Cryptocurrency in Esports: Betting, Prizes, and Player Payments

Esports are booming in popularity at the moment, and they are already outgrowing other real-world sports in popularity. And what comes after a sport becomes popular no matter if we talk about virtual sports? That’s right, betting.

There is no doubt that eSports has grown into a multi-billion-dollar industry, and this is just the start. We expect eSports to become even more popular in the future. But since we talk about a tech-oriented sport focused on gaming, how do other technological innovations affect the growth of eSports?

Well, there are a lot of technologies that affect eSports, such as advancements in computer processing power, video streaming, the internet, and of course cryptocurrencies. We’ve already seen some big moves where eSports teams are endorsing certain cryptocurrencies, but does this mean anything?

I think that we are talking about an industry that is one of the first ones to adapt to modern digital payments such as cryptocurrencies. This is the perfect industry where cryptocurrencies can be introduced in many different ways. We have betting, tournament prizes, payments, NFTs, and many other ways.

So, let’s see how crypto is going to reshape the eSports industry.

Betting with Crypto: What’s The Deal?

One of the biggest aspects of eSports and any other sport on the planet is betting. I think it is safe to say that traditional sports wouldn’t be the same if we couldn’t place a bet on them. With eSports, betting isn’t as popular as traditional sports. Which tells you that it will only grow in the future.

But eSports betting can take a slightly different direction, and infuse the betting side of things with digitalization. How? Well, we have the use of cryptocurrencies, which actually makes sense.

Nowadays, there are plenty of sports betting websites that allow crypto betting on traditional sports and a few that allow crypto bets on eSports. The idea is actually quite simple. People have faster payments, the entire process is more transparent due to blockchain technology, and we as bettors have lower fees.

Something that everyone would love. The only downside is that cryptocurrencies are still very volatile, which means that you can lose your profits if the markets tank.

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Crypto betting platforms are also pushing boundaries by offering new and innovative ways to wager, like micro-betting on in-game events (think “first blood” in a game of “League of Legends”). But, remember, the volatility of cryptocurrencies means that your winnings could skyrocket or plummet before you even cash them out. Talk about a roller-coaster ride!

Prizes and Payouts

Moving beyond betting, cryptocurrencies are increasingly being used as prize money in esports tournaments. For instance, esports organizations and tournament organizers are starting to pay out in cryptocurrencies like Bitcoin or Ethereum instead of traditional fiat money. Why? Well, crypto is less hassle for international transactions and minimizes currency conversion costs.

A great example here is the BLAST Premier series, which has experimented with crypto payouts. Maybe it is because of their big partnership with Coinbase.

For players, getting paid in crypto can be a double-edged sword. If you’re smart (or lucky), you could hold onto that prize money and watch it grow as the value of your chosen coin rises. But, let’s be honest — it’s just as easy for the value to tank overnight!

What About Taxes?

Yeah, I know, nobody likes to talk taxes, but crypto is still subject to tax laws in many countries. So, if a player gets paid in Bitcoin, they still need to report that income and pay up. Just something to keep in mind if you were thinking that crypto is a tax-free loophole.

Player Payments:

Beyond the realm of prize money, there’s also an uptick in esports organizations experimenting with crypto as a way to pay salaries to players.

The idea is simple: since esports is a global phenomenon, it’s often easier and cheaper to handle payments in cryptocurrency rather than traditional bank transfers. This can especially be true when dealing with players or organizations from countries with less stable currencies.

Example Time: Teams like OG Esports have toyed with crypto payments, making it easier to compensate players scattered across different countries. Moreover, many crypto-savvy players prefer receiving payments in digital currencies for the potential of gains if they decide to HODL (Hold On for Dear Life)​.

However, not all players are keen on the idea. Cryptocurrencies’ value fluctuations can be a headache. Imagine waking up to find your salary has lost 20% of its value overnight! Organizations need to weigh these risks and rewards carefully.

NFTs

Now, let’s talk about a trend you might not have seen coming — NFTs, or non-fungible tokens. If you’re thinking of those weird monkey pictures people sell for millions, you are kind of on the right track. In esports, NFTs have taken off as collectible digital assets — think trading cards, but with a whole lot more glitter.

NFTs in esports are used for everything from player cards to special in-game items, and fans are buying them up like hotcakes. And here’s a fun fact: some teams, like OG Esports, have even launched their own NFT collections, allowing fans to own a piece of the team’s history​.

But NFTs aren’t just collectibles; they can also have utility within games. In some blockchain-based esports games, you need an NFT just to play, and the more valuable the NFT, the better your chances of winning and earning crypto in return.