‘It’s Just A Better System’: Q’s With Shiv Madan, CEO Of Blockchain Ticketing Company Blockparty

Ticketfly and Ticketmaster both recently suffered from hack attacks that left their user’s data exposed. A blockchain based ticketing system could prevent these kind of attacks from happening.

Pollstar spoke to Shiv Madan, CEO of New Jersey based blockchain ticketing company Blockparty to find out exactly how – and to talk about other issues blockchain may help solve.
Shiv Madan
– Shiv Madan
The CEO of Blockparty explaining the benefits of blockchain based ticketing

How can blockchain help with protecting private data?
With blockchain, there’s a decentralized nature to the storage and management of information. With Ticketmaster or Ticketfly or any other centralized organization, the data is usually stored in one or a small number of databases. It’s not always easy to hack an organization, but there’s a whole community of hackers out there looking for a way in, and if you find one entry point, it’s usually easy to get in. 
With a decentralized set of databases it becomes difficult to hack the entire system, because you have to attack every single node in the system. The beauty of blockchain is that it becomes very difficult to overtake a system, or to shut it down. You may break one node, but you’re not going to break the system.
With Ticketfly, it seemed pretty easy for a hacker to get in an capture 27-odd million sets of user information. It’s concerning to say the least, especially once Ticketmaster introduces facial recognition technology, which they announced recently.
If you can access or steal someone’s face it’s very different from stealing someone’s password. If you steal a password, you can change your password, but once you’ve stolen a face it’s gone forever.
How can blockchain deal with some of the current issues in ticketing? Let’s start with the transparency issue that starts on the primary market, where fans have no idea about how many tickets are actually available.
With a blockchain system you’re essentially having visibility on every single ticket that has been issued, and you have full transparency as to where that ticket’s going in both primary and secondary. And with smart contracts you can actually have control over those systems as well [by] setting certain guidelines as to how many tickets can be sold in each round.
If, for example, there was a first headline announcement for a festival, and you knew there were only supposed to be 1,000 tickets on sale during that period, you can see those 1,000 tickets. And you’ll know that if the event organizer has set a cap on the pricing in the smart contract, you know that it should never go above a certain price, even if it’s sold in the secondary market.
It gives the consumer a lot of confidence, number one, and, number two, it makes the [ticket buying] experience better if you’re not feeling like you’re being ripped off.
You can see how many tickets are allocated to fan clubs and other people who do get access to discounted or group tickets. It’s a much more transparent system, without giving up user identity, which is the beauty of it.
What if you want to host a private event, and not make the number of available tickets transparent?
It’s really in the hand of the event organizer, particularly with a system like Blockparty. You will see on the main map how many tickets are available, but whether or not they’ve been issued is in the hand of the event organizer. We do want to enable event organizers to succeed, and if it means not sharing, that’s at their discretion.
As the blockchain system develops with Blockparty, if an event organizer is notoriously not sharing any information, and there still seems to be price hikes and things like that, it may affect their reputation in the system, and that would certainly steer people away from events. It’s really community driven.

– Blockparty
The app ties any given user’s unique ID, the hash, to the ticket’s QR code

How is a ticket transferred on blockchain, how is the old ticket made invalid?

