The Case for Crypto in Popular Applications
Fanduel and Spotify
Introduction
Cryptocurrency has been a hot topic for years now, always in the sphere of conversation yet somehow still mysterious. This is because crypto is often criticized for lacking 'real consumer applications' or 'mass adoption' that appeals to the average Joe. Aside from treating it like a stock to buy and sell, you would be hard-pressed to find someone on the street who uses crypto on the daily. A solid integration into a well-known app that benefits its users who participate in it could be the bridge that connects the applications of crypto to those who don’t even know they need it.
The two mainstream apps I have chosen to demonstrate the potential capabilities of integrating crypto are Fanduel and Spotify: Sports betting and music. First, we’ll go over the four base factors that I believe make these two apps the prime candidates for making this process of integration go as smoothly and efficiently as possible. These factors are Popularity, Microtransactions, Education, and Collaboration. Then, there will be a section detailing some historical examples of uses they have already attempted. Finally, I’ll discuss some specific ideas these apps can use to implement strategies involving NFTs and other concepts involved with blockchain.
Four Factors
Popularity/Familiar Surroundings: Both applications have a well-established brand and system as well as a massive, dedicated user base. This means they have a stable, familiar interface that their users are comfortable with, making it easier to introduce updates or new concepts. It will be much easier to ease people into a new technology when there is an existing foundation they already trust. By springboarding off of a platform that has already built credibility, you can focus on the actual integration process instead of being hindered by justification and mistrust. Also, by having such a popular user base, you get access to a free audience that organically spreads information and trends so you can get real-time feedback and reviews. By making use of familiarity, you can negate the intimidation factor that often acts as an entry barrier.
Microtransactions: Microtransactions are another area that both apps are no strangers to, with sports betting and gaming bringing in millions of trades and Spotify being the number one used music app in the world. Generally speaking, the seamless transactions of blockchain technology would be an enormous boon to these apps, as examples such as the fast and low-cost transactions using Solana have proven. By endorsing and adopting cryptocurrency, these apps would enhance the public image of cryptocurrency to be more accepting and less skeptical. As the majority of apps now make use of microtransactions, seeing big-name apps go first could accelerate the overall adoption curve, finally bringing crypto into the mainstream.
Education: One of the biggest hindrances in the permeation of crypto to the general audience is its understanding. Most people just don’t get what crypto is, and as far as they care there is little reason to change that unless it’s a scheme to get rich quickly. By using these apps, you can employ their reputation and standing to distribute information from a trustworthy standpoint. Users will want to learn all about it if it’s related to the service they use every day, and these apps have an endless number of options to help them. From in-app guides and tutorials to short and long-form articles to podcasts or streams, there are numerous ways to provide solid and easy-to-access education to a wide audience. There is no better way to learn than by getting direct, hands-on experience as well by using these real-world apps. You can read all about a digital wallet but you’ll understand so much more by actually managing one.
Collaboration: Collaboration is indeed rather shameless in how it works, and yet when it succeeds it works so well that we can forgive it. From the Travis Scott meal in McDonalds to the Charli drink from Dunkin’ Donuts, it is clear that popularity spreads via proximity to the talent. And wouldn’t you know, the two apps chosen are filled to the brim with talent, as few icons are more popular than artists and athletes, not to mention streamers and podcasters? By utilizing such people with influence, you can do all sorts of things ranging from partnerships and campaigns to sponsorships and special events. But that isn’t all, you can also use the celebrity factor as a bridge to introduce experts in the crypto field to foster conversation and awareness for people who would normally never listen to such subjects.
Historical Uses
FanDuel
With sports betting, there was the time Fanduel offered the digital currency Dash as a tournament prize in 2018. The contest was called “Crypto Cup presented by Dash Digital Cash,” and would present a new way to play and run prizes. Neither Dash nor this scheme would end up causing any sort of new wave, but one year later Fanduel would be the first licensed sportsbook operator to allow users to pay with Bitcoin deposits via Bitpay. Also, there has been some success in the form of developing crypto integrated sports betting software, or betting platforms that utilize blockchain technology and allow instantaneous transfers via cryptocurrency.
One prime example of this is called AlphaSportsTech, and I believe their use of blockchain technology demonstrates the potential merits for collaboration of programs like these with a mainstream app. The website states its goal as “Introducing the Future of Sports Betting: Web3 Sports Betting Software Service.” When users submit their bet, a network of nodes that supports live game view validates the bet to ensure that the bet is fair and secure, even in offline service. while the blockchain records the bets ensuring all bets are secure and immutable as they are shared among other users. The distributed ledger serves as a public leaderboard record of all bets placed and the outcome of each bet. The software allows users to easily monitor their bets and track their progress so that once the event is over, the user’s winning rewards payments are sent directly to their wallet account. While there hasn’t been too much popularity for this type of platform so far, there are clear benefits that will hopefully lead to a more popular user base eventually. The main benefits can be summarized in the following:
Enhanced Protection: The decentralized nature of blockchain technology significantly reduces the likelihood of system infiltration by hackers, safeguarding user data effectively. This reassurance boosts users' confidence regarding the security of their personal and financial details.
Transparent Visibility: Every transaction conducted on the Web3 network is recorded and accessible in the public ledger, enabling users to effortlessly trace, oversee, and review their bets. This transparency promotes fair play and aids in deterring fraudulent activities.
