Blockchain and NFT's
In the spirit of furthering Sina’s commitment to educating ourselves and our Community about the promise of up and coming technologies, here is a short overview of this trending topic and why we believe Blockchain and NFT’s are here to stay, and how these technologies provide some non-obvious but extraordinary power we believe will improve our world in the years to come.
Let’s start by taking a look at something referred to as NFTs (Non-Fungible Tokens); a great innovation, not because of its application in such areas as buying and trading virtual assets like digital artwork and baseball cards, but because of how this technology will likely be applied in the real world and used in many common transactions. One compelling example is in the area of ticket sales.
A company like Ticketmaster currently issues billions of dollars worth of tickets each year. While they strive to price their tickets to maximize profits, the fact is, tickets are often re-sold on the secondary market for more than the initial sale price such that Ticketmaster gets no benefits from these resales. Enter blockchain, whereby Ticketmaster can issue each ticket as an NFT in the form of a so-called smart contract. With this change, each time the Ticket (NFT) is transferred (re-sold), Ticketmaster can benefit from a portion of said resale price by means of a deposit into its originating digital wallet. Under this plan, Ticketmaster would not only share in resale profits but would also be privy to such valuable information as the price of any resale and number of resales per ticket.
One can see the enormous potential from this example alone. It is estimated that in 2019 Ticketmaster sold ~$4 Billion worth of tickets in North America, with a rough conservative estimate of another $600M of value created on the resale market. Were Ticketmaster to apply the power of NFTs and thereby benefit from an assumed 15% resale value, it could increase its North American revenue by ~$100M annually just from resales. That doesn’t include the additional value of the data collected about resales, transfers, pricing, and more.
In addition, Ticketmaster could improve its clients’ experience by reducing its main source of fraud. A common scalper scheme is to buy one ticket to a popular concert only to re-sell that same ticket to ten people for a 50% upcharge. Think of the hapless would-be ticket holder who had no idea the ticket was useless until they presented it at the event, only to find out it had already been honored by another, invalidating their own use.
As the chart above indicates, until now this technology was not economically feasible using Bitcoin or Ethereum due to their extremely high energy consumption (Gas Prices), and slow speed of transaction. But innovations from Solana and many other companies now allow the use of blockchain technology for many day-to-day uses outlined above without the extraordinary energy consumption or drawback of turtle-like speed.
The Barcode revolutionized many aspects of our economy, including inventory control and retail sales. Now imagine the application of blockchain technology throughout the commercial world, and we can begin to see the enormous potential and power of these technologies in driving efficiencies throughout the global economy.
At City Club, we look forward to exploring all kinds of new technological advancements including blockchain and its more practical applications, smart medicine, artificial intelligence, and many others. We plan to host periodic discussions around these topics in the year ahead so we can all work together to adopt and take advantage of these new technologies. Stay tuned.
– Dustin.