In May of 2013, Sacramento wasn’t sure they would have a professional basketball team anymore, with a group out of Seattle set on bringing the Kings’ franchise to Seattle and reintroducing the SuperSonics. But now, the franchise is set to become the first professional sports franchise to use a peer-to-peer payment system and the digital currency, Bitcoin — which puts them at the forefront of technology in sports.
Shortly before the future of the Kings’ franchise went up-in-the-air, Bitcoin was making serious inroads on becoming a mainstream currency. Juliana Kenny, our tech editor, has covered the evolution of Bitcoin in depth over the past year. In an April 2013 piece, Kenny anticipated the future success of Bitcoin despite its massive fluctuation in value.
Both the tech and finance worlds lit up when virtual currency Bitcoin soared in value to over $200 per Bitcoin on April 9 2013, only to plummet to $105 by the 10th. Its volatile few days have sparked innumerable discussions on Bitcoin’s power to influence established economies, its movement from a geek-only entity to a mainstream interest, and its future as a viable currency.
Nine months later, Bitcoin has made its way into one of California’s professional basketball teams arenas; in that time it has nearly quadrupled in value. (As of the writing of this piece, one Bitcoin is equal to US$826.66.) “When I sold the NBA on keeping the team in Sacramento, my pitch included using the sports franchise as a social network to push the technology envelope,” said Kings majority owner Vivek Ranadive to ESPN. The future of the Kings’ arena is expected to be both ticketless and cashless.
The Kings will use a middleman company called Bitpay to control its customers Bicoin transactions. Bitpay takes a flat rate, not a percentage of sales, and this cost will be borne by the Kings — another incentive for them to keep Bitcoin ticket and vendor sales as high as possible, to push the leading-edge agenda Ranadive outlined, in other words. And while Bitcoin enjoys a lot of elite enthusiasm (and is slowly transitioning from fringe phenomenon to mere novelty), it’s still a risky involvement. Kenny noted in her April piece that due to the currency’s
volatile trading value, Bitcoin naysayers do well to emphasize the currency’s vulnerability to DDoS attacks (a vulnerability shared by other online services): part of the sudden decline in value can be attributed to a temporary outage at Mt. Gox. (The largest-volume Bitcoin exchange business.)
So if the Bitcoin stays stable, or stableish, and if its geek cred morphs into a more general street cred — big ifs! — the use of Bitcoin at the Kings’ arena may be a siren call for other professional sports franchises to adopt the digital currency. The Kings have essentially placed a big bet on the future of sports commerce. Here’s hoping their competitors and fans catch up.