Recently, the existence of cryptocurrencies and NFT sponsors has exploded. Let’s see how these sponsors affect the world of F1. (Note: This article is not intended to be interpreted as financial advice from the author or GPblog.com, it exists only as a useful article on the topic.)
NFTs (or non-fungible tokens) are unique digital items that are auctioned and sold. Because they are unique, they cannot actually be used as a form of currency, but they can be used as collectable items. However, the purchaser of an NFT is not even the complete owner of the original work held by the original creator. Instead, they own the right to display or sell the item.
Overall, the NFT market is still relatively new. These purchases are a bit strange to understand the purpose, as there isn’t enough framework to prevent illegal redistribution. This has led many to believe that the market itself is bloated, overwhelmed by the hype of ideas, and overestimating some of the items on the market.
Cryptocurrency (often called cryptography) is a type of digital currency. Created after the global financial crisis of 2008, it exists as a way for people to manage their own money, reducing their reliance on large corporations and governments. Since then, it has evolved into a more speculative market, lagging behind the use of crypto as a viable payment method for most of the world.
Currently, the market exists primarily as a high-risk / high-reward investment option. With the huge number of currencies available, many are not sure what the “next big thing” is, which is more confusing than the certainty of the market itself. Other malicious schemes, such as “pump and dump” where influencers and celebrities push out certain currencies, were also born, and after many abandoned the project, demand surged before a sudden crash.
F1 and its relationship
Even the most up-and-coming F1 fans frown on the sheer number of cryptocurrencies and NFT sponsors. The title sponsor of the Miami Grand Prix is crypto.com, which happens to be the sponsor of the Aston Martin F1 team. Alfa Romeo and Aston Martin have “fan tokens” on the sports cryptocurrency platform Socios.com. Mercedes has partnered with FTX, a digital asset exchange, and currently sells car renderings with stylized designs. Pierre Guthrie sells helmet design renderings on the phantom blockchain.
The list will continue to grow. To “mint” these cryptocurrencies and NFTs on the blockchain consumes a lot of energy and has a negative impact on the climate. Net domestic product may be lower than other industries, but it is hypocritical to violently oppose climate change while receiving payments from industries that are making a growing contribution to climate change. The market is also relatively new, so many exploitative plans and scams are now incorporated into the territory. With so much confusion and negativity surrounding these, the F1 team can consider it ethical to promote such a platform, and whether it undermines their image in the long run. It needs to be scrutinized.