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Dangerous game? Football clubs look to mine fans’ cash with crypto offerings | Cryptocurrencies

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When FC Barcelona took to the pitch for the 2021 Spanish Super Cup final, the trophy wasn’t the only prize at stake.

Thousands of blaugrana fans were also keeping an eye on the market for FCB’s “fan token”, the club’s very own cryptocurrency. Socios, the web-based platform that pioneered fan tokens, had promised to “burn” 20,000 tokens for every goal Barcelona scored – and 40,000 if they lifted the cup.

In theory, success on the pitch would increase the scarcity of the currency, boosting its value. In practice, Barcelona lost the game and, footballing passions aside, it didn’t make much difference anyway. With 3.5m of the tokens in circulation, not to mention millions more retained by the club for future issuance, a few thousand here or there wouldn’t have moved the needle.

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What is cryptocurrency?

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Cryptocurrencies are an alternative way of making payments to cash or credit cards. The technology behind it allows the ‘money’ to be sent directly to others without it having to pass through the banking system. For that reason they are outside the control of governments and are unregulated by financial watchdogs – and transactions can be made in a way that keeps you reasonably pseudonymous.

If you own a crypto-asset you control a secret digital key that you can use to prove to anyone on the network that a certain amount of that asset is yours. If you spend it, you tell the entire network that you have transferred ownership of it, and use the same key to prove that you are telling the truth. Over time, the history of all those transactions becomes a lasting record of who owns what: that record is called the blockchain.

Bitcoin was one of the first and biggest cryptocurrencies and has been on a wild ride since its creation in 2009, sometimes surging in value as investors have piled in – and occasionally crashing back down. Dogecoin – which started as a joke – has also seen a stratospheric rise in value.

Sceptics warn that the lack of central control make crypto-assets ideal for criminals and terrorists, while libertarian monetarists enjoy the idea of a currency with no inflation and no central bank.

The whole concept of cryptocurrencies has been criticised for its ecological impact, with “mining” for new coins requiring vast energy reserves and the associated carbon footprint of the whole system.

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But the stunt symbolised something more, the burgeoning love affair between football and cryptocurrency, an alliance that holds the promise of new revenue streams for a game that is already awash with cash but always wants more.

Football finance expert Kieran Maguire thinks clubs have latched on to crypto because revenues from other sources are starting to level off, having risen reliably for decades.

“Football clubs have realised that we’re now at max broadcast revenues, with modest growth at most to look forward to,” he said.

“As far as commercial sponsors are concerned, we’re seeing deals being renewed but not with increased money. The only way to increase matchday sales is to increase prices and fans are reluctant.”

Manchester United – whether one believes the club or not – claims to have 1.1 billion fans on the planet. With revenue of £488m in 2019-20, that’s just 45p per year, per fan.

“Clubs are thinking: ‘Can we ‘find another way of extracting money out of that huge fanbase?’ That’s where tokens come in.”

When AC Milan launched a token in early 2021, it raised $6m (£4.4m) in under an hour, or about 12% of the value of the club’s record signing, Leonardo Bonucci. Paris Saint-Germain’s token, the most valuable, has a market value of $45m.

In the murky and unregulated world of crypto though, it’s hard to know how much clubs are actually making. Socios said last year it had sold $300m worth of fan tokens but would not say how much of that went to the clubs with which it partnered.

Other platforms, such as Binance, are also moving into the fan token market, indicating there is room for growth, particularly given that only a few dozen clubs have entered the market in any meaningful way.

Pedro Herrera, senior blockchain analyst at DappRadar, a marketplace for blockchain-related apps, said that most fans buy tokens for the associated perks, such as votes on small decisions about which song to play over the stadium tannoy after a goal, or entry into a draw to win a signed shirt.

“It’s a win for the fan because they feel more involved; it’s a win for the team because it’s adding a layer of monetisation; and it’s a win for the [crypto] industry because you attract the masses and it’s one step closer to mass adoption.”

Maguire isn’t against crypto but adds a more sceptical tone: “Lots of fans love crypto and in its purest form it’s great. Banks have been overcharging people for years in terms of transaction fees and if crypto can reduce those fees that’s fantastic.”

“The problem is when unscrupulous traders, particularly via social media, seek to exploit fans who think a token is a serious investment product, rather than a glorified collectible.

“It’s magic beans. So long as it’s sold as a digital Panini card, it’s OK. But when it’s being seen as a form of investment, it’s moving into uncomfortable territory.”

