Blockchain for tickets - a good idea?

A while ago, I wrote a blog post called “3 Questions for Blockchain BS Detection,” in which I threw some cold water on Blockchain hype and advised people to ask: "where’s the chain?" "where’s the distrust?" and "is there a cryptocurrency I need to trust?" Those questions have helped me determine that a number touted Blockchain applications could be better solved in other ways. Actually, to be honest, I’m yet to find a Blockchain application (apart from Bitcoin) that I can really get behind. Last week I thought perhaps I’d found one: concert tickets. There is a chain: the chain of ownership of a ticket (also known as provenance). There are also trust issues: how do I know the ticket isn’t a counterfeit? How do I know you haven’t sold it to someone else already? And there are startups in the space, like Adventus, BitTicket, and Blocktix.

However, as I step through the key features of a digital ticketing system, the choice of blockchain is not obvious.

Key feature #1: Preventing imposters from selling counterfeit tickets

How can we keep someone from claiming to be, say, Madison Square Garden, and selling fake tickets? The most straightforward way is to simply trust some authority, like Ticketmaster, to make sure a ticket is genuine. If you want a more open technical solution, the event owner could digitally sign the ticket using their public key, and then using public key certificates to confirm that the public key of the event owner really belongs to Madison Square Garden. This happens to be the same solution used to confirm that you are on Madison Square Garden's website and not some imposter’s - a very similar problem.

So, this key feature has nothing to do with blockchain. (Interestingly, I didn’t see much on counterfeiting from the blockchain companies getting into this space. Blocktix even intends to “allow users who notice fake events to report them.”)

Key feature #2: Transferring ownership.

The event owner signs the creation of the ticket. Each time the ticket is sold, the sale is digitally signed by the owner, which anyone can verify using the owner’s key. Now, this is a little chain - a little chain of ownership. But note that you only care about the chain of ownership for the one ticket. All the other tickets with their chains of ownership are irrelevant to you. If you had a copy of a digitally signed ticket in an email attachment, you’d have something you could take to court. No blockchain needed to prove the ticket was really sold to you.

Key feature #3: Preventing double-selling

You could show me a ticket's chain of ownership, and I could verify that indeed each owner had signed to sell the ticket to the next owner in the chain. But how can I be sure some owner didn’t double sell item? This would be like someone making copies of the title deed to their car and selling the car more than once to unsuspecting parties, complete with signing over a copy of the title deed each time.

To deal with this, we need a register of ownership that we can check; something for tickets just like double-selling of cars is tracked in the American NMVTIS (National Motor Vehicle Title Information System). Ideally, the registration system would only allow the current owner to record the sale of the ticket so that double-selling was actually impossible. Blockchain does indeed fit the bill for this; however, so would a traditional transactional database system, or any number of distributed storage schemes.

Key feature #4: Ensuring the smooth exchange of money and ticket ownership

You wouldn’t want to hand over your ticket and not get any money, nor hand over your money without receiving a ticket. You may recognize the similarity with escrow for a home sale, and computer geeks will see this is a transaction. If you are happy to use a cryptocurrency, then you could adopt something like the smart contracts in Ethereum, which can support simultaneously transferring ownership while transferring some cryptocurrency.

In the world of conventional currency, you would likely involve a third party for escrow. That is, some trusted third party would take the payment, then signal that ownership can be transferred, and then give payment to the seller only after ownership actual transfers. Today someone like Stubhub plays this role, and millions are content to use their service.

Conclusion: Blockchain is sufficient but not necessary.

So, you clearly could use a blockchain for concert tickets. It would work, especially if you were happy to transact using a cryptocurrency. But you also could do without a blockchain.

So, the question is: what problem do you want to solve for people with your new blockchain ticket business? Today, millions trust sites like Ticketmaster or Stubhub for all four key features, and its not at all clear their is a strong incentive to replace them. Reducing their fees may be an objective, which one could accomplish via a more open standards approach, but their fees are modest enough to keep this from being a strong opportunity.

Blocktix and Adventus also have anti-profit motivations. Blocktix wants to “discourage for-profit ticket trading” while Adventus promises to solve the “huge problem” of the“wrong people making too much money” Personally, I don’t really care about this aspect. I’ve paid a premium to attend events I really wanted to see, but I’ve also paid less than the face value of tickets (once I even got to see Michael Jackson on the cheap). Even if you detest this sort of profit-making, event tickets hardly seem a crucial target compared to, say, necessities during a natural disaster, but, hey, whatever floats your boat.

Still, I don’t see anti-profiteering creating a groundswell of support for something new. The best case I can imagine is that venue owners or event promoters decide they would like to take over the fees presently going to the ticketing companies. They could adopt their own open standard for tickets, fix a ticketing fee, and then create an open market for transacting on digital tickets. Its possible … but I doubt it. The fees today are a pretty standard size for commissions and the like. The incentives seem pretty small.

OK, but suppose somehow or other the incentive really was there - what, then? Someone would build a Web API that supports the four key features. Event sponsors would create their tickets using that API, and then various websites and apps could sell and re-sell tickets using the API. It could use blockchain, but would anyone really care? The end-consumer wouldn’t. Nor would the event sponsors, as long as the financials worked for them.

To sum up: I’m not saying Blockchain applications for ticket sales will fail. I am just pointing out that Blockchain is unnecessary, and that the incentives to switch from existing ticketing systems sound weak. I thought I’d found a good example of a blockchain application, but in the end I found it uninspiring.

PS Do you know of a good Blockchain application? Did I miss something in my take on Blockchain concert tickets? If so, drop me a line and let me know. I’d honestly be delighted to find a Blockchain app that I can get behind.