Technology / 03.05.18
The 5 Basics of Blockchain for Ticketing Professionals
Everyone’s talking about it: blockchain. It’s the hot topic of the moment, and experts assure us this disruptive technology isn’t going away anytime soon.
They say it’s connected to cryptocurrency, but why exactly is that necessary or relevant to the ticketing industry? We’ve compiled the top five basics of blockchain to equip ticketing professionals with the knowledge you need to engage in the conversation. Let’s get started.
1. What Is Blockchain?
In the simplest terms, blockchain is a massive database (“network”) that millions of computers (“nodes”) can access worldwide. When a computer joins a network as a node, they receive a copy of a blockchain, which is literally a chain of “blocks.” Blocks are groupings of transactions, and each block is linked to a specific participant. When new data is entered, it can never be erased. It is important to note that blockchain came to prominence as a part of Bitcoin, the digital currency, and thus the two are often described in connection with one another.
There is a Harvard Business Review article from one year ago titled, “The Blockchain Will Do to the Financial System What the Internet Did to Media.” The writers note that, “We might best understand Bitcoin [the first decentralized digital currency] as a microcosm of how a new, decentralized and automated financial system could work.” This means that blockchain could be a completely new way to think about how consumer, banks and the financial sector at large all interact with one another.
2. Why Is Blockchain Unique?
Blockchain answers the demand for transparent transactions. According to Forbes, “Blockchain systems include a fully auditable and valid ledger of transactions. This ledger is indelible and unforgeable.” It’s impossible to delete a blockchain transaction.
According to Alex Tapscott, CEO and founder of Northwest Passage Ventures, a venture capital firm that invests in blockchain technology, the draw of blockchain technology is all about security. “To hack [the network], you wouldn’t just have to hack one system like in a bank… you’d have to have every single computer on that network, which is fighting against you doing that,” Tapscott says. “[It’s] not un-hackable, but significantly better than anything we’ve come up with today.”
This concept essentially is showing that there is safety in numbers; because the ledger is stored on hundreds or thousands of computers, it would be almost impossible for a hacker to infiltrate every single system the ledger is stored on.
3. Who’s Already Using Blockchain Technology for Ticketing?
The Dallas Mavericks recently announced that fans of the team will be able to purchase tickets for the 2018-19 season using cryptocurrency. Although this is relatively big news for the industry right now because Bitcoin is a hot topic, the Mavericks aren’t actually the first team to offer cryptocurrency-enabled tickets. The Sacramento Kings started accepting Bitcoin near the end of 2014’s first quarter, which is almost four years before the Mavericks’ big cryptocurrency news.
Blockchain can also solve the problem of overwhelming demand for concert tickets outstripping supply. The recent startup CEEK uses a blockchain framework to enable artists to sell unlimited virtual tickets and digital merchandise, all within a more reliable and secure procurement platform.
4. How Can Blockchain Affect Ticket Reselling?
Tickets today are still easy to forge, and they’re inconvenient to store and resell. Blockchain technology can allow users to manage purchased tickets easily, via safe transferring and storage abilities. It can even be used to sell tickets to secondary markets with sales rules decided by the seller. With blockchain technology, ticket buyers can see all fixed, accurate ticket details in one place. Transparency, again, is the name of the game.
Eric Rozenberg, CEO of SecuTix USA, in remarks to the attendees at INTIX 2018, spoke to blockchain’s potential power in the ticketing industry.
“Imagine you apply blockchain technology to a ticket, any ticket,” said Rozenberg. “That means that from the moment a ticket is sold, then returned, resold or offered to somebody else, it will be possible at every stage to guarantee the authenticity of the ticket and to know who the final user is … even activating the ticket at the last minute just before the final owner of the ticket enters the venue.”
There are a few examples of businesses already using blockchain technology for better, safer, fraud-free ticket sales. Aventus uses blockchain to give each ticket a unique identification that enables only one person to use that ticket. Since the original ticket price is permanently documented in the transaction, a buyer doesn’t have to trust the seller to give them a good deal. Both parties know how much the original ticket cost.
Crypto.Tickets has developed a blockchain-based, back-end solution and app, which serves as the client interface for users. The platform sends each ticket to the individual buyer’s crypto wallet.
5. Is There a Catch?
You didn’t expect all this wonderful transparency, security and efficiency to come without a catch, did you? Unfortunately, blockchain technology comes with soaring transaction fees. In a recent article on Access, the author noted, “The latest BitInfoCharts data shows that the average Bitcoin transaction fee has increased to $26.”
Ryan Radloff, cofounder and principal at CoinShares, told CNBC, “One of bitcoin’s biggest problems right now is that so many people want to use the currency that, from time to time, the network gets bogged down.” Radloff says this leads to the high transaction fees: When many people are trying to make transactions at the same time, the different networks are slow to update everything in real time. This problem could eventually be solved by the “Lightning Network,” Radloff says, which would allow users to send multiple transactions to and from outside of the blockchain — acting as a second layer. But that’s a discussion for the future.
So there you have it, folks: the basics of blockchain and how it fits into the ticketing industry. Keep blockchain in your line of sight ― it’s here to stay, just like its transaction records.
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Dive deep into blockchain at the INTIX 40th Annual Conference in Texas on Jan. 29-31, 2019. Matthew Zarracina, co-founder and CEO of True Tickets, will deliver "Demystifying Blockchain — Impacts for the User Experience and Ticketing Professional," and a panel of industry leaders will give their thoughts on the new technology in "Decentralized: How Blockchain Technology and Open-Source Software will Revolutionize the Ticketing Industry."
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Tags: Paperless , Reselling , Bots , Blockchain , Secondary Ticketing