BitTicket uses Blockchain to Combat Ticket Fraud

The Problem:

In 2017, the City of London Police National Fraud Intelligence Bureau discovered that over the last three years more than $22 million dollars has been lost to ticket fraud.

Outside the scope of actual fraud, but still related to ticket sales, reseller ticket websites earn huge profit margins by buying hundreds of tickets and marking their prices up to as much as eight times face value. For example, a recent Ed Sheeran concert made headlines with one seller attempting to sell tickets for £174,000 for a pair of tickets.

Meanwhile, in the United States, just last week San Francisco based Ticketfly was hacked and 27 million accounts were exposed; and Fyre Festival founder Billy McFarland was arrested for selling fake tickets to Coachella and Met Gala, netting him well over $100,000 dollars.

A simple Google search reveals countless examples of ticket fraud, including fake playoff tickets and fake tickets to major concerts and events. Numerous warnings about ticket fraud can be found on the Internet advising consumers to tread carefully when buying tickets from unknown sources.

Still, consumers continue to purchase fraudulent tickets – making ticket fraud an ongoing economic issue that needs to be addressed globally.


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BitTicket: An Early Example of Fighting Ticket Fraud Using Blockchain

BitTicket’s vision is to create more integrity in the ticketing industry as a whole and the company’s executives have strategized with industry experts on future directions and a roadmap for the business.

BitTicket, a blockchain service run by Citizen Ticket, a UK-based event and ticketing website, has emerged as an early leader in preventing ticketing fraud, with the first successfully deployed blockchain ticketing platform. The company runs its blockchain offering through Citizen Ticket – but its overall goal is to expand its use through other major ticketing services globally such as Worldwide Ticketing and TicketMaster.

Running BitTicket on Citizen Ticket has proved successful for selling tickets securely for small and medium sized events. As demonstrated through stress testing in research lab as well as tests at real events in the UK, BitTicket has proven that blockchain, the secure transaction technology, can be used to securely sell tickets to all sorts of events. In fact, in a discussion with BitTicket’s cofounder Phillip Shaw-Stewart, and CTO Colin Palmer, the BitTicket platform will be used at an upcoming 30,000 person event, the largest event ever handled by BitTicket. BitTicket’s proven proof-of-concept, plus its unique business model that uses partnerships with big name ticketing services across the world to distribute tickets, marks a significant change in the way tickets will be sold – a change that is good for BitTicket and good for the consumer.

Shaw-Stewart observed “With our blockchain implementation, BitTicket, we are out there contacting other companies and having conversations with them about installing our technology so they can protect their customers as well as themselves.” By providing a secure blockchain platform BitTicket looks to prevent the activities of pesky scalpers, ticketing bots, and most importantly, it looks to prevent counterfeit ticket sales.

How Does the Service Work?

BitTicket technology features a wallet through smart phones and online browsers. Because of the underlying blockchain technology. This means the entire ticket and its journey will be captured in one place from any ticket provider. Identity profiling is used to forestall ticket-touts (a person who buys tickets for an event and resells them at a much higher price) and ticket bots (computerized bulk-ticket buyers). The BitTicket blockchain platform creates more visibility into transactions, exposing fraudulent and unfair ticketing practices, so customers can be confident that they are buying a real ticket at a fair price, rather than counterfeit and/or overpriced tickets.

How does it work? It uses Etheruem Classic, a public, open source blockchain platform featuring smart contract functionality. It also uses Turing, a complete virtual machine.

BitTicket version 1 utilized the Ethereum Classic blockchain. Due to a number of issues (latency, and its link to a cyptocurrency), this blockchain was unfit for the event ticketing industry, because of its inability to deliver immediate tickets. Shaw-Stewart says “they could take anywhere between 3 mins and 30 mins to arrive in our customers basket after purchase.” Instead, BitTicket created their own blockchain based upon the Ethereum Virtual Machine, which is dedicated to tickets, is linked to no cyptocurrency, and is able to deliver immediate tickets.

For smart contracts, every ticket sale is publicly verifiable on the blockchain. The platform verifies the value of the ticket, a feature unmatched by private databases and paper systems. Also, with built in anti-fraud sales rules, BitTicket ensures that no secondary websites can grab the majority of tickets and charge inflated prices. BitTicket has created a safe, secure, and fair environment for ticket sales using blockchain technology. All and all, if these parameters or set of “rules” is not adhered to, fraudulent accounts are frozen and related ticket sales are made invalid.

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Overall, BitTicket has already come a long way from the first event hosted on their platform, The Scottish Street Food Awards in May 2017. With an upcoming 30,000 person event, blockchain technology enables BitTicket to grow and change an industry that has, become increasingly corrupt.

Shaw-Stewart wrapped up by saying “we hope that the launch of BitTicket will usher in a new era of ethical event tickets where both fan and artist are protected from the unethical practices of ticket touts and secondary ticket websites.”

It will be interesting to see when big name ticketing companies start to see the value in blockchain for their industry. Just this month there were warnings all over the internet regarding ticketing scandals run online through Craigslist and other knock off ticket websites, and also scalpers during the NHL and NBA playoffs.

Ticket fraud is an issue that affects millions of people across the world who want to buy tickets to see a favorite sports team or performer. Consumers searching for tickets are very vulnerable, with pressures from family or friends to get tickets to an upcoming event quickly. Sometimes in those rushed decisions and the mad dash to get tickets to an event that is expected to sell out, they take chances that they wouldn’t necessarily take otherwise. That is where the fraudsters capitalize on consumer vulnerability. Scalpers have been a century’s long problem, but platforms like BitTicket utilize technology that will enable fans to finally fight back. Hopefully the industry will soon be in a position, using blockchain, to say goodbye to the heartbreak of fake tickets, overpriced tickets, and finally, those uncomfortable confrontations with scalpers.




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