fans are rooting for tokens, even the non-fungible ones (NFTs), and more ways to pay for games or online football news app subscriptions so that they can enjoy their matches harmoniously. England’s Southampton Football Club for example, signed a sponsorship deal that included being paid in bitcoin for certain performance-based bonuses.
In motor sport, Aston Martin Cognizant Formula One recently partnered with a cryptocurrency firm, Crypto.com so as to collaborate on fan engagement activations and to look for fresh opportunities for traders.
Future use-cases of cryptocurrency
The clinical associate professor of Finance at Arizona University, Geoffrey Smith, stated that he believes that cryptocurrency is only getting started and is here to stay. We believe him because the upcoming EURO 2020 games will have tickets you can buy using Ethereum. Moreover, investment banks like Goldman Sachs are encouraging their wealthy clients to buy Bitcoin so that they can rapidly increase the uptake of the virtual currency in their institutions. Now that’s a move that will surely get more people investing.
Social media giant Facebook is also launching their digital currency, Diem, this year, despite the many legal roadblocks they have encountered. With all the marketing efforts you see on Facebook, imagine the permeation this currency will get.
We can only but hope all the legal issues surrounding cryptocurrencies and the complex systems they use will be demystified so that everyone can trade with a clear conscience as the benefits are numerous.