The auto industry is undergoing an electric revolution and to connect the vehicles of the future to the smart-renewable economy, blockchain and cryptocurrency will play an increasingly pivotal role from autonomous car payments to supply chain management.
One of the biggest challenges faced by the automotive, as well as many other industries, are the risks involved in the collection, sending and receiving of important data. This becomes even more concerning as major governments introduce new rules for the security involved in holding data.
For example, businesses in Europe found in breach of the new laws surrounding GDPR could face fines up to €20 million, or 4 percent of annual global turnover – whichever is higher. These sorts of fines could be truly debilitating for most businesses.
Among the most exciting prospects of the adoption of blockchain is the high level of security that it offers. By breaking up data, decentralizing its storage, encrypting and offering a high level of validation it becomes significantly more difficult (if not impossible) to alter that data without the correction permissions to do so. This, in turn, will allow car manufacturers to collect and act on data securely.
ZF is developing Car eWallet, a blockchain-based concept that will turn vehicles into business entities on their own. By connecting vehicles directly with services and infrastructure, it will facilitate the payment for services such as parking, tolls and even drive through take out.
Apart from being practical in multiple day-to-day tasks, this technology may be helpful in today’s auto industry by providing the advancements necessary to make self-driving vehicles a reality. For example, automated payments would facilitate autonomous cars in self-paying for parking. Automated payments are likely to become a necessity as autonomous vehicles become commonplace on our roads, allowing the car to make secure payments without the need for an operator.
Supply chain management
Another major benefit of blockchain in the automotive industry is its application to supply chain management.
For example, in 2016 Toyota Financial Services joined forces with the R3 CEV Consortium, with the long term goal to leverage blockchain technology for automotive supply chain management and connected car systems.
Genesis of Things are an organisation that are focusing on implementing blockchain technologies throughout 3D printing in manufacturing, a combination of technologies which will likely have great impact on the automotive industry in coming years.
Blockchain is also set to change the auotmotive insurance industry. Going forward, insurance claims for original parts replacements are likely to use smart contracts or private keys as a way to quickly and smoothly file the process, deploy technicians and automate insurance payouts.
For consumers, the technology may mean the development of hyper-personalised insurance quotes based on the data they choose to share with insurance companies. This will result in a fairer insurance market, where people pay based on the quality of their driving, not on estimates given their circumstances.
Due to the increased need for security on data transfer, blockchain will allow vehicle leasing companies to better and more safely track the movements and mileage of the vehicles they are leasing.
This will be achieved by using Dealer Management Systems (DMS) which are hosted on blockchain platforms. Doing this ensures secured communication of driver data, which means they can be more accurately tracked.
This technology could also be employed on a government level, allowing much more transparency in the second-hand car market. As data related to a vehicle’s lifespan could be securely collected and stored, prospective buyers will be able to access an unprecedented level of verified information on the car they are looking to purchase.
Dubai’s Roads and Transport Authority are already considering trialling a system along these lines.
The automotive space is one of the fastest developing areas utilizing blockchain technology. Autonomous vehicles will only be achievable if secure data transfers and high level connection between them are possible. Blockchain offers the solutions needed to make this a reality.
Giles Kirkland is a dedicated automotive expert with a passion for the newest technologies. He enthusiastically tests the latest automotive innovations, is keen on reading about futuristic solutions and sharing his knowledge on all things cars, from car finance to the sustainable future of vehicles. You can find his articles on Twitter and at Oponeo.