How can the Automotive industry Benefit from Blockchain Technology?

How can the Automotive industry Benefit from Blockchain Technology?

Terms such as Bitcoin, Litecoin, and Ethereum are no longer unfamiliar ones. The finance & investment world is largely dominated by these cryptocurrencies that help in safe digital transactions for all participating parties.

These cryptocurrencies are widely used in different forms of investments, one such example is the use of an ICO (Initial coin offering) where the investing party chooses to buy a new form of digital tokens seeking a higher return. The question, however, is that while many individuals are familiar with what these altcurrencies are, a few know about the mechanism behind it that makes it so secure and stable.

Blockchain- the digital safety hack

All the cryptocurrencies that are now being traded in the market work on the concept of blockchain technology. In laymen terms, a blockchain works on the same principle as a conventional ledger, the major difference being between its physical and digital existence and that blockchain is a distributed ledger, with no central base or authority. Blockchain has small blocks of data that are cryptographically coded and connected. This helps to ensure complete security and privacy of concerned individuals.

These blocks carry time stamps of when a particular exchange or trade is happening and the transaction data which can be any terms and agreements that are agreed upon between the two parties. Once the data has been entered, it is immediately made permanent, verifiable and cannot be altered. The biggest feature of this technology, as discussed by Chris Berg and Jason Potts in their article, is that it largely diminishes the chances of any third party control on private records as it is decentralized.

All in all, it’s safe to say that blockchain might just have proven Helen Keller’s’ famous quote of security is just an illusion, quite incorrect!

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One distinguishing feature of blockchain is its unlimited application. Not only has the investment world been able to benefit from blockchain technology, but it has also seeped into the automotive industry.

The automotive industry has become quite accessible to its buyers, and this has bought on the adoption of newer technologies. We buy cars today out of necessity or maybe as a luxury, yet buyers face difficulties numerous times here regarding installment payments, leasing formalities, timely deliveries, etc.

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The Autoblock is a company that has, and further seeks to revolutionize the automotive world by implementing blockchain into its system – thus creating an online platform for car buying and selling.

Modernizing and securing this process using innovative mechanisms, the Autoblock has succeeded in transforming the motor industry complete! They have in fact created their very own cryptocurrency specifically for the purpose of car dealings, the AutoCoin to provide visibility and transparency in their operations.

A revolutionary change

Not only the Autoblock, but many companies are now taking on this hot trend of blockchain to function on a daily basis. Even Toyota motors, according to TechCrunch, has partnered with MIT media lab to research blockchain technology seeking to create breakthrough software that makes driving technology more efficient. This shows that the blockchain system is not just a trend that has caught up with the market but is one that is going to stay for a longer time. Suhasini Gadam in one of her article quotes Frost and Sullivan who stated that by the year 2025 it is expected that 10-15% of all vehicle transactions will be on the blockchain. Companies which integrate the blockchain technology into their workspace provide numerous benefits for potential investors some of which are as follows:

  • Vehicle Valuation: Evaluating a vehicle has become more authentic and credible due to the use of blockchain technology. Previously, concerned parties used to evaluate cars with whatever information was available to them which increased the chances of flawed or biased valuation in a scheme to favor the traders. With the help of the blockchain system, operations have become significantly prominent and transparent as there is no centralized control.
  • Multiple modes of transport: Ernst & Young, in 2017 launched a program that served as a new mobility ecosystem seeking to evolve transport services by listing single vehicles to multiple ones on the same platform. These could be of any nature, a pick or drop service, delivery, ride sharing, etc. All requests were digitally entered into the blockchain with all formalities being taken care of by the participating parties using a single source.
  • Authentication of spare parts: Scams and frauds involving spare parts are common in the automotive industry. Such parts fail pretty soon after they buyers begin to use them and cause numerous problems for both the investor and the car dealer. Blockchain integration could be useful by creating distinct codes or names of parts to enable proper identification along with the make and model of that particular part, making it unique and impossible to recreate. A German company, Innogy SE has used this idea and created a digital twin technology using blockchain that has created a digital clone of any automobile part along with its physical form.
  • Digital wallets: The Autoblock also came up with an innovative idea of developing their own cryptocurrency, the AutoCoin, to engage in car deals between two parties. Where they are making significant changes in the market using groundbreaking technology, they are simultaneously opening doors for investors to generate good returns on this new currency. This enables retailers and customers to indulge in online transactions privately and make digital payments.

Contract-based transactions: Blockchain technology allows easy access to information and agreed on terms long after they have been signed so they can be verified, thus enabling the concept of smart contracts. According to the medium corporation, smart contracts are computerized programs that exhibit automatic execution based on predefined terms and agreements without the need for any financial intermediary.

Final word

With all the major industries trying to take advantage of the blockchain technology, it is   obvious that the blockchain system is here to stay. It is going to dramatically restructure the industry with its wide variety of applications majorly implementing security and quality control.  As many top names such as Ford and Toyota are working on projects and softwares that integrate the blockchain system to develop autonomous cars, it is a safe bet that blockchains will be opening up a new chapter for the automotive industry.

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ABOUT Erica Silva

Erica Silva is a blogger who loves to discover and explore the world around her. She writes on everything from marketing to technology. She enjoys sharing her discoveries and experiences with readers and believes her blogs can make the world a better place.

Find her on Twitter: @ericadsilva1

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