scorecardresearch
Follow Us:
Friday, June 25, 2021

A crypto variation: Bitcoin as prize money in sports

Bitcoin springs up as winners’ prize with chess, football entering crypto space, finds SANDIP G

Written by Sandip G |
Updated: May 23, 2021 8:09:23 am
The world's best chess players, led by world champion Magnus Carlsen, are in line for a massive bitcoin bonus if they can win next week's FTX Crypto Cup. (File Photo)

In days to come, the world’s best chess players, led by world champion Magnus Carlsen, are expected to closely follow the highly volatile cryptocurrency market. Understandably so since the winner of next week’s FTX Crypto Cup, the $320,000 prize money richest-ever online chess tournament that will see the Top 10 ranked players take on each other, has been promised a massive bitcoin bonus.

This unprecedented windfall notwithstanding, the ever-fluctuating bitcoin value that was $100,000 on May 17 when the tournament was announced but subsequently saw a 30 per cent slump has added a shade of intrigue and uncertainty about real prize money up for grabs.

The largely insular sporting world has been warming up to the decentralised digital currency. Over the last few years, bitcoins have found mention in contracts of English League footballers and NBA stars. Cricketers too are moving with time. Former Australian cricketer Brett Lee donated one bitcoin (approximately Rs 40 lakh at the time) for COVID charity in India. This came about around the same time, ICC made the revelation that former Zimbabwean cricketer Heath Streak had confessed to accepting a bitcoin payment from a bookie.

Andreas Thome, CEO of the Play Magnus Group, calls the Crypto Cup a path-breaking event: “We, along with many chess players around the world, have been following cryptocurrencies for many years and are passionate about celebrating this fast-growing industry,” he says on the tournament website.

The chief executive of FTX, the cryptocurrency exchange and tournament sponsor, Sam Bankman-Fried spoke to Reuters about the connection chess has with the digital currency. “In a number of ways you know the chess demographic overlaps a fair bit with the cryptocurrency demographic in terms of people who tend to be technologically sophisticated, younger and quantitative, and so I think you know while crypto’s appeal is definitely broadening quite a bit, you know that it still does remain the demographic that is most amenable to it,” he said. Dutch Grandmaster Anish Giri told chess.com: “It’s like playing with the house money right? You’re getting it for pretty much nothing, it’s also a bonus added to the prize fund. It’s a good thing, it’s here to stay. I don’t have an account, but I’m planning to get one soon.”

Another interesting facet of the tournament is the live display of the fluctuating bitcoin value on the tournament website, giving the players and the fans an idea about the constantly changing bonus for the winner.

When the tournament was announced on May 17, the organisers had purchased 2.1825 bitcoin worth $100,000 at $45,000. But two days later, the market crashed after Chinese regulators banned banks and payment firms from using cryptocurrencies.

It plunged by nearly 30 per cent to almost $30,000, though in three days’ times it resuscitated to around $40,000. But what really counts would be its value on May 31, the last day of the tournament. They could end up bagging prize money less than the projected $100,000; they could pocket more than the sum too, depending on the market rate on that particular day, or that specific moment. Before the crash, the bitcoin value had peaked to around $64,000 per unit in April this year, a 450 per cent leap in six months.

Kasparov an advocate

Among the prominent advocates of cryptocurrency is former world champion Garry Kasparov. “Anything that can offer us the opportunity to take back control or some control of our privacy is always welcome. It’s a response to the shift of power from individuals to states or other institutions that may act on our privacy without our consent,” he had told The Forbes two months ago. But he added a disclaimer: “As with any new technology, it’s not inherently good or bad. It depends on who’s using it and for what purpose. You can use nuclear technology to build a bomb or a reactor.”

A day after the announcement, Chess.com launched its crypto-related chess event – CryptoChamps Chess, a tournament featuring largely amateur stars. These developments are a further sign of sports gradually embracing Bitcoins, the world’s most popular digital currency. It’s not cryptocurrency platform FTX’s first foray into sport either: It coughed up $135 million to secure the naming rights to the home arena of the NBA’s Miami Heat.

Elsewhere too, the bitcoins are gaining in currency in the realm of sports. English Premier League side Southampton had made it public that there is an “option for the club to be paid certain performance-based bonuses in Bitcoin at the end of each season, allowing the club the opportunity to take advantage of the new, high-growth currency if it feels it will bring significant future benefits”. So has been NBA franchise Sacramento Kings, paying a part of the players’ salary in bitcoin since 2014, a measure its chairman Vivek Ranadivé said was intended to use the “sports franchise as a social network to push the technology envelope.”

Southampton’s sponsors sportsbet.io trades in cryptocurrency. There is also a bitcoin logo on the sleeves of championship team Watford, another team the betting firm sponsors. Watford also became one of the first football clubs in the world to accept digital currency. In Spain, last January, former Real Madrid graduate and Levante striker David Barral became the first player to be purchased using solely cryptocurrency, when Segunda B side DUX Internacional de Madrid acquired his signature for an undisclosed sum. Three years ago, Gibraltar United FC had announced that they’ll be paying their players using crypto.

With transfer amounts skyrocketing by the day, in a not-so-distant future, Bitcoin transactions will become more popular. Iqbal V. Gandham, UK managing director at eToro, a cryptocurrency platform that has ties with several EPL clubs, told The Sun in January that “within about six to twelve months we will see a player transfer in the Premier League completed using bitcoin.” It could help clubs avoid issues around the third-party ownership of players, which happens in a lot of high-profile transfers.

Though it’s unforeseeable next season, football authorities are not entirely averse to the idea. There is more acceptance in FIFA and UEFA as well, with payment for tickets for some matches in the 2018 World Cup accepted through cryptocurrency. FIFA had then said that it sees the mode as safe and transparent without the worry of black marketing.

FTX Crypto Cup: May 23 to May 31.

Participants (From seed 1 to 16): Magnus Carlsen, Maxime Vachier-Lagrave, Liren Ding, Hikaru Nakamura, Alexander Grischuk, Ian Nepomniachtchi, Levon Aronian, Fabiano Caruana, Daniil Dubov, Shakhriyar Mamedyarov, Teimour Radjabov, Peter Svidler, Wesley So, Anish Giri, Alireza Firouzja, Alan Pichot.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Sports News, download Indian Express App.

  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
Advertisement
Advertisement
Advertisement
Advertisement