What is NFT Ticketing and How Does it Work?

Paper tickets have been used to gain access to music concerts, sports events, and other social events for years. Typically, event planners adopt a ticketing system where paper tickets are sold before the event. People gain access to these events by presenting these paper-based tickets.

However, more recently, digital tickets have been adopted by more event organizers. Digital tickets began to be issued in the form of barcodes and QR codes because of the susceptibility of paper-based tickets to being faked, ruined, or even lost. Digital ticketing solved this problem but still could not meet the demands of event organizers and customers regarding efficiency, uniqueness, and security.

Then came a more stellar solution - Non-fungible tokens. Since NFTs are unique, they solve the problem of forgery, enabling ticketing efficiency, uniqueness, and security.

What is an NFT Ticket?

An NFT ticket is a digital ticket created and stored on a blockchain network. Like traditional tickets, NFT tickets offer the ticket holder the credentials to access a particular event, experience, or service. However, NFT tickets cannot be altered, faked, or duplicated. In other words, they are unique, and there can only be one official ticket owner with exclusive rights.

NFT ticketing offers a revolutionary method of event ticketing, providing an open, secure, dynamic, and efficient way of managing and issuing tickets for live or virtual events using blockchain technology and NFTs. NFT ticketing allows event planners to offer customization and streamline the ticketing process, thereby saving time and resources. For example, NFT tickets may be issued for different event sections, like VIP or regular admission tickets. NFT tickets may also be used to provide seat numbers and access to exclusive content.

Event planners can keep a comprehensive record of tickets produced using the blockchain as a ledger. Also, because NFT ticketing uses blockchain technology, it gives a ticket holder unique ownership of an event or experience. NFT ticketers can also use NFTs to expand their product offering and customer base and build communities and fan engagement.

How does NFT Ticketing Work?

NFT ticketing offers ticket holders the opportunity to be part of the events they attend. Once the event organizers mint the desired quantity of NFT tickets on their preferred blockchain network, they are sold to interested customers digitally. The price of the NFT tickets may be determined by setting a code in the NFT to a set or fixed sale price or by running an auction where buyers can bid for the tickets.

Buyers purchase NFT tickets directly from the ticketing company, irrespective of the method used to buy the tickets. Once the buyer pays, a smart contract automates the execution of the transaction, and the NFT ticket is sent to the buyer. Then, the buyer stores the NFT tickets in secure wallets on any device, which can be accessed at any time.

NFT tickets are created and stored in a requested NFT marketplace. If ticket owners want to resell their NFT tickets, they can do so on the NFT marketplace. Once a new buyer pays for the NFT ticket, the smart contract that stores the ticket triggers and sends the NFT ticket to the new buyer and payment to the seller.

Here’s a step-by-step process that highlights how NFT ticketing works:

• Ticket Creation: The event organizer mints NFT tickets on the preferred blockchain network and minting platform with specific details such as seat number, event date, venue, and time.
• Smart Contracts: Smart contracts ensure the validity and security of NFT tickets with terms of sale embedded in them. NFT ticketing primarily uses the Ethereum blockchain and other smart contract-enabled blockchain platforms to mint NFT tickets.
• Ticket Sale: NFT tickets are sold through online marketplaces that support NFTs. When a buyer purchases an NFT ticket, the buyer becomes the asset owner and is granted unique access to the event.
• Ticket Transfer and Resale: NFT tickets can be securely and transparently transferred from one wallet to another. Organizers may also set rules that ensure that they earn royalties from ticket resales.
• Ticket Redemption: To access an event, attendees can present their NFT tickets to event organizers for verification. The event organizers can verify the ticket’s authenticity by checking the proof of ownership stored on the blockchain.

Benefits of NFT Ticketing

NFT ticketing benefits all participants, including event organizers, attendees, and artists. These are some benefits of adopting NFT ticketing:

Prevents Fake Tickets and Fraud

NFT tickets are stored on the blockchain, making them secure and allowing event organizers and guests to verify their validity and ownership history. If a ticketing company forbids ticket resales, NFT tickets can be created as non-transferable and cannot be resold to another buyer. These possibilities make it impossible for NFT tickets to be falsified, abused, or used for fraud.

In situations where event organizers have set limits for the prices of NFT tickets, it is also impossible for resellers to inflate NFT ticket prices in the secondary market, thereby protecting buyers from being extorted.

Reduces Costs and Fosters Quick Production

The cost of minting and selling NFT tickets can be potentially lower than that of producing and selling traditional tickets because of the absence of printing numerous paper tickets.