If you log into the Blockparty app with your touch ID or your facial recognition scan, that data is encrypted in a Hash, let’s call it a digital key, and then that particular digital key is associated with the QR code of the ticket.
Say, you can’t make the concert and transfer the ticket to George, the digital key is [removed from your ticket] and associated with George’s ticket, when he logs into the app and the transfer [becomes effective]. You de-attach and reattach the digital identity from a ticket.
On the blockchain, you can see how many times a ticket has been transferred, which digital key it’s been transferred from and to, and the price at which each transfer’s happened. You know who the final person getting into the gate is, because when they check in, they are going to have to use that touch ID or facial recognition scan to access the ticket.
That solves the gate fraud, the scalper issue, a lot of issues.
Other ticketing companies have announced to start using facial recognition. What do you do differently?
We’re the only ones encrypting that data and associating it with the ticket. The encryption and de-cetralization of that data means that your face and fingerprint is safe from hackers, but you’re still getting the benefit of the ownership and transferability of the ticket.
What can you do with smart contracts?
We can track your performance as a promoter, we can distribute the revenues from those ticket sales in real time, and if anyone you sell to sells on to someone else, we can track that too, It really makes the promotion of tickets very efficient. There are lots of groups out there selling tickets, promoters, brokers, etc. It just makes the process infinitely more efficient, if you can track it.
What challenges with blockchain still need to be overcome as far as ticketing is concerned? In the beginning, blockchain couldn’t handle the amount of transactions that are made during the general onsale especially of larger tours. 
That is definitely one, but it depends on how you handle it. We have on-chain and off-chain transactions, so we try to mitigate the speed challenges at the gate and with the initial purchases through that mechanism.
We also set sale periods, which mitigates the amount of people, who are actually able to buy a ticket within a minute. And that’s also to stop bots. 
Through our system, we’re unlikely to have bots, but we also want to have a fool-proof mechanism to stop anyone hacking our system and trying to buy more tickets.
Other challenges?
It really comes down to explaining the value proposition. There’s a lot of people, who think, ‘it’s blockchain, I’ll have to buy my ticket with Bitcoin. I don’ have Bitcoin, therefore I won’t go to this concert.’ That’s probably the main hurdle, explaining that through our system you can purchase with US dollars, we provide crypto currency rewards and then you can use those rewards eventually to buy future tickets. That’s our mechanism, to grow the marketplace rather than forcing everyone to buy with crypto currency. 
In terms of the system itself, we believe that it’s just a better system. Aside from the speed challenges, which you alluded to earlier, I think there’s not a lot that isn’t at least better than the current system.
The other thing is that, on site, you need to be able to manage low connectivity to the internet, and that’s a challenge for everyone, whether it’s blockchain or not. Depending on whether it’s a camping festival vs. a Lollapalooza in the middle of the city, there’s going to be different scenarios, and we would have to solve those challenges in the same way that any other ticketing company would.
Now that we know what the technology can do, how does Blockparty fit into the whole ticketing ecosystem? 
We want to be available to larger companies, or other ticketing companies as a modular system, so you can pick and choose what’s important to you. Usually it’s better to take the entire system, because once you have that digital key, you’re able to use it for primary and secondary ticketing and [transactions] once you’re inside the event. But we can also just provide a secondary market solution, for instance, because it’s a modular system.
We certainly want to be a friend to ticketing companies and event operators. We are also doing end-to-end ticketing for a number of events, more of which we will announce of the coming weeks, so we still have our core business, where Blockparty is the ticketing provider in primary markets and eventually secondary markets as well.

– Blockparty
The app’s events screen

Any other aspect of your business we haven’t touched upon yet, you would like to add?

Aside from general ticketing, what we really want to do with crypto currency, is incentivize demand in a way that ticketing companies really can’t do. 
Right now, you have an integration with social media or email blasts to try and get people to come to concerts. And not all concerts sell out, as you guys know very well. There’s lots of concerts and festivals that are not profitable.
With the crypto currency we have this mechanism by which to create demand incetivization programs. For example, bring five friends and get your ticket for free, or artist meet and greets. We can quantify those [programs] and the event promoter can create taylored programs within our protocol that incentivize people to turn up.
What we really want to be able to do is not just to solve ticketing, but also to fill stadiums. And that’s what we really want to integrate with the Live Nations and AEGs of the world, because we feel that that’s going to help them more than just solving operating costs and operating issues like ticketing.
Can you elaborate on the incentivization programs? How exactly does blockchain open up new ways of getting people to buy tickets?
Right now, there’s very few ways in which an event promoter can incentivize demand other than spending a ton of money on media to create brand awareness, or having discounted ticket programs, things like that. And, obviously, the new integrations that are happening now, like Eventbrite and Instagram, those things are really creating product and event awareness, but they’re not really incentivizing people to come out and buy that ticket.
With crypto currency you are able to give people a benefit for participation. If you’re air-dopping tokens, you can end up with 50,000 followers within weeks, and have just massive sets of user coming from around the world, because you’re [rewarding them for participating].
Imagine there’s an artist playing on stage two at four p.m. What if we were able to geo-fence anyone who was in the event, who had attended that particular artist’s performance. So, if you go into the geo-fenced area, why can’t we reward someone with a crypto currency, why can’t the artist create a program that would reward [the fans] with crypto currency. Part of the artist’s fee could be allocated towards incetivizing people to actually turn up and watch the artist perform.
Not only that, but maybe, rather than giving them a crypto currency, you could associate that crypto currency with a purchase of a digital download, so anyone who turns up to watch the artist play at four p.m. could end up with a digital download of a brand new unreleased track, in partnership with, say, Atlantic Records.
That’s just one example of how you could boost an artist’s engagement with fans, really have better understanding of how a fan is interacting with the artist, and also generate long-term in the artist’s future. I think those sorts of programs are really not done. And it’s much easier to do with crypto, because you can track the identity, you can push rewards, you can associate the crypto currency with a particular type of reward, and it’s just seamless within the system.