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10 Ways Blockchain Will Revolutionize The eSports Industry

Want to know 10 ways that blockchain will revolutionize the eSports industry? 

That’s a great question that we will answer here.

According to Verified Market Research, “Esports Market was valued at USD 915.30 million in 2018 and is expected to reach a value of USD 2,976.74 million by 2026 at a CAGR of 18.35%”.

Besides the huge sums of money to be made, innovating in this industry is the chance to make a positive impact on all our lives. Here’re a few amazing case studies of companies who hired DevTeam.Space to build their eSports software products:

  1. eTournament Management Application – eGaming Management Web Application
  2. CSGO Team Management Project – Web-based Management Program
  3. eSports Tournament Project – Web Application For Tournaments


What are eSports?
Most popular eSports
How large is eSports global market?
What challenges does the eSports industry face?
A brief overview of blockchain
How can blockchain revolutionize eSports?
Planning a promising blockchain project in the eSports space?

What are eSports?

eSports, or “electronic sports” are organized competitive gaming events. The following quick facts are worth noting:

  • These are video games played on various electronic devices like computers, tablets, smartphones, etc.
  • These are multi-player games, organized in various leagues and tournaments.
  • Players can compete individually, moreover, some eSports also features competing teams.
  • eSports are fiercely competitive! Players can win huge prizes, with the prize money for the biggest events running into millions of dollars.
  • In addition to the massive prize money, players also compete for the prestige that accompanies winning top championships.
  • The soaring popularity of eSports also brings sponsorship, endorsements, and team salaries.

Read more about eSports in “What is eSports and why is it big deal?”.

Most popular eSports

Market observers analyzing the eSports market often rank eSports by the prize pool. Going by that yardstick, the most popular eSports are as follows:

  • “Defence of the Ancients 2 (Dota 2)”
  • “Counter-strike: Global offensive”;
  • “League of legends”;
  • “Heroes of the storm”;
  • “Call of duty: Infinite warfare”.

Read “Top 5 largest eSports games & their prize pools” for a detailed analysis of these eSports.

How large is eSports global market?

eSports is a relatively new industry, however, it’s growing rapidly. Consider the following statistics:

  • The global market for eSports was valued at $865 million in 2018. At 22.3% CAGR, this market will likely be worth $1.79 billion in 2022. Read this Statista report for more information.
  • In 2018, there were 173 million frequent and 222 million occasional eSports viewers. In 2022, these numbers will likely reach 297 million and 347 million, respectively. This Statista report provides more insight into this.
  • North America will generate 37% of the global eSports revenue in 2019. China will be the second-most prominent region with 19% of the global revenue. Read “Share of worldwide eSports market revenue in 2019, by region” for more details.


What challenges does the eSports industry face?

A new industry typically navigates quite a few challenges, and that’s true with eSports too. The industry faces the following challenges:

  • Players get only a small percentage of the total industry revenue.
  • Gamers and brands don’t have a legitimate, self-sufficient ecosystem.
  • Fans and followers have no easy way to know who the players are unless they follow them on platforms like Twitch or YouTube. Read “The undeniable truth of blockchain technology in eSports” for more details.
  • There isn’t a transparent system to provide fare rewards to service providers.
  • Investment in eSports is hard without a uniform portal facilitating secure participation in eSports. An emerging blockchain-based eSports platform named “eByte eSports Blockchain” has explained this challenge succinctly here.
  • The industry needs more content to reach a critical mass. Broadcasters and leagues need to step in and produce content in an appropriate scale.
  • Content producers need robust technology solutions to effectively monetize their content.
  • Consumers often don’t like ads, and many of them use ad-blockers. That’s a challenge for eSports marketers. Read more about this in “eSports offers major opportunities, but challenges remain”.


