Called the OUR Music Festival, or OMF, the inaugural edition will take place on October 20 in San Francisco's Civic Center Plaza with a lineup to include electronic artist Zedd.

Organizers said that the festival would be the first to operate on blockchain, the system that moves chunks of data securely through an online ledger. Blockchain has been put to growing uses from medical records to banking and most prominently as the tool behind crytocurrency Bitcoin.

For the festival, fans will use a mobile app and see all ticket purchases on an open ledger, which the promoters hope will completely eliminate the resale market that artists and venues have struggled to tame.

"The way ticketing works now, it is just sort of accepted by everyone and there are obvious problems from scalping to counterfeiting to fraud to insane fees," said Justin Blau, a financier turned DJ with the stage-name 3LAU who conceptualized the festival.

"The reason why these systems haven't been changed is that up until now there really hasn't been a better way," he said.

"You won't have Craigslist selling paper tickets to Coachella anymore once ticketing is on the blockchain," he said.

Blau, who will also perform at OUR Music Festival, said that blockchain will open up a new field of incentives as fans will earn cryptocurrency for everything from early ticket purchases to encouraging friends to come.

Fans can spend the cryptocurrency on perks such as VIP upgrades, food and drink. Blau sees the specialized currency much like airline miles, with frequent customers obtaining elite status.

Blau believes that blockchain can ultimately rebalance the relationship between audience and promoters with fans, led by those holding more cryptocurrency, creating their own lineups.

"Right now it's one or two people sitting behind a desk saying this is the artist who's going to make us the most money in this place. But they don't even ask the fans. It's very inefficient," Blau said.

Acknowledging that hucksters have been drawn to blockchain, Blau said that the festival was determined to run smoothly by starting small and gradually fine-tuning.

He said tickets for the inaugural OMF would start at around $19, highly economical for a US festival.

Blau, who is working with festival promoter Prime Social Group and blockchain entertainment studio SingularDTV, hopes to bring OMF in the next two years to Japan and Barcelona.