Football is the perfect industry for cryptocurrency and NFTs to run rife, according to economist David McWilliams.
The term 'NFT' was essentially meaningless up until about a year ago, but it's something we're becoming more familiar with in recent months as it takes a foothold in the world of football.
Shorthand for Non-Fungible-Token - NFTs are essentially a piece of data, usually in the form of a digital image or song, which can be purchased with cryptocurrency.
More recently, the football world has become rife with cryptocurrency sponsorship and players selling their own NFTs. Even former Chelsea player John Terry has got in on the action.
But, while those involved in the unregulated market are vocal in their acclamation of the industry, economist David McWilliams says that people should be weary.
"Football sponsors are moving from gambling, online betting to crypto and NFTs, it doesn't surprise me because it's broadly the same neck of the woods." McWilliams told Off The Ball.
"My own sense is that a lot of people will lose a lot of money, because ultimately, all these cryptocurrencies are not backed by anything."
🗣️ "The greatest fool is the fan" @davidmcw explains why we're seeing a growth of NFT's and Crypto in football.
🗣️ "This has to be part of the opening chapter on when things go really, quite mad"
Football with @SkyIreland pic.twitter.com/YdDr9XeI4j— Off The Ball (@offtheball) January 18, 2022
"Now people will say that the dollar is only backed by a promise by the United States. But a promise by the United States is also backed by the revenues of the state, the tax, the credibility of the states, so that's a lot."
While cryptocurrencies have been on the market for a while now, NFT's have only made an impact over the last two years.
The growth of NFTs within football can be seen within the individual clubs - like Arsenal who have started selling club tokens - to individual players who are selling their own NFTs.
It has also come in the form of a Fantasy Football game called 'Sorare' which operates in a similar manner to the Premier League's fantasy football, except the players purchase and NFT of the player they want to select in their team.
And it's in NFTs where McWilliams sees the real danger.
"The prediction I will make is that NFTs will be the scene of some of the most outrageous cases of fraud the financial market has ever seen, and the financial markets have seen many."
"I would think that this is, in writing the great novel about speculation in the early 21st century, I think this has to be part of the opening chapter of when things go really quite mad."
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