“It’s unregulated, it’s volatile and it’s subject to manipulation by people who own large amounts of the asset.”

Fan tokens, though, are a mere paragraph in football’s rapidly unfolding crypto saga.

In 2021, crypto sponsors piled into football and were welcomed with open arms by cash-hungry clubs, leagues and players.

Watford player with stake.com shirt
Watford have perhaps England’s biggest crypto deal, a front-of-shirt sponsorship from Stake.com, which offers crypto gambling. Photograph: Tess Derry/PA

Exchange app Crypto.com sponsors Italy’s Serie A, one of the world’s most glamorous leagues, while Socios is Internazionale’s shirt sponsor. EToro, a trading platform that facilitates investment in multiple cryptocurrencies, has deals with more than half of the clubs in the Premier League.

Southampton players are understood to have been offered the option to be paid bonuses in bitcoin, as part of a £7.5m-a-year deal with Coingaming Group. And in January 2021, striker David Barral made history when he became the first player in a major league to be signed with bitcoin, albeit in Spain’s third tier with Internacional de Madrid.

Much better-known players and ex-pros, such as Paul Pogba and John Terry, are promoting cryptocurrencies, trading platforms and non-fungible tokens (NFTs) – the controversial digital art form – too.

This should come as no surprise given the reach that big-name stars have via social media and the money they can make from promotions. Other partnerships are perhaps more unexpected. Visitors to the Twitter profile of former Republic of Ireland international Tony Cascarino might have been wrongfooted by the former striker’s sudden change of pace midway through 2021. One moment he was musing on the latest developments in the Premier League, the next he was evangelising about blockchain bank Babb (no relation to former Ireland teammate Phil) and musing that the “crypto market is on fire”.

Even in its infancy, the reputational risks of this new commercial pact between crypto and football have become all too clear. Last year, Manchester City’s deal with a mysterious firm called 3Key Technologies fell apart in a matter of days as it emerged that nobody seemed to know anything about the company or its executives.

Arsenal FC ad promoting fan tokens
The Advertising Standards Authority banned Arsenal FC ads promoting fan tokens. Photograph: ASA/PA

In December, Arsenal were rapped on the knuckles by the Advertising Standards Authority (ASA), which banned a club promotion that it said was exploiting fans’ “inexperience or credulity, trivialising investment in crypto assets, misleading consumers over the risk of investment and not making it clear the ‘token’ was a crypto asset”.

“For those in sport looking for sponsorship, it’s a whole new market of opportunity but it’s a bit of a landmine you’re dealing with,” said Bill Esdaile, managing director of sports marketing agency Square in the Air.

“My gut feeling is that such a small percentage of people understand how [crypto] works that too many decisions are made on trust, thinking that if [crypto firms] say they’ve got the money, they do.”

The amounts on offer appear to be going up.

Premier League strugglers Watford have perhaps the country’s biggest crypto deal, a front-of-shirt sponsorship from Stake.com. The site offers crypto gambling, which isn’t legal in the UK but may appeal to the league’s hundreds of millions of viewers around the world.

The arrangement even means that Watford players’ shirt sleeves bear the logo of Dogecoin, a “joke” currency whose value swings around wildly, often in response to tweets by Tesla multibillionaire Elon Musk.

Kieran Maguire estimates that the shirt deal could be worth up to £8m, based on the typical value of such partnerships, while an insider at Watford told MSN in August that the Dogecoin sleeve display added £700,000 into the mix.

Sums like these will become increasingly difficult for clubs to ignore, he thinks, particularly if the government goes ahead with a root-and-branch overhaul of gambling regulation that could see football lose the cash cow of shirt deals with betting firms.

“They [clubs] see the token market as slightly to one side, it won’t get picked up by the gambling review and it will help fill the gap,” says Maguire.

“Those deals of £5m to £8m could be replaced by NFT advertising and by crypto.”

In a recent paper, psychology researcher and gambling expert Dr Phil Newall warned that football sponsorship may be about to swap one risky product for another.

“Research has found that cryptocurrency traders are likely to have problem gambling symptoms, and has identified psychological similarities between cryptocurrency trading and online sports betting,” wrote Newall. He believes removing gambling advertising may create more space in which to legitimise equally dangerous products.

As they burn through cash in the pursuit of glory, it seems unlikely that clubs will worry about that.

