How Blockchain Will Revolutionize Future Cars

Blockchains are changing the way many industries operate internally, but the automotive industry is set to change externally toward consumers as well. Using blockchain to record vehicle maintenance and history, assist with autonomy, and share data are only some of the looming changes for cars and how they can be used for more than only transportation. Learn more about some of the circulating ideas for combining cars and blockchains.

Key Takeaways

• Blockchain technology can be used in many aspects of the automobile industry.
• Manufacturers can use it to verify that approved processes have been followed and parts are of the quality desired.
• Cars can communicate with each other and transmit data to blockchains to increase driver and system awareness of road conditions.
• Blockchain can enhance driver and community safety.

Blockchain and Auto Manufacturing

One of the most glaring issues faced by many industries, including vehicle manufacturing, is supply chain tracking. Vehicle parts are purchased from all over the world and shipped to facilities where they are assembled. While much cheaper for manufacturers and consumers, this creates issues because, at a certain point, there is a loss of transparency. When an automaker receives a part, it only knows what that part maker tells it about it. Documentation can be included, quality testing can be claimed to have been performed (with official stamps and signatures), and everything can appear perfect. However, all of this information can be faked or altered.

Blockchains offer a way for parties involved in manufacturing and shipping car parts and assembling vehicles to ensure that the quality expected at the assembly line is received. Additionally, blockchains can generate consumer confidence in automakers because every part in every vehicle can be reliably traced from its original maker and process to the showroom.

Cars as Part of a City-Wide Nework

Computer systems keep shrinking, which means more systems and software can be loaded into vehicles to enhance their performance and reliability, add amenities, and make them more user-friendly. These systems and connectivity provide an opportunity for information to be shared between cars, which can make driving safer, more convenient, and less stressful.

For example, imagine a busy freeway during rush hour in a large city. Thousands of cars are on the roads, and they all have the ability to send and receive signals from the cars surrounding them. The city they are in has established a network along its roads that collects traffic information from these cars and stores it on a blockchain. All cars automatically connect to the city’s driving network if they are within a certain distance of the city center.

Now, imagine a car is two miles behind another, but there are hundreds in between them. The driver of the first car becomes distracted, crosses the line into another lane, and crashes into another car. The sensors in both cars go off and immediately send a signal to the cars following, which activates built-in automatic slow-down mechanisms and communicates the accident with emergency services and drivers throughout the city.

All data about the cars, road conditions, and drivers can be stored on the city’s blockchain. Determining fault becomes easier, services are dispatched quicker, driver safety is enhanced, and the roads can be cleared much faster.

Car Insurance and Blockchain

Car insurance is one of the headaches and expenses every driver incurs. Thousands of dollars a year are wasted on insurance that is included in packages and not necessary or based on average driver statistics and not applicable to other drivers. Usage-based insurance (UBI) could alleviate much of this overspending. Instead of paying yearly insurance premiums that vary based on estimates, you could select an option to pay based on your actual usage.

A UBI system would require a significant amount of data upfront to ensure accurate quotes and premiums for drivers. After having driven for a certain amount of time and contributed their data to a public insurance blockchain, insurers could recalculate a driver’s premium based on their driving habits. The drivers could simply execute pre-existing smart contracts to automate payments.

Blockchain and Recurring Costs

In terms of vehicle-to-infrastructure, blockchain offers cars a significantly streamlined payment ecosystem that is designed to simplify many aspects of driving.

Blockchain could enable automated payments using smart contracts instead of manually paying for multiple things like tolls, parking, gas, and more. For instance, you could drive through a toll gate without worrying about stopping to pay because the network would ring up a charge and collect it as you pass through it.

Alternatively, you could drive up to a gas pump or charge port, and the system would check your balance to ensure you could pay for the services. You would fill up or charge and then drive off without needing to worry about payment because a smart contract could make the transfer for you.

Blockchain and Vehicle Histories

Vehicles continue to become more expensive, so many people are concerned when making a purchase based on what has transpired regarding a car they are looking at. Maintenance records, accidents, and the number of owners are all concerns when pricing a vehicle. This information is generally available through services like CarFax, but the data presented relies on input from humans or third-party systems—meaning it can be altered.

Blockchains can prevent this important information from being altered, giving prospective owners confidence that the reports they’ve received are accurate. Using blockchain to record and secure vehicle information could save consumers thousands of dollars spent on problematic vehicles and unethical car dealer practices.

Blockchain and Autonomous Vehicles

Autonomous—or driverless—vehicles are still in their infancy, with developers and engineers working to overcome many obstacles. These vehicles will need awareness of conditions, reliable and unchangeable location and route data, the ability to make decisions, and myriad other abilities and functions before they will be safe, widely accepted, and legal for the road.

Blockchain can help vehicle autonomy development because, as previously discussed, it reliably stores data that can be broadcast to and received from drivers and autonomous vehicles. Companies are already working on integrating better vehicle tracking and communication to improve overall connectivity. Creating decentralized networks that more seamlessly transfer data to all points is the first step toward building a safe driverless ecosystem.

What Are the Benefits of Blockchain in the Automotive Industry?

There are many benefits, such as parts tracking and transparency, safety, and reliable vehicle history information.

How to Implement Blockchain in the Automotive Industry?

Implementing blockchain in the automotive industry requires that all participants in the industry—from parts manufacturers to sales and consumers—adopt the technology and participate. Otherwise, the benefits blockchain could bring to the industry will not be realized.

What Is the Future of Blockchain in the Automotive Industry?

It depends on how manufacturers view the technology and how they can market it as an essential or otherwise very beneficial upgrade to the current industry. Many already have some blockchains in place to track inner processes and supply chains, but more widespread uses are still being researched and developed.

The Bottom Line

Blockchain has been flexing its disruptive muscles in several industries, but the automotive sector offers immense potential. By changing smaller aspects of the driving experience and improving the security of drivers on the road through data storage and sharing, the technology could prove a revolutionary catalyst for a much safer experience for all drivers.

Read the original article on Investopedia.