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Blockchain-Based Ticketing Solutions - The Future, Or Hype?

Posted in Spotlights on March 15, 2018

What if the only way you could buy tickets was through paying with Bitcoin? At this point in time, Bitcoin and cryptocurrency have been hot topics. You might have even heard about what a blockchain is before in relation to Bitcoin. What if I told you that right now there are efforts to make ticketing part of this ecosystem of new technological developments? In this article, I’m going to first define a few key terms such as a blockchain, then I will discuss why a blockchain-based solution could be the future of ticketing. However, such a solution requires adoption by artists, and a refusal to purchase tickets from non-blockchain based companies. At the same time, I’ll look at the downsides of the blockchain, and why we may not see a rapid adoption.

What Is A Blockchain?

The term “blockchain” has become a bit of a buzzword, but it is a really powerful piece of technology. A Blockchain contains a list of records called “blocks” that are linked (chained) together using transaction data and a timestamp. Because this data is all connected, it can’t be easily modified. To modify a block of data, one would have to modify all of the other blocks of data as well. This means less risk for fraud and less risk for other manipulation of transaction data. Another bonus behind the blockchain is that it is decentralized, and it is relatively simple to transfer data in an anonymous way.

A lot of industries are currently testing using blockchains - land sales, for example, are a lot easier to track when you know exactly who owned it before thanks to the data being collected. Banks and investment firms are also testing out blockchains so that they can securely move and analyze money, deed transfers, and other sales.

What is Ethereum?

Ethereum is blockchain-based, open sourced platform and system. One of the issues with Bitcoin is that the time needed to create one “block” of data can take 10 minutes or more. With Ethereum, the time needed to create one “block” of data can be less than a minute. For this reason, most projects based on the blockchain utilize the Ethereum system.

You -might- have a good idea of where I am going with this, so I’ll describe a potential use in ticketing.

Person 1 buys a ticket from a provider that is on a ticketing blockchain, creating a block of data. They then go to sell it to Person 2. And this is all well and good because now Person 2 has purchased the ticket and they have it in their possession. The big deal is that records will still show that Person 1 was the original purchaser of the ticket, even though Person 2 is now the second purchaser. And say that Person 2 sells it to Person 3 - the records will show that Person 1 and Person 2 were previous owners, although Person 3 now holds it.

By itself, this is a cool thing to track, but what really matters is how a ticketing blockchain creates more power for the artist and discourages scalping.

A Ticketing Blockchain Could End Scalping

Normally, when an organizer sells a ticket to an event, it’s out of their hands. The person who purchased the ticket can proceed to do pretty much anything with their ticket that they want. They can keep it - or, if the ticket is highly prized, they can sell it on the secondary market for far more than they paid for it. This has become a huge issue especially with large concerts and in-demand artists because not only are fans not able to see them in concert, they also do not receive any benefit from a resold ticket.

A blockchain can put a stop to all of this.

Let’s go back to my ticketing example. Person 1 buys a ticket to a sought-after concert for $50. They want to go sell it on the secondary market for $150. However, the ticket that they purchased is a block of data on the ticketing blockchain. Each blockchain has its own rules, and none of the data can be modified. The artist has set rules on this particular blockchain that tickets cannot be resold for more than 50% of what they were originally purchased for. In addition, there is another rule set artist will receive 10% of all tickets being resold.

Of course, you might think, well why doesn’t the person just email the ticket? That’s because all sort of blockchain applications require an app, or a marketplace, to function. A ticketing marketplace could make it so that you are unable to just transfer the ticket - you would have to pay, in app, for the opportunity to get that ticket. This would mean that cash transactions are out of the question. The winners are fans and artists, and the losers are scalpers. That’s just how it should be.

Issues with Adoption

Companies like Ticketmaster stand in the way of ticketing blockchains being widely adopted by artists and by venues. Ticketmaster, in particular, has contracts with major stadiums and venues. No doubt you may have heard about how primary and secondary ticket providers collude to set aside certain portions of tickets to sell on the secondary market for grossly inflated prices. Because anti-scalping procedures would cut into the profits of larger ticketing entities, they might not want to follow suit. Or, in the case of electric cars, they might even buy these companies and shut them down.

Downsides To Ticketing Blockchains

There are three downsides to ticketing blockchains: purchase, apps, and check-in.

Purchases that employ a blockchain solution always take longer than normal transactions due to the time needed to create a new “block” of data. This presents an issue for organizers, because overselling is a possibility, especially for the big artists that such a feature might benefit in the first place. Right now, how ticket purchase works is that someone “reserves” a ticket, then is taken to the checkout process. Card transactions are registered within seconds, so there is no real lag. However, as mentioned before, a transaction on the blockchain could take a much longer time. Significant restructuring of how tickets are purchased would be needed for any ticketing blockchain solution. In fact, there are a lot of news articles about how bitcoin conferences aren't accepting the cryptocurrency because of the lag time in payment. 

The second downside for any sort of ticket on the blockchain is that you will have to require customers to download an app in order to even access their ticket on a mobile device. This could be frustrating for them, and it creates an additional friction point in the purchase process.

Check-in is yet another issue that will appear with a ticketing blockchain. The scanning process to confirm purchase could take almost half a minute to look up the correct record on the ticketing blockchain. Multiply 30 seconds by 2,000 people, and you will begin to realize why this is such a huge problem. One might think that scanning wouldn’t be an issue because of QR codes, but what happens is that a QR code is merely a way of storing some data. Normal data does not need to be stored on a blockchain, which is why it is so quickly scanned.

An Alternate Solution To Ticketing Blockchains

One solution put forth by a developer at Ticketbud is to simply store all tickets to a single phone number. Tickets cannot be transferred, they are instead released back into the marketplace.

I hope that this article was able to educate you a bit on how a blockchain works, and how it could be related to the ticketing space. Ticketing blockchains have potential to be used in anti-scalping and anti-touting campaigns, as well as being used for transfer. However, blockchain-based solutions tend to be slow, and this could cause issues with adoption and scanning speed. There are more than a few companies devoted to bringing about a ticketing blockchain. The future holds a lot of potential for the ticketing space - the biggest issues being adoption by artists and education of attendees.

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