Ex-Alibaba Executive Predicts NFT Ticketing Will Advantage Fans Over Scalpers

NFT sales have encountered a challenging beginning in 2023; however, the foundational technology continues to possess significant utility. Ticketing represents an intriguing yet underexplored aspect of the NFT sector. It emerges as a promising avenue for NFTs in the continuously advancing realm of digital innovation.

As a prominent use case for NFTs, NFT tickets play a crucial role in denoting ownership and enabling access to exclusive events and experiences. These digital tickets act as concrete evidence of entry, encompassing a broad range of events, such as theme park attractions, sporting competitions, and live performances.

By offering verifiable proof of ownership and authenticity, NFT tickets have the potential to transform digital verification and improve the user experience.

NFT Tickets vs Traditional Tickets

The emergence of NFTs and their integration into ticketing systems has generated interest and discussions among various industries and stakeholders.

Former Alibaba executive Toby Rush noted that brands and events have increasingly incorporated NFTs into their ticketing frameworks, yielding beneficial outcomes for both consumers and organizations over the past few years. This trend is gaining momentum, engaging a diverse array of stakeholders in what is being recognized as an innovative and mutually advantageous environment.

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In a conversation with CryptoPotato, Rush pointed out that the traditional ticketing sector has been burdened by numerous issues for decades, ranging from scalpers defrauding genuine fans out of substantial sums for Super Bowl tickets to fraudsters selling counterfeit tickets at the recent 2023 NBA finals. The incidence of physical ticket fraud is also escalating at a concerning rate. Rush is confident that NFT ticketing can provide solutions to these challenges.

“Given that NFTs are verifiably unique and their authenticity can be easily validated on-chain, counterfeiting them in the conventional sense is simply unfeasible. Regarding scalping, while profit-driven individuals may sell NFT tickets on secondary markets at inflated prices, these tokens can also be programmed to incur fees or royalties.

This allows organizers to receive a portion of every secondary sale, unlike traditional ticketing, where scalpers are the sole beneficiaries of resales.”

NFT Tickets Not Designed as Speculative Asset

NFTs are subject to volatility. There is always a chance of a significant decline in an NFT ticket’s value just prior to the event. However, Rush clarifies that NFT-based tickets are not intended to function as speculative assets and are governed not by the market but by the event organizers themselves.

“Thus, it is essential to distinguish between NFTs as speculative assets – where an NFT is linked to a speculatively valued piece of art, for instance – and NFTs utilized as a digital representation of goods.

In the context of ticketing, NFTs can serve as proof of provenance for cryptographically verifiable access to specific events, so they do not inherently possess value unless associated with something of worth.”

The executive further mentioned that the only scenario in which NFT ticket prices could vary independently is in secondary markets, where a seller might impose a price ceiling on one, for example.

This would enable the smart contract to prevent that NFT ticket from being resold at a higher price, thus discouraging ticket scalping and “ensuring that the most deserving fans can access affordable tickets, even if they are being resold on the secondary market.”

Addressing Bottlenecks and Steering Clear of Scams

NFT tickets remain an underdog but face several bottlenecks that require resolution. Limited accessibility poses a significant barrier to their adoption due to their highly technical nature. Elevated gas fees related to buying and selling are another concern. However, both of these challenges can be addressed on a technical level, Rush stated.

The former Alibaba executive noted that scams involving NFT-based tickets are quite rare. One such scam involves creating similarly named “lookalike” tokens and attempting to sell them as the “real thing.”

Rush added that it is relatively simple to avoid this type of fraud by verifying the issuer of the tokens in question. Additionally, it is advisable to steer clear of smaller or suspicious marketplaces as an extra precaution. He also urged individuals to always acquire NFT tickets directly from the issuer.

Rush emphasized the importance of exercising caution in facilitating secure user interactions within this emerging technology. Phishing scams, for example, have been observed in the NFT domain. The executive added,

“Issuers can advise users to refrain from clicking on suspicious links, attachments, or pop-ups and to always verify URL domain names, email addresses, and social media handles to ensure authenticity.”

No Reason for Regulatory Threat

The NFT market may have entered a period of dormancy during the summer, but the post-pandemic upheaval that triggered a surge has led regulators to highlight a range of potential risks that remain significant, including concerns regarding consumer fraud, money laundering, and sanctions evasion.

Rush, who currently serves as the CEO and co-founder of Redeem, believes there should not be any regulatory backlash.

He explained that since NFT tickets “do not possess any intrinsic value on their own but instead act as proof of ownership for other physical commodities, such as access rights, they cannot be classified as financial assets, so there is no justification for financial regulators to intervene or oppose them.”

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