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Brace for a shock: cost-of-living crisis drives up price of electric car charging | Electric, hybrid and low-emission cars

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While petrol price rises may have made the headlines, the energy crisis has also been hitting owners of electric cars in the pocket. The cost of charging at home has risen by 43% for some drivers, while the already higher cost of on-the-road recharges has gone up 25%.

As energy prices are forced up due to rising costs for suppliers, specialist charging deals for drivers have become more scarce. And now there are suggestions that people may put off the purchase of an electric car as the cost-of-living crisis takes hold.

Although demand for vehicles is high, a new report to be released this week from Volkswagen Financial Services suggests that fewer people might commit to buying electric vehicles (EVs) as belts tighten and the cost of energy increases.

“The cost-of-living squeeze will probably mean some potential EV purchasers may not commit to a switch this year, particularly as such vehicles are perceived to be more expensive in relative terms when compared to combustion engine alternatives,” says the report.

Home charging

Electric car owners who are charging their vehicle at home will usually find the most cost-efficient option is one of the specialist tariffs on offer. “Two-rate” tariffs offer one price for electricity used during the day and another for night-time use. When prices are much lower you can top up your battery cheaply.

For example, comparison site Love My EV lists the rates for EDF’s GoElectric 35 as 44.69p per kilowatt hour (p/kWh) during the day and 4.5p/kWh at night. The Octopus Go tariff costs 35.04p/kWh during the day and 7.5p/kWh at night. Both figures are based on supplying a home in south Wales.

Three electric cars charging at a roadside station with an attractive yellow zig-zag canopy sheltering the chargers
A public charging station in Sunderland: many electric vehicle owners cannot charge at home and must pay on-the-road rates. Photograph: Christopher Thomond/The Guardian

Since energy prices have increased, the number of specialist deals on the market has dropped, says Laura Thomson, co-founder of Love My EV. While they are usually the best deals for drivers who charge overnight, the day rate and standing charge can be expensive, which consumers need to take into account when working out what is best for their situation.

“For most people who have an EV to charge at home, it does make sense, but there is a high standing charge and a high day rate to factor in,” says Thomson. If you use a lot of electricity during the day, this may not be your best option.

The site has a comparison tool for tariffs. Beware of promises of “free miles” within tariffs as these savings may be outweighed by higher charges, it says.

The rising price of EV tariffs means drivers now face paying 43% more than a year ago. This amounts to a rise of about £75 a year for an average vehicle such as a Nissan Leaf or a Renault Zoe, says Ben Nelmes of transport research company New AutoMotive.

In 2021, the cost of recharging an EV that covered 7,400 miles a year – the average mileage – and was recharged mostly at night was £174. This was based on an overnight rate of 4p/kWh and a day rate of 18p/kWh. By last month, this same charging practice cost £249 a year, based on the best prices then available – 5p/kWh at night and 28p/kWh during the day.

“Someone driving a bigger EV, such as a Kia e-Niro or Tesla, will find that this underestimates what they’ll be paying. Similarly, someone in a Smart car will find they spend a bit less than this,” says Nelmes.

On the road

Rising costs have also become apparent at public chargers. Instavolt, which operates a charging network across Britain, has increased its prices twice so far this year, first from 45p/kWh to 50p/kWh and then to 57p/kWh. Ubitricity, one of London’s largest charging networks, increased prices from 24p/kWh to 32p/kWh last month.

Data company Zap Map, which maps public charge points, found that, on average, charging costs increased from 24p/kWh in December to 30p/kWh in February for slow and fast chargers, and from 35p/kWh to 44p/kWh for rapid and ultra-rapid chargers.

“The price of charging your EV on the public network, or at home, has risen substantially over the past few months with the general increase in electricity prices,” says Melanie Shufflebotham from Zap Map.

There are 460,000 EVs currently in the UK, according to the Volkswagen Financial Service report, and just 300,000 home charger points installed. Those who don’t have a home charger end up paying more, according to Keith Brown of Paythru, a payments technology company. “One of the big inequities of the emerging EV charging market is the price ‘premium’ electric vehicle drivers pay if they don’t or can’t have a home charge point,” he says. “Domestic supply is taxed at a VAT rate of 5% whereas public charge-point supply is taxed at a VAT rate of 20%.”

Shufflebotham has called for the rates to be made equal. “Equalising the VAT rate for both public and home charging would be a great example of levelling up, and encourage more people to make the transition to electric vehicles,” she says.

