How F1 is embracing cryptocurrencies

They used to say cash is king, but that's definitely not the case any more.

It also used to lubricate many a motor racing transaction and, when I say cash, I literally mean big piles of it. Often in suitcases, sometimes in the proverbial brown envelope. I once had a driver, whose father owned an amusement arcade, bring me a sponsorship payment in £1 coins, which took two mechanics just to lift the boxes.

That's the problem, however, because in days gone by cash became synonymous with undeclared income, which means tax evasion. 
This is one reason why governments and central banks promote the convenience, and scrutiny, of digital transactions.

While most of us are familiar with contactless payment cards, when it comes to moving chunks of money around the world things are more arcane. Central banks make a lot of money from exchange rates, transaction fees and commissions, and take their time over it.

That's why there has been a big buzz in recent years about cryptocurrencies, starting with Bitcoin in 2008. Digital currencies which eliminate Mr Banker. Instant transactions, secure, tradable and 'distributed', which means decentralised. The power lies with the user, not a central authority.

Two such currencies have arrived in Formula 1 this year and their PR emphasises the sport's suitability based on speed, data and high performance.

Soccer Coin announced that Haas driver Romain Grosjean - a former Geneva banker - would become a brand ambassador, while Futurocoin partnered with Red Bull.

A 'revolution in the sports business' is how Soccer Coin describes itself. It is focused on enabling soccer fans to transact by using their favourite club's own currency held in a mobile app. This includes buying tickets and making purchases while inside the stadiums. Leave mid-match and you can sell your ticket to another fan.

A micropayment on each transaction goes directly to the club or, intriguingly, to an appointed charity or environmental project.

Founded in Malta but run from Salzburg by CEO Andreas Heidl, Soccer Coin's aim is to blaze a trail for cryptocurrencies in the world of sport, generating revenue for teams, rights holders and promoters alike.

Futurocoin's proposition is that of a cryptocurrency, named FTO, which can be used to make any kind of purchase while offering a faster transaction speed than the ubiquitous Bitcoin.

It was founded by Polish businessman Roman Ziemian and his German partner Stephan Morgenstern, who met through working on Blockchain technology - the system by which a series of financial or data transactions can be made in a secure, transparent and unalterable way. Ziemian admits to being a big F1 fan, although the business reasoning behind a deal with Red Bull falls to Futurocoin's CEO Paulina Wozniak.

"Our goal is to build brand awareness of our cryptocurrency," she says, "build Futurocoin as a socially responsible brand and stop the perception of cryptocurrencies as being unavailable or obscure."

This latter point is key because, for many, the media coverage of cryptocurrencies has often majored on concerns over fluctuating values, lack of regulation, tax evasion, use on the dark web, and fraud.

By using the platform of F1, Soccer Coin and Futurocoin represent something rather important: an ambitious push to educate people about the genuine benefits of digital currencies and potentially open the door to new revenue streams.

Ferrari Coin, anyone?