Rapid Processing: Bets are processed nearly instantaneously, enabling users to swiftly make wagers and collect their earnings, bypassing the lengthy delays of days or weeks typical with conventional methods, as all transactions leverage cryptocurrency instead of personal details.
Direct Control: By removing intermediaries, users are granted complete autonomy over their finances and data, contrasting with centralized systems where third parties like banks must be consulted for any control over user information. This means lower transfer fees and general costs.
Global Access: With decentralization, the app breaks down geographical barriers, allowing individuals worldwide to engage in sports betting freely, without the constraints imposed by specific country or regional regulations.
Spotify
Spotify has always been the frontrunner for innovation in the music streaming industry, outshining the previously dominant streaming app Pandora by consistently exploring new ways to enhance user experience. They broke the barrier between listeners and artists by introducing fan interactions and popularity metrics as well as the barrier between listeners by introducing blending playlists between friends and shareable curated playlists created from algorithms based on listening history. Now, by introducing NFTs, they are tapping into the growing trend of blockchain technology, paving the way for a unique intersection of music and digital art.
The idea was that Spotify listeners could purchase or earn NFTs associated with specific artists, albums, or genres that allow users to gain access to exclusive playlists otherwise locked behind the NFT gate. Kingship, an artist, made one such playlist curated exclusively for those who had his NFT keycard. Unfortunately, this hasn’t gotten too much attention beyond a few short articles praising the innovative nature of Spotify. This is probably because Kingship is not well known enough to take on the extra burden of something also not well understood, NFTs. However, this model creates a new dynamic, cutting out the traditional management that usually handles all these decisions allowing for the artist to be truly free in their creative sessions. In this way, I think it is a promising first step to more successful ideals which brings us to the final part.
Specific Implementation Ideas
FanDuel
Points and Rewards: The app could create a system of earning points through active use and engagement to gain crypto tokens that gives access to certain privileges. For example, Exclusive Access and Experiences through NFT Ownership: Holding certain NFTs or tokens could grant fans free tickets to games, or exclusive seating. It could even include exclusive access to VIP experiences, such as meet-and-greets, behind-the-scenes tours, or special viewing areas at live events. To go even deeper, there could be specific games where those who go can gain a special NFT tied to that event. These NFTS could also be directly linked to physical sports memorabilia, such as signed jerseys or game-used equipment. The NFT not only acts as a proof of authenticity for the physical item but also as a digital collectible. And speaking of collectibles, this brings us to the second idea.
NFTs as Valued Collectibles: Fans could receive NFTs as digital collectibles for proof of participation in certain bets or achieving a milestone (e.g., winning a series of bets on major events). These NFTs could even be based on a player’s stats and performance at a given time, making their value and rarity fluctuate in real-time, adding an extra layer of excitement. This could be very popular, especially for fantasy sports as friends could trade and compare NFTs like cards.
Spotify
Listening metrics and Exclusivity: Spotify already uses metrics based on listening time to give users fun information blurbs that let them know how often they listened to an artist. For example, people who were in the top 1% of a certain artist got a special recording from them to those users. In that same manner, fans who have listened to an artist for a certain amount of time could be rewarded with NFT tokens as a sign of the artist’s appreciation and for bragging rights. They could also sell them, but we’ll go more into that when we discuss crowdfunding. These tokens contain a multitude of possibilities in ways they can be used to incentivize people to start using crypto technology. Some examples are:
Exclusive listening rooms are only accessible with a token given by the artist: These rooms let those who join listen or watch the artist while they are in the process of making work. They could also be used to give a preview or test the waters on some new projects, or even just to have a jam session with the artist and/or other fans (or could give access to fans on what’s on the artist’s playlist
Album art: This could be two options: First, a collaboration with visual artists and digital creators in the NFT industry would work to make limited collaboration album art. This would be highly competitive not only due to the exposure factor but also the creative potential. Second, an exclusive album art cover from the artist would be turned into an NFT so that only those with that token could access the album. It’s like a deluxe version where now only you and anyone w token will be able to see that cover art while listening to the album. Imagine if Kanye collaborated with a visual artist to release a limited edition NFT album cover to go with his new drop, how quickly would it sell out?
Crowdfunding: As mentioned earlier, NFTs offer artists unparalleled control over their work, allowing them to tokenize their music to engage directly with fans and gain funding through other means than usual. Through Blockchain technology, artists can bypass traditional gatekeepers and middlemen that extort both artists and any platforms trying to use their music. Artists could therefore crowdfund their work with NFTs by employing any of the strategies mentioned above. By doing so, they could receive a far more significant share of the revenue generated from their music, and fans could enjoy exclusive access to their favorite tracks and experiences without giving up their whole paycheck. It's a win-win scenario that emboldens the connection between creators and their audience, all while democratizing the music industry.
But it’s not just the artists who could benefit from this, it could also be a saving grace to Spotify itself. Artists could help Spotify by having more revenue to pay them as they are no longer gouged by record labels and other third parties. Despite being widely popular, Spotify has been digging itself out of a hole as licensing fees and royalties took a significant chunk of their revenue. The company has attempted to offset this by raising subscription prices, but that comes with the risk of angering users, something seen with streaming services like Netflix lately. Blockchain technology could be the solution to maintaining the delicate balance between profitability and running an inclusive platform that caters to a diverse audience of music enthusiasts.