NFT's - Can tokenised assets break new grounds in the event industry?
Could NFT's be a future addition for events and would people engage with them?
1st December 2020
Would you spend over $100,000 for a digital F1 car? It seems crazy that someone would spend that much money on something that only exists virtually, or are Non Fungible Tokens (NFTs) just misunderstood? Could a collectible asset class be something that is adopted more widely and be a type of merchandise for events?
For a company such as F1 to produce a blockchain-based game should not be something that is overlooked. F1 races are elite events with a huge fan base; 90,000+ spectators during race days, loyal fans dedicated to specific teams and a vast supply chain and sponsorship rights that businesses benefit from. Given this, it's no wonder why F1 are branching out to alternative revenue streams. F1 is a sport that can be easily adapted into the digital world, we have already seen this in the rise of their esport championship seasons and the celebrity races taken place during this year.
The up and coming driving talents of F1 themselves also enjoy racing off track as well as on it. Lando Norris and George Russell have showcased their virtual driving skills quite regularly and enjoy streaming their content, with Lando himself launching his own esports and content creation team:
Support and investment into this area from top sports stars like Lando only shows there is room to grow and opportunities to be made. That said, F1's blockchain-based game is separate from the esports championship but this doesn't mean elements wont be adopted into it in the future.
F1's blockchain-based game, named F1 Delta Time utilises cryptocurrencies to enable users to collect and trade unique cars, drivers and components. These come in the form of Non-Fungible Tokens or NFT's, representing something unique within the blockchain environment, such as collectible assets. They can then use these NFT's to equip themselves and take part in challenges to earn rewards (cryptocurrency prizes or NFT's).
The very first NFT for F1 Delta Time, a limited edition '1-1-1' virtual F1 Car sold back in 2019 for $111,000 at the time of purchase and at the time of writing this article now has a value of $250,000, given the rise in price of the Ethereum cryptocurrency it was purchased with. Being the first item obviously attracted interest from buyers and only recently the name of the buyer was disclosed. Cointelegraph's article provides more information about who purchased the car and their reasoning behind it:
Other NFT auctions for the game have also attracted high bids of around $50,000 for special edition releases, showing sustained demand an interest:
The esports industry certainly can create pathways to engage with NTF both from a competitor and spectator level. Creating exclusive prizes for tournament winners, but also having the potential to offer event exclusive assets to spectators to own and use whilst playing the computer games featured at the event from their home. With a 'value' to these assets, it can then give spectators who own items the ability to swap or sell them to other users should they no longer want them, providing a trading element to a virtual merchandise.
Events may also eventually take a similar approach to those being adopted by the computer game industry by creating virtual worlds whereby individuals can purchase land as an NFT to create their own unique environment. Imagine event organisers having a digital environment that is a store of value just like property and that has the same ability to charge people to enter it as well as selling items to use whilst in that world; it then becomes an interesting concept. Each event will be different to how they would be able to utilise NFTs, with some more than others but can offer up potential to many.
NFT's don't have to interact with video games or a digital environment, instead they can just be collectible items such as artwork, trading cards, souvenir trinkets or any unique items that can be thought of, but in a digitalised form. Each NFT would be unique by which any duplicate item (art prints/ trading cards etc) will still have an individual item number. The question would be whether there is interest from consumers in the event industry to own digital souvenirs. From a sustainability viewpoint it could help reduce manufacturing and use of non recyclable materials from producing souvenirs and where surplus post event can also be an issue. Rather than physical items making there way to the back of cupboards or end up in landfill; digitalised assets remain on the blockchain, are still accessible at any time but have no lasting impacts and could still be traded years later. Just like how we have moved from CD to digital music, its convenience may end up shaping future decisions.
NFT's do offer interesting concepts and opens the horizon for many new options and routes for events to explore. The increasing acceptance to digitalised ways in our daily lives may result in a shift trend for these to become more apparent at events in the future.