As you probably know, the blockchain has a lot of applications in the financial sector. But what is less known is that a lot of applications are in the automotive industry as well. The automotive companies have multiple projects with specialized platforms which are using different types of blockchain design. We have a few examples of blockchain applications in the automotive prepared for you.
Why is the blockchain a good fit for the automotive industry?
It is important to understand that bitcoin glorifies the basic blockchain and makes it very popular as a payment method. Essentially, bitcoin is kind of a digital gold. However, bitcoin’s blockchain isn’t the only possible blockchain design.
Now, there are automotive alliances which are using a peer-to-peer network and distributed algorithm concepts, and these alliances create different types of blockchain designs which cater to different types of industries.
Automotive plays an essential role in many of the new data-driven business models that are being created cross-industry.
Blockchain in carsharing and mobility services
One of the use cases of blockchain in automotive is within mobility services. A wallet in the car can pay for mobility services like parking or charging. These services can be used in carpooling and car sharing too. A user only needs the wallet with allowed access to the car.
Mobility services are a huge area with different use cases. Users can also store their profile, credentials and even personalized settings in the blockchain and so provide helpful information. Immediately, the provider has access to this information about user preferences and activities.
Blockchain in maintenance and production
Digital twin is the concept of having relevant and important information about transactions of a car. The car records are stored in a distributed ledger throughout its lifetime. The process starts during the production of the vehicle and assembly. A producer records every transaction of physical and software parts across the whole supply chain.
Software parts are actually becoming more and more relevant. After the car is sold, the producer keeps track of relevant transactions like maintenance and services. The producer can record the car’s information like ownership changes and vehicle usage. It’s then much faster and easier to find affected vehicles during safety recalls.
Car lease through IBM Blockchain
Imagine a world where every participant in this network could monitor the process where the vehicle is in its lifecycle. Imagine one agreed view of the complete vehicle history and how this would improve service warranty and/or recall costs by providing an agreed shared record of vehicle information as its transferred across the supply chain. Blockchain solutions can deliver just that.
How does it work?
The government regulator creates and populates the registration for the new vehicle which is loaded onto the blockchain. The smart contract ensures that only the regulator can do this. The regulator then transfers ownership of the vehicle to the manufacturer by invoking a transaction on the blockchain. The transaction is then verified to ensure that all relevant parties agree. This is referred to as consensus and the blockchain makes it more efficient than anything.
IBM blockchain allows the validation method to be tailored to meet the needs of the business network. The manufacturer adds the vehicle identification number to the vehicle template as permitted by the smart contract. This update is visible to all members of the supply chain with the right permissions.
For instance, dealerships in the network can see the new stock availability. The vehicle can then be transferred to the dealership on the execution of a smart contract of sale. The transaction is verified to ensure that all relevant parties agree and then the vehicle template on the blockchain is updated for all members of the network with appropriate permissions. After that, the vehicle is transferred to the leasing company where the user can finally lease the car. This synchronized process continues across the supply chain.
The car then passes through its lifecycle from one user to another and eventually to the scrap merchant. Scrap merchant is then governed by the smart contract with the right permissions to dispose of the vehicle at the end of its lifecycle. This information is assured using cryptographic services and all the data is stored in the securely distributed ledger.
Blockchain in car industry brings down the processing costs by reducing the overhead associated with intermediaries.