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How is blockchain changing the automobile industry for good?

The automobile industry has come a long way in terms of modern technology and advancement in car designs.

Modern cars are not only optimized to provide superior levels of customer experience and safety, but the environment factor is kept in check as well. All in all, modern automobiles are, in every sense, a marvelous combination of comfort and technology.

If we talk about one thing that is all set to take it to the industry to the next level, it’s ‘blockchain.’

The blockchain technology is a distributed and decentralized digital ledger that allows the information to be recorded and shared within a community.

A 2018 study by IBM revealed that 62 percent of the automobile executives believe that blockchain will be the groundbreaking force in the auto industry by the end of 2021.

Not only that, 54 percent of the auto-pioneers plan on implementing their first commercial blockchain network in the next three years.

Let’s dive deeper and have a closer look at the ways the blockchain is revolutionizing the automobile industry.

Autonomous Automobiles

According to the Toyota Research Institute, self-driving cars will soon become mainstream owing to the influence of blockchain in the automobile industry.

A case in point is the automobile manufacturer Tesla which has already launched cars with auto-pilot features. However, when it comes to these built-in auto-pilot features, there is a lot of room for improvement.

With the help of accurate and secure blockchain technology, automobiles would be able to ramp up the way data is recorded and processed.

A self-driven car, integrated with blockchain, can record and process an enormous amount of real-time data efficiently. It includes detection of the threats, good readability of road signs, and reliable recording of traffic infrastructure.

Extended Vehicle Ledger

This technology is a promising replacement for the physical log books that have been used traditionally for sale and purchases of automobiles.

In particular, the blockchain-based solution securely stores, updates, traces, and shares vehicle data amongst Original Equipment Manufacturers (OEMs) and external parties.

Moreover, customers would be able to make payments via global ledgers when they buy a car. The ledger could additionally include a vehicle’s ownership and maintenance history and allow the OEMs and external parties to access and update the record.

Odometer Authenticity

The odometer tells about the miles an automobile is driven. But are those numbers questionable? Definitely!

According to NHTSA, There are approximately 452,000 registered cases of odometer fraud per year in the United States alone.

When buying automobiles, customers unknowingly run into cases where odometers are tempered. In other words, the displayed number of miles are tweaked to be incoherent with the actual distance covered by the automobile.

Blockchain technology makes use of an in-car connector that sends vehicle mileage data to the digital logbook regularly.

Consequently, the displayed mileage could be verified from the actual logbook employing a smartphone app.

Redefined Insurance

Have you ever been in a mess of making the insurance claims?

If not, consider yourself lucky.

Most of the companies use concealed methods while managing the claims and issuing policies. On the other hand, it is not uncommon for some policyholders to come up with fraudulent requests while claiming the insurances.

All in all, the conventional methods of insurance claims end up in high operational costs and ineffectiveness.

The immutability and proof of source offered by blockchain allow for optimizing this process. It aids in verifying the claims and measures the extent of damage — thanks to transparent data logging of the sensors in availing the telematics services.

As a result, the insurance company would be able to access the driver’s locations, drive duration, braking behavior, vehicle speed, and much more while dealing with a claim.

Smart and Secure Transactions

How does it sound: Each time you charge your electric car, the consumed electricity is measured, and then the corresponding amount of money is automatically deducted from your account?

Sounds cool, right?

Blockchain is one promising way to turn this idea into reality. Not only that, when you park your car in a parking facility, your payments would also be charged automatically.

So, one thing is for sure: blockchain would streamline the transactions, and the payments will become more transparent and efficient.

On top of it, customers would be able to acquire add-ons, such as in-car payments for movies and live-video access to events. Additionally, they would be able to relay their information and connect with others in real-time.

Optimized Supply chain

Here’s how it works: multiple blockchain accounts could be created to manage the data that is monitored and generated by manufacturers and suppliers.

For instance, while one blockchain account deals in bills of lading, the other one could hold quality-inspection records that are created during manufacturing.

Moreover, the release of purchase orders during manufacturing phases could be automated by embedding smart contracts in the manufacturing blockchains.

In short, blockchain can lead to the optimization of a supply chain by involving the smooth integration of digital contacts, pricing, shared inventory, transactions, and logistics details.

Eliminating Counterfeit Spare Parts

In 2017, more than 500,000 counterfeit auto spare parts — of about $4 million worth— were confiscated by officials in Abu Dhabi.

Now, imagine how big the size of the counterfeit auto-parts market would be.

Counterfeit parts can never be taken lightly, given the fact that they can be detrimental to human life. So, what is the antidote?

A blockchain-manufactured automobile puts RFID tags into use.

These unique identity numbers enable manufacturers to validate the authenticity of the spare parts. Not only are the recalls made easier, but entire details about the car are recorded in a public ledger as well.

Car-sharing Feasibility

Blockchain takes the car-sharing facilities a notch higher by creating a safe ecosystem to connect car-sharing providers and end-users.

When users and car-sharing services register on the blockchain, a seamless exchange of data is ensured, with the monetary transactions being duly secured.

The flow of data could include vehicle location, pin codes to unlock the car, agreement terms, and payment details.

Not to mention, blockchain-enabled car-sharing processes the monetary transactions upon the completion of the trips and updates the users’ records.

Final Thoughts

The bottom-line? Blockchain is the future.

The possibilities with a blockchain-integrated automobile industry are limitless. But, one thing is for sure: it only gets better from here.

It is safe to say that in no time, we will get to see the operations in the automobile industry getting more and more streamlined. Subsequently, the users will enjoy an enhanced experience, and the sector will flourish.