Is the blockchain industry changing the automotive industry? What you should know.
December 6, 2018
Blockchain technology. There was a time when the term was met with skepticism. People were hesitant of accepting the technology. Those days are long gone. Now, the blockchain technology is predicted to reach 2.3 billion USD by 2021. The market value of the industry in 2017 was 709 million USD.
One sector that is being disrupted from the blockchain industry is the automotive sector. Some might even say that the blockchain industry is transforming the automotive industry for the better. The fact that the sector is already growing, with predicted global sales of 81.5 million units in 2018 alone, the blockchain industry seems to be the icing on the cake.
Here is what you must know about blockchain and automotive industry.
The future is today
While there was a time when people merely talked about what would happen when blockchain would be introduced to the automobile sector, now is the time it is actually occurring. Here are some examples of it in the industry.
When we buy cars today (or sell them), we can complete the transaction through cryptocurrency. This is what the AutoBlock offers to its customers. Moreover, it also delivers a p2p platform that makes use of blockchain technology to deliver an effective and unbiased vehicle system. What does it all mean for the auto sector? Well, it is changing the way we conduct transactions. The dependence on fiat currency, and hence financial intermediaries, is decreasing. Online selling and buying of cars are now gaining credibility like never before.
There is a lot that Porsche prides itself for. One of the things is the fact that it is among the first companies in the automobile sector that has managed to test and implement blockchain into the system. Recently, the collaborated with XAIN (a start-up based in Berlin), to test the use of blockchain applications in vehicles directly. For instance, the car could be locked and unlocked via the decentralized network rather than through a key. This means you could give access to your car temporarily to someone else when the need is without giving them the keys. This makes it easy to give access to dropping parcels etc. Moreover, the app can also lock/unlock the car door in merely 1.6 seconds, making it safer than before. Since all the data and control is secured by the blockchain network, it is less exposed to security threats.
CarVertical is a startup that wishes to use blockchain technology to enhance the transparency of car history. There is a lot of data that exists about every car. Between registers held by the manufacturers to the databases of insurance companies, car histories are scattered across parties and are not owned by the owner. To make sure that no one has control over the data and it is publicly available to the masses, CarVertical is developing a blockchain based solution whereby every data about the car can be logged onto the blockchain network. No one, whether it be the insurance company or the owner, can manipulate the data to their benefit.
The potential for the future
These are just some of the ways blockchain technology is being implemented and is transforming the auto industry. However, there is a potential to do a lot more. Here are ways via which the sector can further benefit from blockchain in the future.
Authentication of parts
When we buy cars or sell them off to dealers, seldom can anyone know whether each auto part is authentic or not. This is because there is a lot of ambiguity in the value chain of auto manufacturing. This is why the industry loses a lot of money due to phony auto parts each year.
Blockchain can easily solve this issue. It can do so by assigning a unique ID to each part produced. This ID can be fed into the network along with all the data related to it (including the source of origin and timestamp). Merely searching for the ID can allow you to trace the background of the part, and thereby authenticate it.
Autonomous cars are slowly gaining momentum as well. These cars can benefit from a blockchain based solution as well. How so? Well, these cars can access data about different routes (whether it weather conditions or traffic) and decide which route to take accordingly. Each self-driven car would be logged onto the same system and hence deliver information about routes. This will lead to the gathering or insightful data which can then benefit all in the form of shorter routes than before. Toyota has recently paired up with MediaLab and is trying to build such a blockchain system that can help its car reach destinations in the shortest amount of time.
The automotive sector is linked to the auto insurance industry. If we play our cards right, the masses can get better auto insurance deals via the help of blockchain technology. The premium you are charged depends heavily on your driving skills and car history. However, neither can be adequately gauged since current systems are quite biased. A blockchain solution can be used to track mileage, history about repairs and accidents and driving speed of a given vehicle. This data can then be analyzed to offer a customized auto insurance package to customers.
One thing is for sure; blockchain has already started to transform the automotive industry. The chances are each of the opportunities we have mentioned will be realized in the future too. However, whether the opportunities would genuinely result in advantages for the masses depends on how well they are implemented. We can only speculate if this would happen.
For now, all we can do is buckle up and get ready for the ride. The automotive sector is being disrupted as we speak. As a player in the automotive sector, you can either get on board with it or miss out.
About the Author
Audrey Throne is a mother of a 3-year old and a professional blogger by choice. Throne is passionate about lifestyle, business, automotive, technology and management and blogs frequently on these topics.
Find her on Twitter: @audrey_throne.