How can Blockchain add value to the automotive industry?
By Evie Harrison
Blockchain has proven itself to be the break that the virtual world was looking for. It’s a decentralized technology that underpins cryptocurrency and holds the potential to revolutionize the world economy.
The tech has been around since the launch of Bitcoins. Initially, there was little attention paid to it as Bitcoins were the center of focus for the public. And exponential gains in this new assets category overshadowed the driving force behind it.
With time, things began to change. The public started to realize that Blockchain can transform many other sectors. From healthcare to investing, voting, and even automobile dealings, it had the power to bring massive changes in transaction methods. According to Don Tapscott, co-founder and Executive Director at Blockchain Research Institute, Blockchain is an incorruptible digital ledger of economic transactions that does not only record financial transactions but virtually everything valuable for people.
How does the Blockchain work?
By this time, you might have a rough idea that Blockchain is different from conventional financial dealings.
It is a distributed ledger with growing transaction records known as blocks. There are no banks or other intermediaries in the middle. So the community has to document, share, and manage the information.
These blocks contain digital information such as participants’ database and exchange details. There is a fixed code for each block that makes it stand out. Moreover, there is an encrypted version of blocks on the device of all participants. Every transaction they make must receive approval of all participants. Such distributed networking results in full transparency between everyone involved.
For further information, read Blockchain and Bitcoin Technologies You Should Know.
Blockchain meets the automotive industry
The automotive industry has always embraced tech advancements. Manufacturers across the world are struggling to keep up with the changing trends.
Many companies in this sector have started to realize the potential of Blockchain to add value to their business. They endorse the fact that if they do not adopt right now, they will miss the opportunity.
According to a survey, 95% of the automotive manufacturers plan to make “moderate to significant” investments in this technology. Its capacity for a safe and verified digital transaction in real-time is bound to bring exceptional benefits. These include cost-efficiency, safety, and convenience for the drivers as well as fast operations.
Another latest study by Simon-Kucher and Partners reveals that blockchain-oriented applications in the global automobile segment will soon reach an annual monetization capacity of 104 billion euros by 2030.
Given the numbers, it is apt to state that distributed ledger technology will completely flip the current trends in the automotive sector. To give you further insight, here are a few ways how Blockchain will reshape the automobile sector:
The number of autonomous vehicles and devices communicating with each other is increasing rapidly.
It is the need of the hour to save these interactions on a secure and highly enhanced database. The sharing of vehicle profiles with its manufacturers, part suppliers, dealers, insurance providers, and service mechanics helps them to sense the needs of the car.
For example, the car can notify the driver about the need to replace some parts. He/she can then pick an appropriate service provider and make an appointment for repairs. The French auto manufacturer Renault has recently introduced a brilliant example of these interactions. Its digitized car maintenance program shares the ledger to record all maintenance history of the vehicle in a single file.
Apart from establishing a connection with the external entities, Blockchain also enables the cars to connect. This point can fall into the category of automotive interactions.
Vehicles can discover each other via a peer-to-peer protocol that doesn’t ask for a central server. They can then share information regarding street congestion. Only recently, Toyota has prepared an effective peer-to-peer and data sharing software for its specific models. It’s a car and ride-sharing portal that enables individual auto owners to lease their vehicles for a limited term.
Connected cars can bring about exciting changes in driving behaviors. Experts estimate that by the year 2020, 250 million cars on the roads will work on inter-connected technology. Also, users can pay through blockchain to drive on the traffic-free zone. It seems like the public is ready to pay for the services that allow them to have a better drive on the road.
Data integrity plays a critical role in the modern economic ecosystem. Problems can arise when there is an error during manual data entry and management.
Implementation of Blockchain will help to streamline these procedures. It will allow individuals and dealerships to maintain an accurate record of a vehicle’s history and exchange details.
Cryptocoins like Ethereum, Litecoins, and Bitcoins are immensely popular in the present times. They allow for digital payments in the automotive sector. Whether you plan to sell a car or buy one, you can use digital tokens to pay for it.
This opens up vast avenues for car lovers. They can practically purchase any car from across the globe. But they need to check first if other parties are dealing in digital currencies.
mart contracts are little programs integrated with blockchains. They automate the exchange of valuable things, as per the values defined initially. They enable us to have a conclusive verification with no intermediaries.
They are based on blockchain, and they can help an autonomous vehicle to carry out a two-way communication. For instance, smart contracts can help the autonomous vehicle to set up transactions like battery recharge prices. Some new trends tag along with the smart contracts.
Their development has made it possible for Innogy SE to introduce charging stations with blockchain technology. They have placed hundreds of these charging stations for electric cars across Germany operated by their e-mobility startup Share&Charge.
Blockchain has opened up new doors for the automotive sector. At present, the industry is only utilizing a handful of its uses. There is so much more that can tag along if automotive entities keep exploring. They only key is to dive in and experiment with plausible findings. There is so much more to look ahead in this technology.
Thereupon, Blockchain is about to bring a new wave in the automotive sector. Do you agree? Drop your comments!
Evie Harrison is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. Find her on Twitter:@iamevieharrison