How blockchain can help tackle ticketing touts
Blockchain

How blockchain can help tackle ticketing touts

Two years ago, Alan Vey was writing his thesis on blockchain, working with the director of the Cryptocurrency Researching and Engineering Centre at Imperial College, when he and Annika Monari – who was herself studying particle physics – decided to try and apply its applications to ticketing.

When Vey and Monari looked into the ticketing industry they identified three key problems: touting, counterfeiting and the expensive re-selling of tickets on the secondary market. Various technological and legislative efforts have been made in the past to try and curb these issues but nothing seemed to be working. And so Aventus was born.

“We decided to research the music industry and really noticed what a big problem there was in ticketing and how well blockchain – and various properties of the Ethereum blockchain – applied to it and could solve it,” Vey tells me over the phone from their London office. “There have been a few big people who have looked at various protocols but nobody had got anywhere near ticketing.”

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Aventus’ blockchain-based platform aims to bring greater transparency to the ticketing life-cycle by improving upon existing solutions and rewarding the identification of fraudulent activity.

“The Aventus protocol tries to give control to event organisers, via ticketing companies, to manage the entire life cycle of the ticket sale,” Monari explains. “That's all the way from the creation through to determining how you want them to be sold in the primary market, what kind of pricing, how many you want to sell, who can even buy them, the seating map, all kinds of things like that.”

Blockchain technology then allows the original distributers to set price controls on the secondary market, eliminating the extortionate and uncontrolled re-selling of tickets to fans who may have missed out on the original sale.  

“What we try and do is give event organisers, ticketing companies, venues and promoters the tools to do this more efficiently and do it better. With this new technology we think we can shrink the amount of technical debt in the industry, the amount of repetition on the back end and the overall inefficiency in the technology.

“With the pricing, you see big companies taking between 15-30% margins on ticket sales, we think that should be a lot lower and with our protocol we can help this to happen.”

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The underlying Aventus protocol is based entirely on the Ethereum blockchain however, the system works using AventCoin (or AVT), a token developed by the team to align the economic incentives of everyone involved with the protocol to minimise fraudulent activity.

“Our cryptocurrency is really for measuring someone's interest via their financial stake in the protocol and allowing them to take a larger control of the decision,” explains Monari. “For example, when it comes eliminating fraud, I could go to Ticketmaster and say Justin Bieber is playing in my back garden. It will then be up to them to internally decide whether or not that's legitimate.”

AVT will need to be purchased to organise and promote events, meaning ticket companies won’t endorse fake events as it will carry a financial penalty.

“AVT is the coin that powers the network. The more financial incentive they have to make the right decisions and make sure that the protocol continues to work.”

Aventus have no intentions of becoming a ticketing company itself. Instead it provides B2B services and software that allows its protocol to be integrated into companies to make the process of selling tickets and promoting live events more efficient.

“We have this standard that we're building and making,” Monari outlines to me. “It's going to be open source so we can go to the ticket companies and say 'look, they're your clients, it's your core business, it's your user interface and branding but we will be that back end, the funding behind your ticketing application that will power it and make it more efficient and we'll do it at a lower cost than anyone else.’

“We’re a software company,” Vey agrees. However, trying to teach those working in what is undeniably a rather traditional industry about the benefits of blockchain is not without its challenges.

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“There's a whole education process,” he explains. “What we do is try to strike a balance, we're not just blockchain idealists in that everything needs to be decentralised. We use the tools where it's appropriate in applications but we've also built traditional software in the areas where that's most appropriate. We show them their system running in parallel on blockchain, we show them the benefits they could have from that and then we slowly do that whole education process and hope that eventually we’ll switch them over. It’s important that from day one we cover everything blockchain or cryptocurrency related so they know what's going on.”

However, while the team is optimistic about their offering – in September they managed to raise 50,000 Ether or $20,000 from their AVT token sale – they’re well aware of the risks involved with working with cryptocurrencies.

The team have had to build a number of tools and mechanisms to combat the potential vulnerabilities of cryptocurrencies and mitigate the risk of private key loss. Vey also comments on the startling lack of regulations relating to blockchain and cryptocurrencies.

“Right now, there's not always enough of an understanding about what it is, which makes it difficult to give guidelines and make laws. However, that regulatory landscape is going to be very important.”

Much like when the government introduced legislation to regulate e-commerce and saw internet shopping explode in popularity, Vey believes we’ll see the same happen with blockchain in the near future.

“We need the regulators, the various jurisdictions to know what it is, implement the correct sort of consumer protection mechanisms that can help back full-scale production.”

And full-scale production is what Aventus hopes to have up and running within the next year. Work on its open source protocol is underway and its already started providing services to a number of clients.

“Obviously having raised this kind of money we've got a decent runway,” Vey tells me “And that means we're now ready to focus on getting people ready to switch over and become educated in the whole blockchain way of doing things.”

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Charlotte Trueman

Charlotte is Staff Writer at IDG Connect

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