The advantages

Despite increasing prices, EV drivers still face much lower bills than those with petrol or diesel cars, using figures based on the same annual mileage for all types of vehicle.

Nelmes says that while the rises in the costs of EV charging at home are high, they are dwarfed by the costs of filling a car with fuel.

“We estimate the average UK motorist would spend £1,028 per year on petrol and £987 per year on diesel. That’s up from £796 a year on petrol and £747 a year on diesel a year ago,” he says. “That means that the fuel cost savings available to petrol and diesel drivers who switch to EVs this year are £779 for petrol drivers and £738 for diesel drivers.”

Case study: positives and negatives

Having bought a Nissan Leaf in the last few weeks, Philip Ingram looks back at the deals that were available last year with some annoyance.

He currently pays a flat rate throughout the day of 28.45p/kWh with British Gas, the best tariff available to him at home in Bordon, Hampshire. Last year, he could have taken advantage of deals of 5p/kWh overnight, he says. While there are deals with good night-time rates, now their high day rates mean they do not suit the family budget.

The annoyance is tempered by the savings from moving from a diesel VW Golf to an EV.

Ingram, who runs a cotton company called LittleLeaf Organic, used to pay nearly £90 to fill up with diesel but gets the same mileage for £20 of charging. This has to be balanced against the cost of the car: £24,000. “I wish we had done it a long time ago,” he says, “but the reason that we have been slower is … capital costs. Several times I have said to [my wife] Lisa the running costs are unbelievable, but then you look at the cost of buying this car, [which] is enormous.”

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Web ad firms scrape email addresses before you know it • The Register

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Tracking, marketing, and analytics firms have been exfiltrating the email addresses of internet users from web forms prior to submission and without user consent, according to security researchers.

Some of these firms are said to have also inadvertently grabbed passwords from these forms.

In a research paper scheduled to appear at the Usenix ’22 security conference later this year, authors Asuman Senol (imec-COSIC, KU Leuven), Gunes Acar (Radboud University), Mathias Humbert (University of Lausanne) and Frederik Zuiderveen Borgesius, (Radboud University) describe how they measured data handling in web forms on the top 100,000 websites, as ranked by research site Tranco.

The boffins created their own software to measure email and password data gathering from web forms – structured web input boxes through which site visitors can enter data and submit it to a local or remote application.

Providing information through a web form by pressing the submit button generally indicates the user has consented to provide that information for a specific purpose. But web pages, because they run JavaScript code, can be programmed to respond to events prior to a user pressing a form’s submit button.

And many companies involved in data gathering and advertising appear to believe that they’re entitled to grab the information website visitors enter into forms with scripts before the submit button has been pressed.

“Our analyses show that users’ email addresses are exfiltrated to tracking, marketing and analytics domains before form submission and without giving consent on 1,844 websites in the EU crawl and 2,950 websites in the US crawl,” the researchers state in their paper, noting that the addresses may be unencoded, encoded, compressed, or hashed depending on the vendor involved.

Most of the email addresses grabbed were sent to known tracking domains, though the boffins say they identified 41 tracking domains that are not found on any of the popular blocklists.

“Furthermore, we find incidental password collection on 52 websites by third-party session replay scripts,” the researchers say.

Replay scripts are designed to record keystrokes, mouse movements, scrolling behavior, other forms of interaction, and webpage contents in order to send that data to marketing firms for analysis. In an adversarial context, they’d be called keyloggers or malware; but in the context of advertising, somehow it’s just session-replay scripts.

Gunes Acar, one of the report co-authors, was also the co-author of a similar research project in 2017 that looked at data gathering by session-replay companies Yandex, FullStory, Hotjar, UserReplay, Smartlook, Clicktale, and SessionCam.

Evidently, not much has changed since then, except perhaps that email addresses have become more desirable as unique identifiers now that privacy-oriented browsers like Brave, Firefox, and Safari are taking more steps to block cookies and tracking scripts.

Email addresses, the researchers observe, represent a cookie replacement because they’re unique, persistent, and can be used to track people across applications, platforms, and even offline interactions that may be tied to an email address like loyalty card transactions.

The website categories with the most leaking forms include: Fashion/Beauty (11.1 per cent, EU; 19 per cent US); Online Shopping (9.4 per cent EU; 15.1 per cent US); and General News (6.6 per cent EU; 10.2 per cent US).

Websites categorized as Pornography had the best privacy when it comes to surreptitious form data harvesting.

