Ever since its inception, the auto industry has been at the forefront of technology innovation. From integrating radio and air condition technologies to fully incorporating software and GPS, a new technology aboard a car is the surest sign it has become mature enough for mass-production and mass-consumption. The Blockchain is no different and even promises to change the entire automotive business in more than one way.
The eventual adoption of the Blockchain in the automotive industry is closely tied to the roll-out of 5G. 5G is the upcoming telecom standard for data transmission, and promises peak data rates of 20 Gbit/s, which is over ten times what current-day 4G is capable of. 5G is suited at handling the typically high speed demands and data sizes that Blockchain projects would need to be successful in the auto industry.
1. A security upgrade to the ‘connected car’
Many cars already have Internet-of-Things (IoT) capabilities. Detractors warn of the safety risks these capabilities entail. But by securing data sent to and from the vehicle with the Blockchain, the car becomes a much harder target for malicious actors – after all, one of the Blockchain’s key features is its advanced cryptography, which was designed with finance in mind. And if it’s safe enough for a critical activity like finance, it is safe enough for cars.
This also has implications for driverless cars, where vehicle to vehicle communication is important. By using a Blockchain ledger to protect the hundreds of car-to-car interactions every day, owners will know all other cars in traffic are held to the same security standards.
2. Better insurance, more just justice
Data that gets added to a Blockchain is immutable. This both lessens chances of insurance fraud on the consumer end as well as insurer malpractice. For instance, during a collision, the car could send all relevant data to an insurance Blockchain, leaving little room for doubt as to the accident’s circumstances and culprits, if any. This information may also be useful for police departments and court hearings and will more likely result in fair trials. The transparency and traceability of Blockchain technology will in turn provide less incentive for perpetrators to flee the scene because they will be caught anyway.
3. To maintain and inspect
Today’s cars are already equipped with software that tells you when it’s time to go in for maintenance or adjust tire tension. Combining IoT with the Blockchain would not only let your car securely time-stamp your maintenance sessions (e.g. to lower your insurance premium because you are known as a responsible driver), it could also include useful information for the car maker straight from the repair depot. This way, recurrent issues with certain car models could be spotted and corrected much earlier.
Similarly, state-mandated vehicle inspections could become less of a time-consuming drudgery and a mere matter of looking up the correct records in the Blockchain that would be part data sent from the car, part maintenance record from the local auto shop.
4. An end to counterfeiting
If a car maker’s supply chain uses the same Blockchain to track assets transparently, chances grow dimmer for counterfeit or unsourced materials to enter the supply chain. It is also a good branding move for manufacturers who claim to source “local” material from local companies to convince customers.
Conversely, more environmentally-minded customers could get a way of tracking the provenance of their cars’ constituent parts by also gaining (perhaps more limited, to protect intellectual property) access to the same distributed ledger of the supply chain.
5. Dude, where’s my car?
These immutable ways of tracking the car and all its parts extend beyond the factory. Car owners or rental companies could find a Blockchain-powered solution to reliably track their vehicles’ whereabouts. This would not just be a good anti-theft measure, but may also help scattered-brained drivers or senior citizens with early onset memory problems.
Even if a car leaves the market and is sent to the scrapyard, reusable parts that have a footprint on a Blockchain platform could continue life there, bringing circular manufacturing loops one step closer to reality. Also, it would simply be neat to see that wheel axles of your car are now used by a custom-built taxi somewhere on the streets of Bangkok.
No one-size fits all approach
Not all car companies are working on all Blockchain innovations at once, though most are working on at least some applications of the technology. For this, they often partner with both big fish like IBM or more nimble start-ups – such as us.
If you work in the automotive sector or for a company whose bread and butter depends on it, then we may be able to help you take your first steps into the Blockchain. We provide all-round advice and also implement Blockchain projects across a wide variety of markets, including automotive. We are based in Belgium, which is one of Europe’s biggest hubs for auto manufacturing, car supply chains and motor reselling, so we have all been born with our hands at a steering wheel, so to speak.
Interested? Don’t be a stranger and send us a message via our contact form – every partnership started with a nice conversation!