Blockchain vs Counterfeit: Redefining event ticket security
The importance of blockchain technology in the ticketing process
With the events industry developing, ticket counterfeiting has become a significant issue. Traditional ticketing methods have become susceptible to counterfeiting and other fraudulent activities which diminish the trust of the customers and lead to lost revenue.
The possibility of implementing blockchain technology within ticketing processes brought to the table a higher degree of transparency and security. Blockchain's decentralised and tamper-proof features make sure that a ticket cannot be modified or duplicated. Smart contracts provide automatic verifications of ticket transactions and minimise risks of unauthorised access.
Several research studies have stated that the use of blockchain technology within the media and entertainment market will rise, and reach $1.57 billion by 2030.
Blockchain technology driven by smart contracts and NFT ticketing can resolve many important issues plaguing current ticketing systems, such as ticketing on the secondary market and ticket fraud, as well as reduce the time required by the traditional ticketing system.
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Current challenges of the ticketing industry
The growing events market is facing a few challenges. One of the most common frustrations among customers is that each event ticket typically comes with multiple fees that vary. It can be hard to keep up with the changing fees – the ticket’s life cycle usually involves several intermediaries and bots that spread through the traditional system.
Secondary ticket sale intermediaries charge high prices – they buy a broad amount of tickets before selling them at an increased price. A lack of collaboration on all fronts of the ticket’s lifecycle results in high prices and counterfeit tickets in circulation.
A 2016 review conducted by Professor Michael Waterson, an economics professor at Warwick University, reported that 23% of buyers thought that the reseller was the official seller along with 43% of users conducting searches on Google to buy tickets and ending up buying them on secondary ticketing websites without realising it.
This 2016 independent review highlighted the main flaw that characterises traditional ticketing systems – secondary ticketing platforms are not compliant with consumer rights as they don’t provide information such as the fair value of the ticket and exact seat locations.
Mass purchases conducted through the use of bots deprive ordinary users of the chance to acquire tickets at fair value which was originally established by the event organiser. The level of transparency is low and it is evident that something needs to change to ensure consumer rights and welfare.
That’s why blockchain technology has been taken into account as an innovative solution that could provide a higher level of transparency, efficiency, and accountability as well as fair ticket pricing established primarily by event organisers.
Advantages of NFT tickets for event organisers and attendees
In the last couple of years non-fungible tokens (NFTs) gained a lot of popularity. It can be said that they have taken the world by storm with their unique feature to provide authenticity and proof of ownership for everything from digital artwork to sports and music.
Even though the initial hype has been decreasing, NFTs are bringing along a new approach to ticketing that eliminates the risks of counterfeit tickets and scalping as well as new revenue streams.
NFTs can be a confusing concept to comprehend. They present unique digital assets that are stored on the blockchain as a decentralised and transparent digital ledger. Putting NFTs on a blockchain means that the ownership can be easily audited and verified.
Therefore, if we place tickets on the blockchain, each ticket transaction would be recorded on it and provide a transparent history of ownership that can be easily checked.
To understand NFTs better, we suggest reading this article: 'How does an NFT have value?'.
By embracing NFT tickets, NFT planners can set a maximum ticket price, even during the resale period. Being able to set boundaries on prices can reduce the incentive to buy as many tickets as possible and conduct pricey secondary sales.
Secondly, NFTs have been recognised in the past as a good way to provide new revenue streams for artists as well as fairly distributed royalties. NFT tickets could enable royalties from resales for artists, athletes, creators and event planners.
All these innovative features just need to be programmed within the smart contract. Organisers need to mint NFT tickets on a compatible blockchain platform and input information such as general event information, seating arrangements and ticket pricing.
Finally, NFTs are widely known as collectibles; therefore, an NFT ticket could be treated as such and resold after the event in the same manner people did in the past with physical tickets.
NFT tickets vs traditional tickets
Traditional ticketing and NFT ticketing represent two divergent methods of event ticket management. Traditionally, event organisers provide paper tickets or digital tickets and put them for sale. They are distributed through ticketing websites and authorised resellers.
On the other hand, NFT tickets use blockchain technology to create unique, non-fungible tickets to a particular event. They can be sold, resold, or collected after the transaction. The NFT ticket is accommodated on the blockchain and can be viewed by anyone. This ensures that the ticket is genuine and diminishes the risk of counterfeit tickets circulating in the event industry.
NFT tickets can have exclusive perks tied to them as well. Even if all tickets to certain events were NFTs, organisers can set up additional perks for VIP ticket holders such as access to particular benefits. Distribution of exclusive content and features is known as token gating which is another innovative method used within the event industry.
Additionally, the implementation of NFT tickets provides valuable data insights for event planners. For example, analysing ticket transfer patterns, demographics of ticket holders, and behavioural data can help in optimising future events, venue selection and marketing approaches.
Which issues can blockchain technology solve?
With the events industry slowly moving away from traditional paper tickets to blockchain-based solutions, event organisers need to create an efficient infrastructure and come up with efficient solutions on how to resolve current issues. Blockchain technology seems to be the answer to most of these questions.
