Blockchain in The Automotive Industry: How This Cryptocurrency Darling Is Changing The Game
If you’re not familiar with Bitcoin or other decentralized forms of digital currency, then you may not be entirely certain what “blockchain technology” is. Essentially, a blockchain is an encrypted set of digital records which can only be amended incrementally, making them far more tamper-proof than ordinary files. It’s not difficult to see why this sort of documentation would be ideal in the financial industry, but it’s becoming a popular form of tech in automotive as well, and it’s only bound to make a bigger splash in the years to come.
The Applications for Blockchain Technology in The Automotive Industry
Believe it or not, there are many ways that blockchain can simplify and streamline processes that occur every day in the automotive industry, both on the professional and consumer sides.
Improving Supply Chain Management
The automotive supply chain is infamously complex because there are so many components necessary to create modern vehicles. Through the use of blockchain distributed ledgers, a high degree of transparency can be achieved within even the most bottlenecked supply chains, allowing automakers to cut costs and heighten efficiency.
Preventing Counterfeiting and Hacking
Since every component of a vehicle would have an identification number that was logged within the ledger, it would be virtually impossible to forge a vehicle from an automaker utilizing blockchain technology. Additionally, the advanced encryption would make it next to impossible to hack into autonomous vehicles, so drivers could rest assured that their safety would be maintained at all times.
Simplifying the Transfer of Ownership
If cars are tokenized, they can be transferred securely yet simply, much in the same way as cryptocurrency. This would be possible due to the fact that blockchain technology keeps a highly protected record of ownership that cannot be stolen or forged by one party alone. Utilizing this method for transferring ownership would cut out many of the outdated pain points currently associated with buying or selling a car.
Increasing Security
Although advanced GPS technology is currently a favorite method for businesses tracking fleets’ whereabouts, blockchain consensus capabilities would allow companies to more seamlessly and cost-effectively perform the same task. This also means that stolen cars could become a thing of the past.
Boosting Insurance and Vehicle History Tracking Efficiency
The old saying goes, “one rotten apple spoils the bunch.” By the same logic, a few fraudulent insurance claims raise rates for everyone. Insurance companies often have no way of knowing if a claim is legitimate, which leads to high operational costs. Blockchain technology would allow companies to see precisely when different car components were damaged thanks to sensors, thus mitigating this concern. Similarly, the same technology would improve the efficacy of vehicle history reporting services.
Blockchain is still an incredibly new technology, so it’s hard to know precisely when it will become widely adopted within the automotive industry, but it’s easy to see that the benefits of this innovative type of tech are far-reaching.
