Why NFT Ticketing Never Caught On

KEY TAKEAWAYS

NFTs burst onto the scene in 2021 with sensationalist sales and celebrity endorsements. For a brief period, NFTs were engulfed in a maelstrom of self-perpetuating hype. But their meteoric rise has been followed by an equally dramatic fall, not unlike the dot com bubble in 2000. 

During their brief reign, NFTs took a step into the ticketing market. Originally seen as a more secure alternative to traditional ticketing, NFT tickets were swiftly eclipsed by stronger, more well-suited options. Here, we’ll conduct an autopsy on why NFT ticketing became popular, and ultimately, why it failed.

What Are NFTs?

For the uninitiated, NFTs are unique tokens that represent the ownership of a digital item. The most common type of NFT came in the form of digital artwork collections, with no two pieces exactly alike. Uniqueness played a role in their appeal, with blockchain technology used to assure users that each piece was authentic. The artwork is reminiscent of a portrait – think the scope of the Mona Lisa – and often, though not always, features anthropomorphic animals.

In addition to functioning as a status symbol, they were seen as an investment, with the value of an NFT growing if the collection became more popular. Bored Ape NFTs, for example, were $200 each at the time of their launch. Just a few months later, the floor price was around $200,000. Sotheby’s once sold a Bored Ape for $24 million. 

Unfortunately, many NFTs struggled to demonstrate lasting value or practical use cases. The initial hype often overshadowed the question of long-term utility. But when heavy hitters like Ticketmaster, the NBA and Live Nation began issuing NFT tickets, it seemed to combat the perception of “uselessness,” giving NFTs the practical utility they were sorely lacking. Tickets gave NFTs more intrinsic value than clout alone, which was a step in the right direction.

The Rise of NFT Ticketing

At the peak of their popularity, NFT ticketing came into vogue. When someone purchased such a ticket, they would receive an NFT that proved they were the rightful owner of that ticket, which was stored and managed on the blockchain. Fine in theory, faulty in practice. Market volatility put a swift and decisive damper on this process, along with technical barriers and user experience issues that made it hard to use these tickets. 

NFT ticketing first gained steam in 2018-2019, as blockchain technology became more accessible and mainstream. It became more prominent from 2021 onwards, as more high-profile events and organizations began adopting the technology.

The value of NFT tickets seemed clear. The blockchain ensured traceability, offering a clear and immutable record of ticket ownership and transfers, which was helpful for both organizers and attendees. They were virtually impossible to counterfeit or duplicate, thereby mitigating ticket fraud and scalping issues. 

Unlike traditional tickets, they retained post-event value as digital collectibles or memorabilia. NFT tickets could also be seamlessly integrated into broader Web3 ecosystems, including virtual events, metaverse platforms, and token-gated communities, which further elevated their utility and appeal. They also created new revenue streams for organizers and artists by enabling royalties from secondary market sales, something they couldn’t also achieve with conventional tickets. 

The Shortfalls of NFT Ticketing

Despite its once-promising glow, NFT ticketing faced several challenges that hindered widespread adoption. Technical complexity was a major barrier. Implementing NFT ticketing systems requires substantial expertise and infrastructure, which can be daunting for event organizers and venues.

Not to mention, user experience issues were rampant. Blockchain technology is a mystery to most buyers. Not everyone had a cryptocurrency wallet, which made the purchasing process intimidating and unclear for most.

In addition, the legal framework around NFTs was still evolving in many jurisdictions, leading to uncertainty around how they would be regulated. NFT tickets were also difficult to scale, particularly for large events, where some blockchain networks could struggle to handle high-volume ticket sales. 

The broader NFT market’s volatility affected the perceived value and stability of NFT tickets. Limited consumer and business adoption, coupled with environmental concerns related to energy consumption from certain blockchain networks, also contributed to overall hesitance. 

Surpassed By Better Forms of ID

As the NFT hype faded, any potential they had in the realm of event ticketing withered under the weight of their souring reputation. Nevertheless, NFT ticketing was ultimately eclipsed by superior emerging forms of ID, (think fingerprint scans, retina scans, etc.) one of which was facial authentication. Facial authentication succeeded where NFTs failed for several reasons. It eliminated the need for users to understand blockchain technology and provided a faster entry process than scanning from a digital wallet. 

Facial authentication still functions around a “unique token,” but in a far less complicated way. Using your face to gain access to an event is infinitely simpler than figuring out how to use a crypto wallet. Furthermore, when your ticket “is your face,” you can’t lose it. Plus, it requires zero tech-savviness, increasing accessibility across all age groups. Not even QR codes, which are a functionally simpler ticket alternative to NFTs, can achieve that (QR codes are still confusing to many, especially older demographics). Unlike NFTs, biometric ticketing requires no user device, enabling faster entry. At venues with massive attendance, speed of entry is a factor that cannot be overlooked. Facial authentication also doesn’t have the same heavy environmental impact to consider. There may be a future for NFTs somewhere, but not in spaces where they have been so clearly eclipsed by better technology. 

The Future is Biometric

The failure of NFT ticketing can, to some extent, be attributed to the fact that the future will be very biometrically driven. Little by little, both the physical and digital “tokens” of today, like credit cards, digital wallets and tickets, may be phased out. The human being who uses these items and all the biometric data they carry, will become the built-in tokens used for purchases and ticketing and the like. 

You see glimpses of this future today, where Amazon is prompting Prime users to pay at Whole Foods with their palms, Apple inviting users to unlock their phone with their faces, and Wicket is helping fans enter sports venues with their faces.