NFTs are not dead – they are completely reinventing the industry

The market for non-fungible tokens (NFT) has cooled significantly since it peaked in 2021, when some tokens were sold for millions of dollars. Almost every metric – be it volume, average transaction size, or anything else – shows that the market is still in the grips of a brutal crypto winter, and NFTs are no exception.

While the hype of NFTs with profile pictures and digital collectibles has died down, there is more significant, long-term value in NFTs than one might think. In fact, NFT technology has the potential to transform a handful of industries. One such industry is the ticketing world.

Image source: Getty Images.

Tickets in the 21st century

To really see how NFTs can give the ticketing industry a much-needed makeover, it’s important to know what an NFT is and how they work. An NFT is a tokenized form of an asset that is stored on a blockchain. Tokenized is just a fancy word to describe something bought or sold through a blockchain. Theoretically, real estate, bonds and even commodities could be tokenized. The advantage of this system is that ownership of an asset can always be verified because the blockchain acts as a database that tracks the exchange of value.

What does all this have to do with NFTs? The true potential of NFTs lies in the code behind them. This code, known as smart contracts, can be programmed by the creator of the tokenized asset in an infinite number of ways. Creators can add special criteria to their NFTs that add contingencies for current and future sales – price, royalties to be used if the asset is ever resold, and even the time period the asset is available for sale.

Sound like anything? Maybe the ticket release for your favorite concert or sporting event?

Ticketmaster had the same thought. In August last year, Live Nation (LIE -2.33%) subsidiary cooperated with Flow (FLOW 3.04%) blockchain to allow event organizers to create tickets in the form of NFTs.

Blockchain-based solutions that increase profitability and cut costs

By bringing ticketing to Flow, a whole new world of possibilities is now within reach for Ticketmaster and Live Nation. Because the smart contract code behind NFTs can be customized to serve a variety of functions, event organizers can add special features to the ticket that give fans access to unique events, programs and benefits. For example, an NFT ticket can give the holder access to a meet-and-greet, join a loyalty program or buy more digital collectibles and memorabilia related to the event. The potential is truly limitless.

This new functionality will not only provide a completely new experience for ticket holders, but will also completely revamp Ticketmaster’s business. For decades, the secondary ticket market has been plagued by ticket scalping and a lack of transparency, all of which hurt Ticketmaster’s bottom dollar.

With NFTs, Ticketmaster can close loose ends in the ticket market in a number of ways. By moving operations to a blockchain, Ticketmaster could eliminate the programmed bots that all too often buy bulk orders and resell the tickets at a higher value. In addition, Ticketmaster can also track tickets when they are resold on the secondary market.

Because all transaction data is stored on the blockchain, Ticketmaster could see and better analyze trends in ticket sales, such as how many times a ticket was resold, the price it was resold at, and more. In the current form of the market, this is simply not possible, as ticket holders can sell their tickets in a number of different ways and on different platforms outside of Ticketmaster’s control.

The flexibility, utility and openness of NFTs show that the technology has much more potential than profile pictures and digital art. The underlying technology could revolutionize a number of industries such as supply chain management, video games and even real estate. At the moment, however, Ticketmaster seems to be at the forefront of harnessing the potential of NFTs. One day soon, you might just want to attend your favorite concert or watch your favorite sports team with a ticket in the form of an NFT.