Money has been at the heart of Motorsports since their inception, but there is a growing and disruptive technology that could change the game forever.
The term “cryptocurrency” is something that still elicits confusion in many people. Yet, the potential ramifications of the rising tide of cryptographic digital currencies could envelope the daily lives of millions of people – including the way that many international sports operate.
For the uninitiated, a cryptocurrency is simply a digital asset that has real-world value associated with it. One can think of it as a digital “token” that two parties can use to exchange for goods and services in the same way that traditional tender is used. The boldness of these new digital assets – of which the now-fabled Bitcoin pioneered the way forward – lies in their ability to be distributed the world over through no centralized system like that of traditional banks. Instead, the users on the network provide the necessary legwork of documenting and verifying every transaction on what is called the “blockchain”. This revolutionary technology allows the entire cryptocurrency ledger to operate less like a brick and mortar institution, and more like the Internet. If one node goes down, that’s fine – another will step in to fill the spot, and business goes on as usual.
The true power behind the blockchain technology is that it, in effect, can allow users to crowdfund together and back any sort of product, service, or company that would accept said crypto tokens as a form of investment – allowing fans of sports to directly fund teams and have more say in the comings and goings of their teams. If this seems too far-flung, take a moment to consider what happened when NASCAR fielded a “Dogecoin” sponsored car. The main sponsor, “Dogecoin” was nothing more than a culmination of users who banded together in an effort to field Josh Wise’s No. 98 car. Field it they did, and the ever-slightly-smiling face of the Dogecoin Shiba Inu went on to become one of the most non-traditional sponsors to feature on the hood of a NASCAR stock car.
Although the realm of cryptocurrency is still evolving, it has made incredibly strides over the last several years alone. The tech has proven that it has the necessary foundation to truly democratize the distribution of funds and obliterate the need for a central entity. Should we continue to see a growing adoption rate of cryptocurrencies, we could potentially be standing on the precipice of one of the most exciting periods of Motorsports history.
Imagine if the issue of money in Formula One could be sorted via a crowdfunding solution – the funding discrepancies could vanish overnight. Instead of hunting and trying to bag an investor for themselves, a team could opt to offer perks/rewards/bonuses to those fans who open up their digital wallets. That example is only the tip of the iceberg. Crowd-funded teams could be a very interesting dynamic that emerges over the next few years, and even gives traditional, well-established teams a run for their money.