• The Law Gazette

Blockchain in Sports

Blockchain is a constantly growing ledger that keeps a permanent record of all transactions that have taken place to date, in a secure, chronological, and immutable way. In other words, blockchain is nothing but a chain of a block containing data representing anything of value, how they are chronologically connected in a chain that is secure, immutable, or unalterable and constantly growing.

Blockchain is sometimes also referred to as Distributed Ledger Technology (DLT), this technology makes the history of any digital asset unalterable and transparent because of decentralization of that asset which means there cannot be a single point of failure and also due to its cryptographic hashing technique.

For Instance, when we create a document in a Google Doc and share it with a group of people, the document is distributed instead of copied or transferred. This creates a decentralized distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications to the doc are being recorded in real-time, making changes completely transparent. The example is an easy way of understanding how blockchain technology operates.


There are three major components of blockchain technology that are mentioned below:

A) Blocks – The most integral element of the blockchain technology that is connected in series and each block further consists of three elements:

i. The data contained in it.

ii. A 32-bit whole number called a Nonce (Number used once). It is with the help of this randomly generated number called a nonce, which is done by the miners that help in the creation of a new block.

iii. The Hash function called SHA256 (Secure Hash Algorithm) is a one-way function wedded with the Nonce. It must start with a huge number of zeroes (i.e. be extremely small). SHA256 has developed the National Security Agency to keep the function as secure as possible.

B) MinersThey are the persons who create new blocks on the chains. This process is known as Mining. Their role is to process and confirm the transactions. But mining is a quite complex task as every block of the blockchain has its own unique nonce and hash function associated with it and also references the hash of the previous block in the chain that means if nonce of one of the previous blocks is invalid then all the subsequent blocks in the transaction would be invalid. Miners require special software and computer system to solve complex mathematical algorithms to find a nonce that generates and accepted hash. Since nonce is only 32 bits and hash 256 bits, there are roughly four billion possible nonce hash combinations before the ideal one is found. The ideal nonce found is known as “Golden Nonce”.

C) Nodes – They could be any sort of electronic device that are responsible for the maintenance of copies of the blockchain and keep the network functioning. Every node maintains its own copy of the blockchain, and the network must algorithmically approve any newly mined block for the chain to be updated, trusted, and verified. Here, the idea of decentralization in the blockchain technology pitches in as because no one computer of or any particular network of computers own the chain rather it is operated via the nodes connected through to the chain.


The sporting industries, corporations, football clubs and associations or be it any other sporting organization most of them were aware of the underlying potential of the blockchain technology even in the pre-pandemic Covid-19 era. But the Covid-19 pandemic has left an indelible mark of catastrophe over many sporting organizations especially the ones that are owned by the fans. For instance, Footballing Giants such as FC Barcelona, Real Madrid FC, and Atletico Madrid etc. have dealt with severe financial and economic crisis due to barricading of the methods that were crucial for revenue generation. The Covid-19 pandemic has compelled the sporting industry to devise new strategies to once again clear the pathway for the inflow of revenue.


The immense potential of the blockchain technology has slowly begun to revolutionize the sports industry. Some of the uses of blockchain are as follows:

a). Facilitate mass coordination through decentralization among stakeholders

b). Cost reduction by not involving third parties

c). Builds trust factor among the stakeholders

d). Transparency and data security

e). Enhancing fan interaction and experiences by incentivizing engagement

f). Generating new revenue models through tokenized teams and enhanced loyalty programs

g). New market creation for sports betting and collectibles trading

h). Enabling athletes to crowd fund their performance using income share agreements or loyalty rewards.


From providing useful insights and actionable data to their respective organizations and teams to facilitating cross partner loyalty programs to incentivize fan engagement to minimize the risk of counterfeiting and sale of memorabilia and collectibles, the blockchain technology has laid its foundation in the world of E-sports (Electronic Sports) and has made it possible to establish a market for a new wave of sports collectibles and in-game items with the help of Non-Fungible Tokens (NFTs). This superior technology has helped organizations to crowdfund training facilities in exchange for a portion of future revenues or shares in the team, club or organization.

Following are the use cases of the blockchain in traditional sports as well as the e-sports industry, benefitting clubs, fans as well as the players.

1). Cryptocurrency advertising – the upcoming crypto projects have started to advertise their services on football pitch side sponsorship boards. One of the most recent instances is when a crypto company known as “Coindeal” signed a partnership with the English Premier League team Wolverhampton Wanderers FC in the month of February, 2020. The Sponsorship agreement included the logo of “Coindeal” on their kits as well as a promotional video from the partners on YouTube. Within a few weeks span the number of views on the video crossed a 4,00,000 mark. Another instance is when “Zumbo”, a crypto payments firm became a pitch side sponsor in the Scotland vs Serbia football match during the Euro Qualifiers 2020.

2). Ticketing – usage of digital tickets through blockchain reduces the risk of ticketing fraud, increases security towards data breaches and efficiency in handling high demands and also guarantees privacy. Also, it limits access to scalpers and bots attempting to secure many tickets for the purpose of reselling.

3). Doping and Management Regulation – introduction of blockchain has clearly increased transparency and liability within and among organizations. An athlete’s personal data stored in a blockchain is immutable or unalterable and highly secure from being leaked. Additionally, it is publicly transparent about any medical tests conducted on an athlete.

4). Player Analytics – Information pertaining to health or medical data, previous club transfers, fees Management, fees payment, Clearance of dues, performance tracking can easily be shared and transferred without any fear of data leak or breach from any external agency.

5). Player’s Rights – Contracts as we know include ample essential details in relation to the parties involved in it. Most importantly in a contract concerning an athlete or any sportsperson, the rights of the athlete are mandatory to be mentioned in the contract. The traditional methods of contracts were susceptible to alterations and not highly secure. But the introduction of smart contracts has made contracts highly secure and immutable. Hence it increases transparency between the contracting parties and also builds a trust factor between them.

6). Fan Identity – With the absence of intermediaries the fans and sports organizations get even closer to each other. Public data provided by fans on the blockchain can be used by sporting organizations directly allowing them to offer personalized and customized content to each fan individually. “Superfans” could receive a verified profile or Non-Fungible Token (NFT) representing their fan status.

7). Player and Club participation – The popular ‘Chiliz’($CHZ) project allows fans to purchase the tokens for their favourite football teams. A revolutionary concept that enables fans to cast their vote in matters concerning kit designs and training ground names etc.


Though the uses of blockchain technology are enormous and countless, a certain fact that needs to be considered are the risks that are associated with this modern technology. Absolute transparency in blockchain technology is sometimes a bane since any personal information put up by the user on his account remains there irrespective of that technology is patented or not. Another concern for sporting organizations is the uncertainties of the legal and regulatory framework of blockchain technology. Perhaps it can be said that there are some negative aspects associated with blockchain but the overall advantages attached with it surely outnumber its drawbacks.











This blog has been authored by Amogh Srinivas Rao, who is a 5th Year B.A., LL.B. (Hons.) student at GD Goenka University , Sohna, Haryana.