Selling train tickets on Ethereum1.69

Last week I wrote about how NFTs are tokenizing the world, including ticketing and transportation. Today I will look at how this could apply to the often-chaotic British rail system.

Firstly, it's worth understanding the complexities of the UK rail network. The oldest in the world, over 1.7 billion journeys are made per year. This makes the British network the 5th most used in the world, with figures continuing to rise year on year. While Network Rail are responsible for the maintenance of the track itself, there are 24 active rail operators functioning on the railway lines.

Partially as a result of this, the UK rail system suffers from a complex ticketing system which is frequently the target of government and consumer pressure.

One project tackling this issue is Founded by Linus Norton, traintickets aims to allow UK rail retailers to sell tickets through smart contracts on the Ethereum platform. The project, currently functioning as a beta on the Ropsten network, turns purchases into NFTs which contain the collection reference for the ticket. It is also part of, a wider initiative which aims to act as an open marketplace to allow for a single transaction covering multiple forms of transport and operators. As such, consumers could purchase a ticket covering bus and train journey across multiple countries and operators in a single transaction.

An illustration of how buying a ticket could work 

To find out more about the project, we interviewed founder Linus Norton.

Blocktimes: What is the problem you are trying to solve with traintickets and Planar Network? 

Linus Norton: The idea of inter-operable tickets is the foundation for the Planar Network - get all operators using a common ticket standard so that tickets for multiple operators from multiple countries can be sold in a single transaction. This would allow consumers to use that ticket in a number of different apps, so you wouldn't be tied down to using the app of the retailer you bought the ticket from.

This would be better for consumers but would also reduce costs for operators. The operators are generally interested in reducing cost by reducing the role of the accreditation team at Rail Delivery Group [BT note: the accreditation team are responsible for certifying systems that sell or issue tickets to travel on the National Rail network – only accredited systems are able to act as retailers and sell tickets] and reducing the need for expensive industry-specific technology for settlement (a system called LENNON).

The British railway relies on a number of proprietary standards that require equally proprietary hardware which has been developed specifically for the industry at great cost (e.g. ticket printers, gate lines etc). The operators would like to move towards more standardized consumer technology.

Furthermore, the reason a single transaction is difficult at present is largely owing to the problem of reconciliation. The processes of selling, creating and settling (giving each operator their money) are all separate and can all fail independently. We believe that as more of the system moves on to the blockchain it's possible to tie together selling, creating and settling into a single, atomic transaction.

BT: What does a purchased ticket look like at present on traintickets?

LN: At the moment the "ticket" is just a collection reference which lets you collect the ticket from a ticket machine at the station - so the value of having the collection reference available across applications isn't that high. However, there is an emerging standard called e-tickets that makes use of the Apple wallet pkpass standard. The pkpass standard contains the bar code needed to get through gates, so the value of it together with your flight tickets is much higher.

This is already possible with e-tickets because you can just add the pkpass file to your wallet but there is no security backing that - it's just a pkpass file floating around that you have to remember to have on the right device at the right time. Using the NFT to store the pkpass (or a reference to it on IPFS) means you can access it anywhere (and securely).

The retail experience for the customer is unchanged. The customer does not act directly on the blockchain, instead they act through retailers’ websites or apps using traditional means of transferring money such as card payments.

BT: Why are you using NFTs for this? 

LN: The issues outlined above mean that ripping out all the existing infrastructure to work with a new "one true standard" is not an option, so the NFTs and blockchain act as a sort of meta-ticket that supports all of the existing native ticket formats. That can be the backbone of all future travel tickets.

Furthermore, NFTs enable a series of benefits to both consumers and industry.

For one, NFTs are portable. When you purchase a ticket as an NFT the ownership of that ticket is assigned to your address. You can use that ticket in a number of different apps so you wouldn't be tied down to using the app of the retailer you bought the ticket from. As the tickets comply to the ERC-721 standard, it means that can be viewed in most Ethereum wallet apps.

Secondly, the fact that NFTs are unique also provides a benefit to the industry. At the moment all tickets contain nearly but not quite unique numbers (the numbers are re-used over time) so it would be easier to keep track of NFTs for things like refunds and cancellations.

Finally, as they are standard ERC-721 tokens they can also be transferred to other people. This is something you are not currently allowed to do. While this is often not enforced, the operators make a lot of money off charging people to transfer their tickets (or forcing them into a refund).

BT: Will operators and retailers be happy to accept crypto?

LN: We have to be aware that operators have never sold a ticket for anything other than GBP or railway tokens before. However, although many blockchains come with an in-built cryptocurrency, it is not necessary to use that as the basis for transactions. It is quite common to digitally represent fiat currencies to eliminate the risk of fluctuating exchange rates.

For a retailer to start selling tickets they need to have money in the network to execute the smart contract that creates tickets. The retailer can cash-in to the network using an exchange to purchase digital versions of fiat currencies. Operators can take the money they accrue through ticket sales and cash-out to their local currency using the exchange.

Using digital representations of fiat money allows us to bind the ticket creation to the financial settlement. Where there are multiple operators with different fiat currencies the Retailer would need to possess the requisite amount of each currency in the network before being able to execute the contract.

BT: How have the transport operators and regulatory bodies responded so far?

LN: I have spoken to operators and they are generally enthusiastic but are aware (as am I) that any wholesale change in the industry will take a long time. This is why I am trying to prove the technology works through a pilot, which will involve a train and bus ticket retailed in a single transaction.

There will be other concerns. Beyond the resale of tickets, retailers are currently also required to collect passenger information such as name and number - which we're trying to avoid. Furthermore, there is a concern about the "openness" of ticket sales when using blockchain. The operators don't like other people knowing how many tickets they've sold.

There are some elements that should remain hidden (the origin and destination of the tickets for instance) as operators compete with each other and don't want to give their competitors information they could use to gain an advantage. However, the desire for other people to not know how many tickets are sold is less well grounded.

I will also be putting through accreditation towards the end of the year - it will be interesting to gauge their formal reaction.

BT: Why have you thus far decided against doing an ICO?

LN: I've thought about funding, but right now there is nothing that more money would help with. Doing an ICO usually involves raising money by introducing a new token, and at present there is no utility for one – we won’t add one just to raise money. Right now the team is just myself full time and a few part-time helpers. I'm working behind the scenes on a multi-modal journey planner to do the UK/Europe bus and rail integration, and also waiting for the Ethereum blockchain to scale or become cheaper to use before I can move more of the ticket issuing on to the blockchain.

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