Also, issuing and distributing NFT tickets is faster than distributing physical tickets. Event organizers can mint and distribute NFT tickets in a shorter time frame than it takes to produce physical tickets.

Continuous Revenue Opportunities

The blockchain-enabled nature of NFT tickets makes it possible for participants to earn revenue continuously. For example, suppose NFT tickets have been programmed to remit a certain percentage of their sale to the issuer. In that case, it allows event organizers and artists to earn revenue. Even long after an event has ended, anytime a ticket holder resells an NFT ticket in the secondary marketplace, a percentage of the sales go to the artist or the event organizers.

Continuous revenue generation is possible because NFT tickets do not become useless after an event. NFT tickets can be resold as collectibles and may be used to reward buyers who have gathered many event tickets. For example, the tickets may be used to provide deals for food and drink.

Reduces Damage and Loss of Tickets

Paper tickets may be easily misplaced and damaged. There are low risks of losing or damaging NFT tickets, making it a preferable option to traditional paper ticket systems.

Risks of Using NFT Ticketing Systems

Although NFT ticketing offers revolutionary advantages, it also comes with certain risks. Some key risks associated with NFT ticketing systems are;

Market Volatility

NFT tickets, like other NFTs, can be influenced by market demands, leading to potential value fluctuations even before the events occur. Before an event is scheduled to be held, the value of an NFT ticket may fall, and ticket owners may incur losses, especially for those wanting to resell their tickets.

Counterfeiting and Scams

While NFTs are difficult to counterfeit, scammers may create fake NFT tickets to defraud unsuspecting customers. These customers may purchase the fraudulent tickets and will, in turn, be denied entry to events.

Lack of Regulation

There is no regulatory body that monitors the use and handling of NFTs. Therefore, when customers perform transactions using NFT tickets, no regulation protects them against risks in terms of disputes, fraud, or other issues related to NFT tickets

Complexities and Lack of Infrastructure

Users unfamiliar with the blockchain ecosystem and how NFTs work may find buying, selling, or handling NFT tickets challenging. NFTs are still a relatively new concept, and it has not yet been widely adopted in the industry. The process of NFT ticketing can be complicated for some users to grasp because the available infrastructure is not fully developed for NFT ticketing.

Technical Problems and Blockchain Vulnerabilities

The blockchain ecosystem sometimes experiences outages and delays, which can affect NFT ticketing transactions. Event organizers often cannot prevent these outages, and delays in issuing tickets are inevitable during these periods.

Blockchains are not also immune to hacking attempts. If a blockchain platform used for NFT ticketing suffers from a security breach, it could compromise the authenticity of tickets and data associated with the tickets.

The Future of NFT Ticketing

NFT ticketing has numerous use cases but is yet to be widely known globally. For example, although the music industry is beginning to have use cases for NFTs, most music enthusiasts are unfamiliar with the NFT ecosystem. Most music fans do not have NFT wallets. Without an NFT wallet, they can not store NFT tickets.

Event organizers can use blockchain technology’s Proof of Attendance Protocol (POAP) to garner interest among music enthusiasts. By rewarding users with NFT badges for attending events, they can encourage the adoption of NFT ticketing. POAPs give users the ability to create commemorative NFT badges. Event organizers can reward users for attending events by white-listing NFT ticket holders for future airdrops, and the badges can be used to gain utility as status symbols.

Additionally, we may expect more ticketing companies to embrace NFT ticketing. Event organizers may also strike strategic partnerships with established ticketing companies. Ticketmaster enables event organizers to sell their NFT tickets on the NFT marketplace on websites, apps, and fan support centers available in about 29 countries. These tickets issued on Ticketmaster are still solely owned by the event organizers, that is, the artists and sports teams, etc. Ticketmaster also eliminates the use of ticket bots by fans to purchase tickets illegally and protects fans from being a victim of ticketing fraud from ticket resales.

Technological advancements in the blockchain ecosystem may make NFT ticketing even safer, more efficient, and more transparent. Smart contracts are already being used to improve the ticketing experience and can be further utilized to provide more efficient ticketing automation. Smart contract automation reduces fraud cases to the barest minimum and provides more secure proof of ownership. Also, decentralized marketplaces may be improved to provide better adaptability and fairness in distributing and selling NFT tickets.

Conclusion

NFT ticketing is growing fast, and most companies and individuals are constantly looking to benefit from its opportunities. NFT ticketing not only offers a better method of ticketing in terms of security, efficiency, and transparency, but it also provides a rewarding experience for event organizers and customers.

NFT ticketing offers a secure, efficient, and transparent experience, and both ticketing companies and customers should be aware of its potential benefits and risks while keeping an eye on emerging technologies in the NFT space.