A brief overview of blockchain

Before we delve into how blockchain can revolutionize eSports, we would do well to understand how the technology works. The following points are worth noting here:

  • Blockchain emerged a decade ago as the foundation of the famous cryptocurrency Bitcoin.
  • It’s a decentralized “Peer-to-Peer” (P2P) network where each node, i.e., a computer on the network, has the entire information on the blockchain.
  • Since each node holds the entire blockchain database, it’s a distributed database with in-built redundancy.
  • Every node is a ledger of all transactions on the blockchain, therefore, we also call it the “Distributed Ledger Technology” (DLT).
  • No hacker can shut this network down by attacking one computer since other nodes will still keep the network up and running.
  • Public blockchains like Bitcoin are open to anyone, and each node can interact with the other nodes in a disintermediated manner.
  • Digital signatures based on modern data encryption technology, cryptographic hash functions, and rigorous consensus algorithms protect the data in the network.
  • Armed with these features, blockchain offers decentralization, tamper-proof records, and transparency.
  • Later generations of blockchain networks, e.g., Ethereum, have introduced smart contracts. These are tamper-proof, autonomous, open-source pieces of code that transfer cryptographic assets when predetermined conditions are fulfilled. Their execution is irreversible.

I have explained the characteristics of blockchain in “How to build your own blockchain using Node.js” should you wish to read more.

How can blockchain revolutionize eSports?

Now that we have a better appreciation of the challenges to the eSports industry, and what blockchain is, let’s review how blockchain can transform eSports.

Blockchain can revolutionize eSports as follows:

1. A decentralized platform for eSports

eSports involves quite a few stakeholders, e.g., players, game developers, sponsors, media, advertisers, team managers, etc. They need a comprehensive platform. Blockchain can help here, as follows:

  • A blockchain-powered platform can bring these stakeholders under one roof.
  • The decentralized platform can help the industry stakeholders to connect.
  • Amateurs in this space can take advantage of this platform and become professionals.
  • Stakeholders use the platform to manage the distribution of prize money, transfer of players, media rights, sponsorship, advertising, and several other aspects.

Read “How blockchain is bringing in the new era of eSports” for more insights into this aspect. DreamTeam and Enjin are examples of such emerging blockchain-based eSports platforms.

2. Improve the trust factor in eSports

Let’s face it. You will not devote your time, energy and resources to an endeavor you don’t feel you can trust. Many potential eSports players have the same feeling. The trust factor needs improvement, and blockchain can help here, as follows:

  • The transparency of blockchain enables everyone to see what’s happening on the network. Casual eSports players can feel confident.
  • Game developers run a risk of not being paid for their development efforts. With blockchain, they can secure their work and not let anyone use it in an unauthorized manner.
  • Smart contracts can act as agreements between game developers and organizers of tournaments. This will ensure that organizers first pay the game developers before using the game.
  • The transparency of smart contracts can eliminate the concerns around the unfair distribution of the prize money.

There are other areas in the eSports landscape where blockchain can improve the trust, but I’m sure you already get the point. Read “How blockchain technology can improve eSports” for more insights.

3. Leveling the playing field

eSports is turning out to be a big business. Deep pockets increasingly matter here, as amateurs find it harder to participate in major tournaments. Blockchain can level the playing field, as follows:

  • Blockchain lowers the cost of maintaining and operating a secure database. The technology uses a P2P network as its’ foundation and builds in redundancy within the distributed database.
  • Developers are increasingly finding it easier to develop a blockchain-based “Decentralized App” (DApp) with blockchain platforms like Ethereum, NEO, EOS, and Lisk. Read more about these platforms in “What to plan for when undertaking blockchain software development?”.

These factors combine to lower the entry barrier for the new entrants.

4. Cryptocurrency-based secure payment

eSports industry is striving to counter fraudulent practices. Illegal gambling, match-fixing, etc. are common occurrences, and these are rightly attracting media coverage. Stakeholders worry about getting paid for their services. Blockchain can improve this situation, as follows:

  • Cryptocurrencies, which are built on the blockchain technology, are gaining in popularity.
  • Crypto transactions are outside the control of governments and banks.
  • Blockchain consensus algorithms ensure that cryptocurrency transactions are immutable. For eSports stakeholders, this means that they will receive payments and the transaction won’t bounce.
  • Blockchain DApps use smart contracts, and these automatically transfer cryptocurrencies upon fulfillment of predefined conditions. Read about smart contracts in “How to deploy smart contract on Ethereum?”. This is important for eSports stakeholders since their payment is assured.
  • Secure hardware wallets like Ledger Nano S help crypto users to secure their digital currencies.

5. Secure in-app purchases

We now have a growing number of eSports sites, eSports apps for mobile, and eSports web apps. Consequently, in-app purchases are also growing. Consumers need secure in-app purchases, and blockchain can facilitate these in the following manner:

  • DApps using secure blockchain networks, digital signatures can assure consumers about their purchases.
  • Crypto-based payment can expedite the transactions.