“A somehow surprising result was the following: despite filling email fields on hundreds of websites categorized as Pornography, we have not a single email leak,” the researchers say, noting that previous studies of adult-oriented websites have relatively fewer third-party trackers than similarly popular general interest websites.

Those pesky regulations

The report authors say that EU websites practicing email exfiltration may be in violation of at least three GDPR requirements: transparency, purpose limitation, and prior consent. Firms found to be violating these rules can be fined up to $20m euros or 4 per cent of annual revenue, per Article 83(5).

The US doesn’t have a federal data privacy law, though it’s conceivable one of the handful of US states with applicable privacy rules could take action against pre-submission form harvesting. But given the toothlessness of US privacy regulation over the past decade, don’t expect much.

The authors say they attempted to contact 58 first-parties and 28 third-parties with GDPR requests. They report receiving 30 responses from the first-parties, which varied from surprise and remediation to justifications of one sort or another.

“fivethirtyeight.com (via Walt Disney’s DPO), trello.com (Atlassian), lever.co, branch.io and cision.com were among the websites that said they had not been aware of the email collection prior to form submission on their websites and removed the behavior,” the report says.

Marriott, meanwhile, said the information collected by digital analytics firm Glassbox helps with customer care, technical support, and fraud prevention.

Third-parties Taboola, Zoominfo, and ActiveProspect defended their data collection practices.

Facebook, aka Meta, is among the third-parties involved in this. The researchers say that email addresses or their hashes were spotted being sent to facebook.com from 21 different websites in the EU.

“On 17 of these, Facebook Pixel’s Automatic Advanced Matching feature was responsible for sending the SHA-256 of the email address in a SubscribedButtonClick event, despite not clicking any submit button,” the report says.

Advanced Matching – called out recently for harvesting student loan data – is designed to collect hashed customer data, such as email addresses, phone numbers, and names from checkout, sign-in, and registration forms. The researchers speculate that on these sites, Facebook’s script treats clicks on non-submit buttons as a click event for the submit button.

Facebook did not respond to a request for comment.

The report concludes that browser vendors, regulators, and privacy tool makers need to deal with this issue because it isn’t going away. “Based on our findings, users should assume that the personal information they enter into web forms may be collected by trackers – even if the form is never submitted,” the report concludes. ®

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VC funding in Ireland rose in Q1, but not for deals under €10m

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A William Fry-commissioned report has found that funding deals under €10m have taken a big hit in the first three months of 2022.

Venture capital funding into Irish tech businesses was up by more than 50pc in the first quarter of this year, but there’s an unfortunate and potentially troubling caveat to that.

The Irish Venture Capital Association (IVCA) has published today (15 May) its latest report on VC funding into tech start-ups and SMEs in Ireland, which found that the investments increased by 52pc to €379.7m in the first three months of 2022, compared to the same period last year.

Future Human

But the report, commissioned by Dublin law firm William Fry, also found that VC funding in deals valued less than €10m have taken a hit.

IVCA chair Nicola McClafferty said that the headline figure of a funding boost conceals a “potentially worrying fall” of 30 to 50pc across all categories of deals under €10m – including seed funding.

“All the growth came from eight deals worth over €10m each, including three over €30m. While the momentum carried over from last year has continued for more established companies raising large rounds, some of that impetus seems to have stalled for earlier stage companies.”

Even the total number of deals overall fell by almost a third to 50 from 74 in the same period last year.

McClafferty said that this could be related to international trends affecting the business world right now, such as Russia’s invasion of Ukraine.

“While challenging market conditions may continue, we also know that many great companies are started and built in times of downturn, so we await with interest the data in the coming quarters,” she added.

Deals in the €5m to €10m range fell in value by more than half, while those in the €1m to €5m range also halved from €70.3m last year to €34.5m in Q1 2022. The value of deals below €1m dropped by 31pc to €8.9m.

Seed funding also took a hit, falling by nearly 40pc to €22.3m from €36.5m last year.

Nearly four-fifths of all funding came from overseas sources, according to IVCA director-general Sarah-Jane Larkin.

“While this is to be welcomed and emphasises the quality of Irish tech firms and their appeal to international investors, we have expressed concern before about where any shortfall would be made up if the global economy contracts,” she said.

Wayflyer, Ireland’s latest tech unicorn, led the way in terms of total value of funding received with a $150m in Series B funding valuing the start-up at $1.6bn. Flipdish, another Irish tech start-up that became a unicorn this year, raised $100m reaching a $1.25bn valuation.

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