Much of the audience is aware these days about blockchain, the underlying technology behind the top cryptocurrencies. What might be new to you is that the technology has a bigger potential than just financial transactions.
The financial sector started experimenting with blockchain a while ago, but the automotive industry has just started to embrace the new, revolutionary technology. A standard cruise control function has been evolutionized and turned into self-driving cars, which are not much of a surprise to anyone, these days. The next futuristic development in the auto industry can be about vehicles. The fact that the vehicles will be able to communicate with each other and transmit important data about road conditions and maneuvers that they are going to make is simply exceptional. Vehicles will stop being just a mode of transportation and blockchain will play a vital role in the upcoming technology revolution.
Car Sales and Leasing
A common issue that customers face when buying a second-hand car, is the problem of compromising odometer data. What happens sometimes is that you might purchase a car that has driven much more miles than you think. This is where blockchain plays a key role. Since blockchain data is immutable, you will always be able to compare a seller’s words with the true information stored in the blockchain. In fact, you will be able to check any information about the car: mileage, accidents, repair history, or any other data that will help customers avoid the wrong purchase.
Eliminating Counterfeit Car Parts
It ’s really hard to imagine how big a market of fake car parts is. According to Nissan’s representatives, the car manufacturer loses about $60 million in the Arab Emirates, annually, due to counterfeit car parts.
The world obviously needs a convenient countermeasure. Apart from stealing money from car manufacturers and their official partners, as well as reducing jobs, fake car pieces can also compromise human lives, especially when it comes to airbags.
Blockchain technology is a way out of this situation. The usage of unique radio-frequency identification (RFID) tags, car manufacturers can ensure proof of provenance for their spare auto parts and track the location of a particular car in their supply chain, while all the information about a car will be stored in the public ledger.
Blockchain has significant potential for insurance companies. Both the technology’s immutability principle and proof of provenance concept will help businesses to effectively leverage their operating activities. Let us understand this situation with a scenario. If a car insurer is given some doubtful information, smart contracts can help a company to validate the submission. With the presence of blockchain, insurers would be able to check whether a car needed serious repairs before the accident, which could be caused by a vehicle’s technical issues, or verify any other information provided by the submitter.
The use of blockchain technology in automotive can also provide various benefits for shipping companies. In today’s world, the shipping industry continues to remain complicated because of its tremendous volume of point-to-point communication between transportation providers, freight forwarders, customs brokers, governments, ports, and warehouses. The entire data about shipping a particular cargo is stored in the shipping company’s silos, which makes it unavailable to clients.
Speeding Up Self-Driving Car Development
Though Tesla has started selling its cars with a built-in autopilot function, self-driving cars remain imperfect, or we can say they still need to be developed to perfection. Self-driving vehicles seriously depend on the quality of road markings and the readability of road signs. To accelerate the development of driverless cars, vehicle manufacturers have to collect and process extremely large amounts of data.
Chris Ballinger from the Toyota Research Institute states that, due to the blockchain, autonomous cars will appear on our roads sooner, rather than later. Distributed ledgers and blockchains can allow for the transfer of necessary data between vehicle owners, researchers, and manufacturers. As a result, car manufacturers will be able to collect needed data faster, in order to start producing fully autonomous electric vehicles.
Due to using blockchain in the auto industry, it will be easier for corresponding companies to be compliant with regulatory requirements. With the blockchain, the automotive sector can become more efficient and trustworthy. The technology is highly promising, though not fully mature yet. It prepares vehicles for the upcoming environment where they will interact with each other and with the environment itself, in extremely new ways.