The problem of counterfeit tickets
If a customer buys a ticket thinking they are purchasing it from an official source or credible reseller, but they can’t verify the authenticity of that ticket or never receive it at all, we are talking about ticketing fraud.
Blockchain can solve most of these problems since it enables oversight of all transactions on the chain, along with smart contracts that make sure that all required conditions are met before the ticket has been released.
Blockchain is a well-suited technology for verifying whether a ticket is legit or not. It can be set out in smart contracts how a ticket can be sold from one user to another; since they can be sold only within the smart contracts’ framework, it wouldn’t be possible to counterfeit a ticket.
Ticket reselling issues
Ticket reselling that is not legitimate is another problem that plagues the ticketing space. The web is full of scammers with fake websites that resell allegedly legitimate tickets. While you can always do your research to protect yourself from such scams, blockchain technology could make the whole process easier.
Using a blockchain explorer, customers can track a ticket’s history and authenticity. If all tickets are traceable, customers could be more assured of their credibility.
Inefficient and centralised systems
Finally, the current ticketing ecosystem is highly centralised. For example, if there is a rush to buy tickets,centralised servers, and websites can crash and cause delays in the whole process.
Unlike the traditional ticketing process, a decentralised blockchain network could provide a more streamlined process free from downtime or attacks.
Decentralisation is a term frequently tossed around the crypto community. To find out the reason behind that, check out this article: ' What is decentralisation & why is it important?'.
Are there any arguments against the use of blockchain technology for the event ticketing process?
Blockchain technology and NFT ticketing have many advantages, but there are a few challenges that need to be addressed to ensure a smooth adoption.
One of these challenges relates to the need to verify tickets rapidly at the place of the event. For example, imagine a sports event at a stadium with 65,000 tickets sold out. A few hours before the event there’ll be thousands of people standing in lines at the gates waiting for the personnel to scan their tickets. With the traditional ticketing method, tickets are being scanned every second.
The question that was going around the crypto community is whether blockchain can achieve the same speed and provide a comfortable event experience. Each event would have to adopt the necessary digital infrastructure to maintain a smooth entrance for attendees. Therefore, if 65,000 people are crowding at one stadium, network congestion might happen.
Another problem relates to, for example, cancelled tickets and refunds. The industry needs to address the issue of how to replace a cancelled ticket when it’s minted in the blockchain and burning would require more gas fees.
Blockchain considerations for the event ticketing space
As mentioned above in the text, an event ticketing infrastructure that leverages all the main perks of blockchain needs to be created with certain considerations in mind.
The first issue is whether to use public or private blockchains – it is often stated within the crypto community and industry experts that the use of a public blockchain amounts to decentralisation and permissionless access as well as the possibility to efficiently determine whether someone is an honest participant.
Secondly, we have already stated that network congestion might be a problem for the widespread adoption of blockchain within the ticketing industry. Gas fees can be expensive during network congestion, and this brings us to the scalability trilemma or the notion that a blockchain can only achieve two of three possible traits – decentralisation, scalability, and security.
Most blockchains are trying to resolve this issue by using Layer 2 scaling solutions to optimise computation and enable higher transaction throughput.
Finally, it should be considered which pieces of data would be on-chain and which would be off-chain. Due to the broad number of nodes, the requirement to reach consensus might be costly, and it is not effective to store all data on-chain.
NFT tickets and 2024 Paris Olympics: What happened?
Back in 2022, word came out that the tickets to the Paris 2024 Olympics might be sold as NFTs. The proposal was laid down by the French government with the aim to introduce a safer ticketing system.
The 30-page report with 5 recommendations was submitted to the Prime Minister’s Office stating that blockchain ticketing should be implemented for the 2024 Olympics and all big sports events held in Paris.
Apparently, the blockchain proposal came after the 2022 UEFA Champions League final in Paris and an alleged ticket fraud, with the purpose of enhancing security for major sports events.
However, there was no further discussion about implementing blockchain-based ticketing in the Paris 2024 Summer Olympics. Event organisers have started selling digital tickets in a traditional manner.
The French proposal
The report involved several major recommendations to ensure secure and personalised ticketing services used for 2024 Paris Olympics. The main idea was that each event attendee receives a ticket as a rotating QR code implemented by blockchain technology a few days before the event begins.
Secondly, it was proposed that NFT tickets become active within a particular perimeter of the event’s location to reduce the risk of ticket fraud. The tickets would be checked during pre-filtering and then would disintegrate as soon as the customer enters the venue site.
Additionally, these NFT tickets would be personalised so that ticket holders can receive interactive messages through digital channels about ongoing issues such as entry to the venue site and security.
The future of NFT ticketing
A successful implementation of NFTs within the space of event ticketing depends on several factors such as technological innovations, the possibility to efficiently resolve main issues as well as the willingness of participants to embrace it.
It can be concluded that, for blockchain ticketing to function seamlessly, all participants need to establish collaboration to lay down an efficient infrastructure for future events.
However, it is expected that the concept of blockchain technology within the event industry will continue to gain popularity as further technological innovations have the potential to upgrade important features such as security, accessibility and transparency. By adopting blockchain technology, event planners can instil trust in their ticketing processes.