Though a number of novel technological breakthroughs have been witnessed globally over the course of the past decade, none have had an impact quite like blockchain. For example, in recent years, the idea behind decentralized ledgers has gained widespread mainstream momentum across a number of different industries — ranging from healthcare, vehicle supply chain management, to telecommunications.
In particular, the use of blockchain technology has increased quite substantially within the automotive sector. In this regard, as per a study published by IBM, a whopping 62% of all the high profile executives operating within this space claimed that by the end of 2021, blockchain will serve as a major disruptive force across the global automotive landscape.
Not only that, the study also showed that more than 50% of all firms working in this field are actively looking to devise their very own commercial blockchain networks so as to streamline their internal work processes.
The numbers don’t lie
As per a recent study, the global automotive motors market is set to grow at a compound annual growth rate (CAGR) of 4.8% over the course of the next four years. In this vein, through the use of blockchain based smart contracts and IoT, a large number of processes related to the manufacturing, sales and insurance of automobiles can be streamlined to a large degree.
For example, by making use of a decentralized ledger, car dealerships can automate a large number of their internal transactions — such as maintenance of car sales figures, service data, warranty claim processing, etc — thereby maximizing their profits as well as helping in the elimination of various intermediaries, middlemen from the equation.
In terms of why blockchain adoption makes sense for the automotive industry, not just from a technological standpoint but also from a financial aspect, a study has shown that the size of blockchain market is expected to grow from $3.0 billion in 2020 to around $40.0 billion — at a CAGR of 67.3% — by 2025.
If that wasn’t enough, it should be noted that the total market capitalization of the crypto industry has also increased nearly three times over since the start of the year, rising from $770 billion to $2.3 trillion within a span of just 5 months. This data is pertinent to mention here since blockchain technology lies at the very heart of many of these digital currencies whose value seems to be rising rapidly.
Blockchain can rewrite the auto-industry rulebook
From a strictly definition-based standpoint, ‘blockchain’ can be thought of as being an immutable ledger that provides users with a fully auditable history of all the transactions that have taken place on a particular platform — all while providing users with a high level of data transparency.
The technology, when used within the context of an automotive ecosystem, can help transform the industry in a number of different ways. Some of them include:
Improved emission and data tracking
By recording vehicle usage on a blockchain, any reductions in emissions can be verified, quantified, and associated directly with individual vehicles and drivers. This data can be directly linked with a vehicle’s UID and can be used to record and store all of a vehicle’s activities that can have an impact — both positive as well as negative — on the environment with the touch of a button.
In this regard, there are already solutions in the market that can help achieve this. For example, UNA is a blockchain ecosystem that is capable of seamlessly recording large amounts of vehicular data on a decentralized ledger — throughout a product’s life-cycle — thereby allowing users to maintain a detailed record of their total environmental impact.
Not only that, it can also record the individual preferences of various drivers, thereby allowing them to switch vehicles without losing their settings or preferences. Simply put, UNA helps ease out a number of pain points that are traditionally associated with the renting/test driving process. Not only that, it also allows companies to study the desires of their consumers over time — thereby allowing them to better meet the clients’ needs.
Seamless ownership validation and enhanced security
One of the most important advantages of using a blockchain platform — especially within the context of a vehicular management system — is that it allows for the seamless recording of ownership details, essentially allowing vehicles to reject any unauthorized drivers. On a more technical note, blockchain-driven systems allow cars to maintain user profiles, even allowing them to compare data related to an active driver to a list of authorized drivers, as determined by the ownership listed on the ledger.
Furthemore, the above stated features can be tweaked as per one’s needs and unique preferences. For example, instead of taking away usage rights entirely from third party drivers, the system can instead be used to prevent individuals from partaking in specific actions once inside a vehicle — such as opening the glove compartment, using the music player, etc.
Supply chain streamlining
By making use of a blockchain system, the entire history of a vehicle — from the time its parts are purchased to the time it is fully assembled — can be mapped out quite efficiently with the touch of a button. Also, by employing such a system, it is possible for owners to know the supply chain history of each individual component that may be present in their vehicle, making it easier for them to keep track of any warranty related issues.
One of the biggest advantages of using blockchain-based ledgers when it comes to vehicle management is that they allow for the seamless transfer of ownership of one’s car between various individuals — since every small detail related to a vehicle’s life cycle can be accounted for quite easily using such a setup.
Lastly, by keeping a tamper-proof log of various records related to car service, wear and tear of spare parts, etc, manufacturers can gauge the estimated resale value of a vehicle much more easily and accurately.
With the blockchain industry growing at an unfathomable rate, it stands to reason that as we head into the future, the mainstream adoption of decentralized ledgers will continue to increase, especially within fledgling industries such as the automobile sector, manufacturing, etc.
Not only that, in the months and years ahead, we may continue to see unique applications of blockchain tech — such as the distribution of crypto tokens as rewards for customer loyalty or establishing provenance of a vehicle — being adopted across the global automotive landscape. Therefore, it remains to be seen what the future holds for the industry as a whole and whether blockchain and automotive tech really are a match made in heaven.