I have examined this topic further in my article “How to create a secure in eSports app purchase / payment system using blockchain”.

6. Greater autonomy for players

Match-fixing is a challenge in the eSports space. Managers pressurize players to lose games on purpose. It costs vast sums of money to set up tournaments, therefore, players have a high dependency on organizers and managers. Blockchain can give greater control to players, as follows:

  • It reduces the cost of running an eSports platform.
  • This, in turn, reduces the cost of organizing tournaments and marketing them.
  • Tournament organizers need to remain above board since blockchain transactions are transparent.
  • Agreements are open to all for viewing as smart contracts are open-source codes.

Transparency always helps the marginalized stakeholders, therefore, players have better control thanks to blockchain. Read more about this in “4 ways blockchain is going to revolutionize eSports”.

7. Streamlining the donations in eSports

Blockchain can streamline the process of accepting donations in eSports. Donations in eSports work as follows:

  • eSports viewers donate money as they want their favorite games to flourish.
  • Platforms like Twitch or YouTube enable this donation.
  • Viewers donate to their favorite gamers.
  • However, there is a process called “Chargeback”. A viewer can request the entire money back, and they often do so stating that the donation was without their knowledge.
  • When a chargeback request is approved, the player needs to return the entire money.
  • This puts the players in a disadvantageous position.

With blockchain and cryptocurrency-based payment, transparency improves. Chargeback claims with questionable justifications won’t work. This makes eSports more financially rewarding for players. Read more about this in “How blockchain is taking eSports to the next level”.

8. New loyalty/incentive models

Marketers of eSports are introducing new loyalty/incentive models with the help of blockchain. This works as follows:

  • Viewers of eSports receive rewards for their participation.
  • They sign-up to an eSports broadcast service.
  • Viewers either run a browser plug-in or watch the tournament using a particular website.
  • They earn loyalty points using cryptocurrencies.
  • Unlike traditional loyalty points, viewers can exchange cryptocurrencies for fiat currencies in crypto exchanges that trade in them.
  • Alternatively, they can trade these for other cryptocurrencies.
  • They can also hold on to these coins expecting a future appreciation in their value.

Read “Blockchain decrypted: explaining the technology’s impact on eSports” for more insights.

9. Facilitate the creation and trading of rarer in-game assets

Blockchain can help eSports content producers to create rarer in-game assets, and enable their trading. This can work as follows:

  • In-game assets with the same valuation as other in-game assets can have their corresponding crypto tokens.
  • At a given point in time, all such assets will have the same value.
  • If you are developing an Ethereum-based eSports platform then you can use the ERC20 token standard for these assets.
  • A blockchain-based platform can facilitate the trading of these tokenized in-game assets. Buyers of these assets can also trade them in crypto exchanges.
  • You can also create unique and rare in-game assets. Here, each in-game asset will have unique characteristics, therefore, the value will be different from other in-game assets.
  • To represent these unique assets using crypto tokens, one should use “Non-Fungible Tokens” (NFTs).
  • On the Ethereum platform, you need to use the ERC721 token standard for these.

Read “Noobs guide to understanding ERC-20 vs ERC-721 tokens” for detailed guidance on this.

10. Easier crowdfunding

Talented eSports developers need sufficient funding to take their promising eSports projects forward. However, as I have already explained, new entrants find it hard to enter the eSports space. This impacts their funding prospects.

Blockchain has a significant potential to transform crowdfunding by making it faster and transparent. Read “Blockchain for crowdfunding: 8 possible use cases” to know more about this. Promising eSports developers can take advantage of this, and raise the funds they require.

Planning a promising blockchain project in the eSports space?

Blockchain indeed has the potential to transform eSports. However, it’s a new technology, and blockchain development skills are niche. The lead time to hire a blockchain developer can be high. Depending on your project requirements, you might need professional help. Read “How to find the best software development company?” before you engage a development partner.

DevTeam.Space is a vetted community of expert dev teams supported by an AI-powered agile process.

Companies like Samsung, Airbus, NEC, and startups rely on us to build great online products. We can help you too, by helping you to hire and effortlessly manage expert developers.

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