How bitcoin could secure your meeting
For many people blockchain is that thing they still haven’t quite got their head around. In fact they are more likely to have heard of Bitcoin, the cryptocurrency – a form of digital money – it is based upon. And yet, as Corbin Ball explains, Blockchain, and its bolt-on Ethereum, have great potential for fraud-proof, interactive e-ticketing for events.
What is blockchain?
Blockchain is a means of managing electronic cash without a central administrator. Based on the crypto-currency Bitcoin, it uses a distributed database. This means than no central entity such as a government or bank manages the transaction. Instead, the transaction is handled by thousands of volunteer-run computers (nodes). The blockchain is a chain of information including the transaction information with a timestamp that cannot be altered once it is recorded.
How does blockchain work?
These are the basic steps:
- Someone requests a transaction (for example, to buy a ticket to an event).
- The requested transaction is represented online as a ‘block.” This block is broadcast to these thousands of independent computer nodes, each with a copy of the entire blockchain database.
- This network of nodes validates and approve the block using an advanced series of algorithms.
- This verified information, the new ‘block’ is added to the existing chain in a way that is timestamped, permanent and unalterable
- The transaction is then complete and the money moves from person A to person B. Often this will be in the form of a barcode/QR code on a mobile app.
What is Ethereum?
An additional open-source technology, Ethereum, adds to blockchain capabilities to create smart contracts, which allows specifying conditions under which a person will be paid, such as management of issuing tickets, recording the transactions,verifying authenticity, enabling resale/exchange of tickets and under what conditions.
It can limit the number of sales to one customer. There are even capabilities of hiding ticket barcodes before the event or while the user is away from the event venue. The smart contracts can allow for reward-based event promotions and event community building. For example, a reward system can be built in to reward users who invite friends.
What are the benefits for events?
In the near-term, the major use for meetings will be for large sporting and music events where scalping and ticket fraud is common. Here are some of the direct benefits:
- Elimination of ticket duplication and counterfeit tickets: Blockchain and Ethereum are counterfeit-proof, highly secure methods of money transaction. Once an amount of Bitcoin is transferred from one address to another, it cannot be replicated.
- Elimination of scalpers: Ticket-bots and touts can often buy up large blocks of tickets as soon as they go on sale and resold at exorbitant costs. Under systems using blockchain and Ethereum, organizers can set clear rules on dealing with ticket reselling, even setting limits on secondary sales commissions.
- Completely centralized ticket sales: Although the verification nodes are completely decentralized, blockchain/Ethereum ticketing system manages the complete process in a uniform and transparent process. Blockchain technology can create uniform standards of communication among the parties and make the ticket booking process more transparent.
- Uniform resale and refund system: Every event can be governed by a smart contract, such as ticket issuing, payment processing, refunds and resale.
- Potential lower costs: Although this technology will likely be resisted by the 800-pound gorilla ticketing companies such as Ticketmaster, the process is more secure and efficient. As society moves to accept cryptocurrencies (despite the seemingly explosive bubble Bitcoin is experiencing currently), the process can disintermediate ticket sales eventually leading to lower costs
What are the companies offering Blockchain/Ethereum-based ticketing?
As mentioned, these technologies are in their infancy. Here are some of the companies developing these products:
Citizen Ticket: https://www.citizenticket.co.uk/bitticket/
Although these technologies are developing for large, ticketed events, eventually, with the higher security, greater control, and inherently more efficient processes, it is possible that this could be the standard to e-currencies for events and society in general.
Published Date: 18/07/2018