Pirelli, the Italian tire manufacturer, has just lost its sponsorship of the famous Nerazzurri jersey (black and blue) from Inter Milan football club after 26 years. New sponsor Socios paid almost twice for Pirelli’s offer. What does Socios do? It is a cryptocurrency company.
Inter Milan will launch their own branded digital currency $ Inter. Holders of Inter $ coins, primarily Inter Milan fans, will be able to use the tokens to purchase exclusive merchandise and digital content, and also to participate in club-led votes. These polls may include, for example, the selection of input music for walking the field; what message the captain wears on his armband, and even guide the selection of the team.
But don’t cryptocurrencies built on blockchains have a damaging carbon footprint? The annual energy consumption to implement bitcoin is now equivalent to that of Sweden (135TWh). A single bitcoin transaction consumes as much energy as a typical US household over 57 days. The reason for such astronomically high power consumption is the complexity of the algorithm that establishes trust through an open federation of computers used to “mine” the cryptocurrency, the owners of which can be anyone. anywhere.
Some blockchain advocates argue that renewable energy production will solve the problem in due course. Nevertheless, the architects of the popular cryptocurrency ethereum intend to drastically reduce energy consumption, moving from verifying the work done by “miners” to verifying the stake of coin holders. This transition, with the resulting reduction in energy consumption, is expected in the coming months. Additionally, branded tokens such as Inter Milan’s $ Inter approaches use approaches that reduce the frequency of energy-intensive interactions with the underlying blockchain.
It’s not just Inter Milan. Arsenal, Atlético Madrid, Juventus, Manchester City and Paris Saint-Germain are already launching digital tokens similar to the club’s brand in partnership with Socios. The same goes for the Formula 1 teams Aston Martin and Alfa Romeo Racing. In the United States, two NBA teams, the Philadelphia 76ers and the Boston Celtics, have signed up with the NHL team, the New Jersey Devils.
A deeper commitment
With the impact of the pandemic on live sports and closed stadiums and venues, it may not be surprising that leading sports brands are looking to innovate. Digital currency looks interesting. A club can immediately identify who its current best and most loyal fans are, by the amount and duration of its branded coins held by individuals. Deeper engagement with these fans becomes possible, such as dating events, collectibles sales and online competitions. Branded coins can be given as rewards and prizes.
If the amount of branded coins minted is capped, the value of the coins themselves is expected to rise (against the euro or the US dollar) over time. As more fans join, more fan engagement events are held, and more VIP-only content and merchandise is sold (and paid for in the digital currency of the club), the demand for club parts will inevitably increase.
After all, take a look at bitcoin: While its value has fallen recently, the bitcoin-to-euro exchange rate has risen from € 8,500 a year ago to (at the time of writing) almost € 32,800 today. Likewise, the value of an Ethereum coin has increased from € 266 to € 2,000 in the past 12 months.
Cryptocurrency for elite sports brands becomes even more attractive if not only can fans buy and be rewarded with branded digital tokens, but are also allowed to exchange for a ‘fiat’ currency, such as the euro. or the dollar. They can then economically share the popularity of a club, beyond the merchandising and events organized by the club itself. You could earn income as a fan.
But would there necessarily be a buyer, and if so at what price? An important development in cryptocurrency technology has been automated counterparties. In practice, this means that there is always a buyer if you want to sell, or a seller if you want to buy. The exchange rate is predetermined (and published) based on aggregate demand. This is because the cryptocurrency itself stores value (rather than being held by a human being).
Of course, why limit the approach to only sports brands? Musicians and bands, and in general anyone creating digital content (yes, even journalists and writers) can now create their own branded currency. Group winner of a Grammy Portugal. The Man, Japanese football star Keisuke Honda, rapper Lil Yachty, actor Terry Crews, musician Harrison First and Instagram personality Laurel Driskill are among the hundreds of artists, stars and influencers who have each launched their own branded digital currency. If you want to speak directly to one of them, or if you want them to “scream” to advertise or get their advice, you need to purchase branded tokens first.
Social economies, implemented in digital “social tokens” allowing individuals and brands to share value directly with their fans, are an emerging wave on the internet. They threaten to disrupt established internet advertising and monetization strategies, especially for today’s major internet players, as content creators can financially link ‘over the top’ directly with their followers, regardless of digital platform or platform. the underlying social network.
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