Revolutionizing the Automotive Industry: Unlocking the Power of Blockchain
Tags: blockchain, automotive
Published: 2023-10-10 15:16:16

## Article Title: Industry Voices: What can Blockchain do for the Automotive Industry?

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<p>*Opinion piece by Jonas Lundqvist, CEO at Haidrun.*</p>

<p>Ask people about blockchain and most will associate it with Bitcoin, cryptocurrencies, and data mining. However, blockchain has far-reaching applications in various industries, including the automotive industry. It can be used to protect real-time, on-board data, facilitate explainable AI systems, and provide trust in complex supply chains. Major brands like Ford and BMW have already implemented blockchain in their manufacturing processes.</p>

<p>So, what exactly is blockchain? It is a digital transaction ledger that creates a list of records called blocks, which are sealed and linked using cryptography. The blockchain is a distributed database that records transactions between multiple parties in a permanent and verifiable way. The data is stored in blocks across multiple computers, ensuring tamper resistance and alerting all users if any retroactive alteration is attempted. Although blockchain was initially associated with managing cryptocurrencies, its fundamental concept enables it to manage any transaction digitally.</p>

<p>For many automotive manufacturers, public blockchains with open access to the database content are not desirable. Consequently, a new generation of private blockchains is emerging, where a single authority retains control and proper authentication is necessary to access the network. Private blockchains offer similar distributed benefits while ensuring improved privacy and eliminating illicit activities associated with public blockchains and cryptocurrencies.</p>

<p>Private blockchains are "permissioned" networks where participants are known and trusted, providing transparency through audits, checks, and balances. With fewer nodes required, decisions and transactions can be processed at a higher rate, consuming less processing power and energy. The automotive industry has always been open to adopting new technologies, and private blockchain, in particular, is expected to shape and influence the industry over the next five years.</p>

<p>Supply chain fraud affects organizations in all industries and can occur at any step in the process. One growing challenge is the corruption of supply chain data, including manipulation of provenance data, item quantity, and payments information, as well as the introduction of counterfeit goods. Blockchain distributed ledgers provide the trust and transparency necessary to ensure transparent and immutable transactions throughout the supply chain, making it nearly impossible to introduce counterfeit components. Blockchain can also be combined with other technologies like IoT and AI to manage the vast amounts of data generated by automotive manufacturers. For example, blockchains can encompass vehicle component bills of lading, store quality-inspection records, and track Work in Progress data for each assembly line.</p>

<p>In manufacturing blockchains, smart contracts can automate and document legally relevant events and actions. For instance, these contracts can automatically release sales orders at specific stages of the production process and grant contracts to providers with the most inventory to protect supply chains.</p>

<p>A blockchain-based system that stores the complete history of a vehicle can ensure the authenticity of records during the resale process. This allows users to verify a vehicle's history and share relevant information with third parties like insurance companies and repairers. Furthermore, blockchain technology has the potential to revolutionize vehicle ownership transfer, with a tokenized platform that ensures provenance and ownership rights in the automotive market.</p>

<p>Blockchain smart contracts could enable car owners to pay for the electricity needed to power their rechargeable vehicles. By triggering a contract on the blockchain for charging their car, the required amount of money can be withdrawn from the owner's bank and delivered to the charging station. Likewise, blockchain can enhance secure payments for monthly parking fees, insurance, and other automotive-related financial activities.</p>

<p>Blockchain can also be utilized to track the details of self-driving car journeys, including road and facility details, weather conditions, and traffic information. Cars in the network can access this data, benefiting from its accuracy and safety. The cryptographically protected nature of blockchain ensures that only authorized parties can view the data, preventing unauthorized access and potential hacking attempts.</p>

<p>Blockchain combined with autonomous technology has the potential to revolutionize ride-hailing services like Lyft and Uber. By removing intermediaries and improving data security, blockchain can facilitate direct interactions between drivers and riders, allowing users to evaluate reputations and select drivers based on market considerations.</p>

<p>Blockchain-based solutions not only simplify sharing trips but also make sharing vehicle ownership more accessible. Instead of owning individual cars, sharing fleets of vehicles could become more common. An application could allow users to request access to a shared vehicle, while the blockchain tracks its activities during use. Payment settlements can be instantly processed based on agreed-upon terms, providing convenience and transparency for everyone involved.</p>

<p>Autonomous vehicles can greatly benefit from blockchain technology, enabling self-driving cars to communicate and share data within a fleet. Blockchain platforms can log information about daily activities, route completion, technical issues, and other relevant details. Smart contracts and IoT can also assist in self-driving cars recharging their batteries at designated stations during downtime.</p>

<p>In addition to facilitating smart contract-based insurance coverage, blockchain streamlines the insurance claim process and stores real-time mileage and driver behavior data. These features improve efficiency in the insurance industry and enhance the overall customer experience.</p>

<p>As self-driving cars become more prevalent, blockchain-based systems can enable these vehicles to exchange information with each other. This interaction creates a comprehensive self-driving car blockchain, where cars can be rewarded for contributing to the network.</p>

<p>Several major automakers, including Ford, BMW, Renault, and General Motors, have joined the Mobility Open Blockchain Initiative (MOBI) to explore blockchain technology within the automotive industry. For example, Ford is piloting a blockchain initiative to ensure ethical sourcing of cobalt, while Volkswagen aims to prevent speedometer fraud. Hyundai is also utilizing blockchain technology and cloud-based AI to enhance supply chain financing.</p>

<p>The automotive industry has always been at the forefront of technical innovation, constantly seeking new ways to leverage cutting-edge technologies. Blockchain has the potential to bring significant benefits to the industry, enhancing supply chain processes, record-keeping, production streamlining, and other innovative trends. The evolution of the automotive industry is likely to be further advanced through the implementation of blockchain technology.</p>
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