I’ve said this before and I’ll say it again; we currently are in a bear market but this does not change the fact how the Blockchain, Cryptocurrencies and the technology behind them, will change the world. As part of my series “Real World Applications of Cryptocurrencies”, I will be discussing how Online Ticketing Systems will be disrupted by the emergence of the blockchain and cryptocurrencies.
Online Ticketing Systems — Guaranteed Entrance Token (GET) Protocol
I’m willing to take a bet that the majority of you reading this post, have at least used an online ticketing system at least once. The online ticketing system market is huge. Just to put things into perspective, here are some numbers from statista (these include cinema, sport and music events and don’t include theater, museums, cabarets, comedy clubs, etc.):
- The market (as detailed above) is estimated to be $33BN with an annual growth rate of 11%.
- ~84M people are expected to attend music events in 2018.
- ~64M people are expected to attend sport events in 2018.
Despite how massive this industry is, there are critical downsides to both, the primary (original tickets issued) and secondary market (tickets re-sold after original purchase). Amongst others:
- Lack of Transparency — This results in hidden additional costs. For example, in addition to the ticket face value, consumers are expected to pay a service charge, order processing fee and occasionally a facility fee; some or all not always visible when purchasing tickets. (primary market)
- Stakeholder Fragmentation & Collusion— Event organizers, promoters, venues and ticketing companies make up the value chain. Due to the amount of parties involved, there is often a fragmentation and lack of transparency. In turn, this often gives rise to collusion which causes a substantial mark-up over the “content creator original ticket price”. (primary market)
- Exorbitant Re-sale Prices — Secondary touts, scalpers and re-sellers purchase original tickets with no intention of attending events but only sell them on. This causes an excessive ticket price inﬂation on the secondary market. Just to give you an idea, according to a Europe Economics study in 2009, between 20–70% of events, have their tickets re-sold, at a mark-up of anywhere between 30–500+%. Governments and even artists themselves are attempting to combat this issue, to little or no avail. (secondary market)
- Ticket Fraud — There is no guarantee that tickets bought from re-sellers are valid or authentic. Fraud is quite prevalent in this space, as many fans are denied event attendance due to their tickets never arriving, being fake or invalid. In just 6 months (between May and October 2017), Britons recorded losses of £1.66M (~$2.22M) from ticket fraud. (secondary market)
- Market Data Loss — Valuable user data (subject to permission) is lost, as eventual event attendees aren’t the original ticket purchasers. (secondary market)
Enter the GET Protocol.
The GET Protocol offers a blockchain-based smart ticketing solution that can be used by ticketing companies and event organizers to completely merge the primary and secondary ticketing market, and thus eliminating scalping. The protocol gives complete control over the sale and trade between ticket holders from the moment the first ticket is sold until the last ticket is scanned. Every ticket is guaranteed unique, which makes ticket fraud impossible.
The GET Protocol is being developed by the GUTS Tickets team. GUTS Tickets is an operational smart ticketing company based in the Netherlands. It has created a protocol to be used by existing (or new) ticketing companies as their back-bone to revolutionize online ticketing systems.
As a matter of fact, GUTS Tickets has trialled the GET Protocol (on the Ethereum Kovan testnet) in recent events, selling 40,000 ‘smart tickets’ successfully (as of June 4th). GUTS Tickets is aiming to launch on the Ethereum mainnet in Q3 and are projecting an additional sale of 160,000 ‘smart tickets’ by the end of 2018 and at least 1 million in 2019; all using the GET Protocol.
How It Works
Purchasing tickets and attending events works as follows:
- Consumers purchase their tickets, using FIAT (i.e. USD, GBP, etc.) via a GET Protocol supported ticketing system; Cryptocurrencies will be supported in the future. These tickets are linked to a verified owner; the verification method is flexible. This eliminates part of ticket fraud, as when tickets are re-sold, ownership is transferred securely and promptly (more on this later).
- As with tickets today, the buyer is issued a ticket with a ‘dynamic’ QR Code which is locked (i.e. can’t be viewed), up until just before an event starts. Once unlocked, the QR Code changes periodically, in order to prevent last minute re-sale.
- In order to eliminate any chance of fraud, the QR Code disappears once it’s scanned.
The GET Protocol also facilitates a secure and fair way of re-selling tickets via a GET Protocol supported ticketing system. Event organizers can decide what discount/mark-up tickets can be re-sold, thus providing them control over the secondary market for protection against exorbitant prices. Additionally, since tickets are linked to one owner, when sold, the ownership of the ticket is promptly and securely transferred to their new owner.
The GET Protocol is in prime position to solve the issues discussed above (and improve upon them), for a variety of stakeholders in the chain, in the following ways (amongst others):
- Better Prices — Consumers can receive fair(er) ticket prices as transactions are be more transparent and cost less, in addition to the fact that event organizers can control the mark-up price on the secondary market.
- More Secure — Tickets are guaranteed to be genuine, as these can’t be forged, duplicated, etc.
- Ease of Re-selling— Ticket holders have a more streamlined and user-friendly way to securely sell their tickets.
For artists & managers:
- Fan Satisfaction —Authentic tickets get sold at a fair price to fans, not re-sellers.
- Brand Image Safety — Prohibit secondary touts, scalpers and re-sellers to sell on tickets on the secondary market at exorbitant prices, tarnishing their brand.
For event organizers:
- Infrastructure Improvements — Since the GET Protocol is scalable, secure and controlled, it brings a host of benefits such as easy re-imbursements, stable selling & distribution of tickets, exceptional uptime, efficient & effective sales and much more.
- Better Data Collection — Since tickets are linked to their owner, better market user data can be collected (subject to permissions).
- Dynamic Pricing — This can optimize attendance and reward customer loyalty.
- Better Experience — A better experience is provided to fans as they are guaranteed entry (no invalid tickets) in addition to having a more efficient validation process.
- Targeted Sales — Venues have the ability to market products (if customers opt-in) before events and sell additional offers directly to consumers.
How are GET Tokens used?
GET is required for the creation and trading of smart tickets. Without GET, event organizers cannot create events or issue smart tickets, nor can they change the state of a contract. Users of the protocol also need GET assigned to their unique user accounts in order to sell their ticket(s), because the GET pays and accounts for all transaction and processing costs incurred on the protocol.
GET tokens are completely transparent to the user; they don’t need to know anything about them (which is great for adoption). Everything is done using FIAT (USD, EUR, GBP, etc.), with GET working in the background. In the future other Cryptocurrencies will be supported for transactions as well (i.e. BTC, ETH, etc.). I will not go into much details on how GET Tokens work, as the token economics is a little bit more complicated. If you are interested in finding more about the GET Token & the technology behind it, you can read their whitepaper, here.
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Disclaimer: All information and data on this blog post is for informational purposes only. My opinions are my own. I do not provide personal investment advice and I am not a qualified licensed investment advisor. I make no representations as to the accuracy, completeness, suitability, or validity, of any information. I will not be liable for any errors, omissions, or any losses, or damages arising from its display or use. All information is provided as is with no warranties and confers no rights.