Blockchain Technology Makes Buying Concert Tickets Cheaper, And May End Robots Buying In Bulk
NEW YORK (CBSNewYork) -- Summer is stacked with music festivals and tours, which often come with high-priced tickets.
There's always the looming risk of identity fraud and scalpers, but some companies say a newer, cheaper and more secure way of buying tickets is taking off.
Lower Manhattan-based startup Blockparty is a ticketing company that's utilizing something called blockchain. It involves associating a concert ticket with the unique features of your face.
"You just take a picture of yourself, and that will be your password," Blockchain CTO and Co-Founder Rikesh Thapa explained. "Eyebrows, nose, cheekbones."
Every ticket sold for conferences and music festivals has a digital identity, and employees can track when it was created, who it's been sold to and for how much.
"When a user purchases a ticket using their phone, they just scan their fingerprint or their face," said Thapa. "This allows us to verify that the actual user is purchasing the ticket."
Employees say it prevents robots from purchasing tickets in masses and marking up the prices.
The company said it's targeting millennials because they are crypto savvy and price-sensitive.
"So much of it is automated. That allows us to operate with a much lower overhead than traditional competitors, so we're able to keep our ticket fees very low," Blockparty Vice President Vladislav Ginzburg said.
Ticketmaster recently acquired a blockchain technology company called Upgraded, which it says will help prevent fraudulent ticketing.
A group of former senior StubHub employees launched a company called Tracer. It's already the norm for Holland-based ticketing company Guts.
"We connect these tickets to mobile phone numbers," said Sander Regtuit, of Guts. "If people want to put their tickets up for sale or they want to resell their tickets, they are able to do so but only within our system."
Guts sells tickets for events across Europe.
"We're in talks with lots of ticketing entities and ticketing companies to get protocol and to integrate what we do with their own systems in their local markets. We're speaking with people in 40 countries -- over 40 countries," Olivier Biggs, of Guts, said.
Guts also recently started accepting virtual money, known as cryptocurrency. Blockparty estimates it now accounts for 10% of sales.
"Using cryptocurrency to pay for a ticket will allow a consumer to avoid having to pay a credit card vendor fees," said Ginzburg.
Similar to dollars, pesos and yen, cryptocurrency comes in thousands of different forms. Bitcoin is the most notable.
"The easiest and most layman way to think of what cryptocurrency is is every transaction has a notary stamp that can't be hacked," explained financial analyst Jason Reddish. "There's exchanges, and you have to open up, literately, like a virtual wallet to place your bitcoins into a wallet."
"It's the internet in the mid-90s, it's the Wild West right now, and as things progress, it'll definitely become more available and lot easier to obtain," he added.
Companies like Microsoft, Subway and Dish Network accept cryptocurrency. Blockparty has created its own cryptocurrency known as Boxx Tocken.
"When an event is sold out to maybe 95% capacity, we can nudge that extra 5% by offering cryptocurrency rewards," said Ginzburg.
The company says it sold around 25,000 tickets last year and wants to expand to the sports arena.
So digital tickets tied to your face and fingerprints could soon be music to promoters' and performers' ears.
While there is a lot of hype around cryptocurrency, financial experts have a few warnings. Anyone who invests in it needs to be prepared to lose every penny, as there is no central bank controlling it, and the market can be volatile.
For instance, the value of Bitcoin in 2014 ranged from $30 to $1,000.
Additionally, cryptocurrency and blockchain technologies are software based, so both are subject to being hacked.