The E-ticketing industry faces numerous issues due to a lack of efficient regulatory mechanisms and market inefficiencies. The sector primarily operates in two different layers – Primary and Secondary markets. While the primary market deals with transferring tickets between Organizers and consumers, the secondary market deals with re-selling tickets purchased in the primary market. The demand is mainly considered inelastic, giving room for fraud and variables beyond the organizer’s control. There are regulations in place to prevent fraud in the secondary market. However, these regulations are only helpful to a certain extent. This paper throws light on a company attempting to solve this problem using a blockchain-based solution. The article also helps understand the company’s rationale behind unconventionally raising funds through an Initial Coin Offering (ICO).
UTIX & Economics
UTIX is an online event hosting and e-ticketing platform that utilizes smart contracts to handle market inefficiencies in the e-ticketing industry, thereby helping the organizers to understand and control the variables which otherwise are beyond the scope. Event organizers can sell tickets through cryptographic signatures stored on a blockchain that cannot be tampered with, removing the need for any exorbitant third-party involvement in the process. UTIX, through its protocol, can lend tokens to event organizers, which can be distributed to consumers when tickets are purchased. A user interface supported by blockchain functionality will help minimize complications and costs and reduce the threat of fraud. Since the entire ticketing process occurs through this platform, event organizers can control a specific set of variables through smart contracts.
How does it work?
- When the event organizer creates an account on the UTIX platform, a secure crypto wallet is created in the background
- After having created the event, several UTIX tokens which is equivalent to the number of tickets to be sold, are transferred to organizer’s wallet
- When a user purchases the ticket on this platform, the UTIX smart contract is invoked, and an equivalent number of tokens are transferred to the user’s pre-registered wallet
- Once registration has ended, all the tokens and all unused tickets from the organizer’s wallet will be transferred back to the reserve fund. The entire process occurs in the backdrop of an integrated blockchain system by providing a transparent, traceable and controlled e-ticketing system.
Why raise capital through Initial Coin Offering (ICO)?
ICO is a unique and new way of raising capital instead of traditional ways like IPO, VC funds, Bank loans etc. Typically, this is a new way of crowdfunding where capital is raised via cryptocurrencies like Bitcoin or Ethereum. Investors are given tokens in exchange for their investment. This is a proven quickest way of raising funds from potential investors (small/big) across the globe. The company utilizes funds to build the product. The ICO way of raising funds opens up to a global investor base with literally limited entry barriers. The ICO is typically kept open for a specific duration of time, and later when the ICO closes, the crypto-assets are listed on an exchange and traded. The time frame between the initial seed round and liquidity is very short, making a case for UTIX to go the ICO way.
The problem statement in the e-ticketing industry is evident. The proposed solution seems to have the potential to significantly reduce, if not completely solve, counterfeiting, market inefficiencies, and fraud in the industry. There are regulatory mechanisms and some blockchain-based solutions in place that have been attempted to solve this problem for quite some time now but could succeed only to a certain extent. The credentials of this company/team are promising, and it is worth taking a look at the detailed solution to get a fair understanding of the potential.
The views expressed above are purely personal, and investors are expected to do their due diligence. If you wish to know more about the company and would like to participate in UTIX ICO, please refer to https://utix.io/