Blockchain technology has continued to remain relevant since the first blockchain – the bitcoin protocol – was released to the public by the famous pseudonym Satoshi Nakamoto in 2009. The technology has changed the financial sector, giving users the freedom of money. And now, it is also disrupting other industries.
In an earlier episode of how blockchain is changing the world, we talked about how blockchain will disrupt the digital marketing and advertising industry. Today, we’ll discuss how blockchain will affect cars and the automobile industry.
How Cars are Changing
If anyone asks you to define change, tell them about cars. The last 13 and a half-decades have transformed vehicles from the first real practical automobile called “Benz,” powered by steam engines to electric powerhouses like the Tesla Model S, which are designed for “speed and endurance with ludicrous acceleration, unparalleled performance, and a sleek aesthetic.”
With that kind of change, it arguably correct to say that the auto industry is not only sophisticated and complex but also embraces technological advancement, which has led to significant innovations in cars over the last century. As of 2018, the global automobile industry was worth around $2 billion with more room for growth as the industry continues to adopt newer technologies, like blockchain.
How Blockchain Will Disrupt the Automobile Industry
So what are the potentials of blockchain? What are the practical applications of the technology in the automobile industry? And are there any car manufacturers already utilizing the blockchain?
Lack of transparency, mistrust, and manipulation of data are some of the downfalls of traditional record-keeping. It’s quite easy for a car dealer to sell one of the cars in the showroom without reporting the sales for proper record keeping, just to evade the bank or lender who offered a loan for the vehicle. This lack of transparency can end the contract between the bank and the dealer, as the bank could take legal action once they find out. It even makes it easier to find the parts for your specific car. If you need to replace your headlight, your steering wheel, your leather floor mats, the gauges or even windows, they will all be easier to do when you can scan a single code.
With blockchain technology, however, there is no need for trust as the system uses a mechanism where the parties in the network can reach an agreement on what the canonical truth is. All parties have access to the data, which is immutable, thus tracking how and when cars are sold or when an event occurs. This makes the blockchain a transparent ledger.
Nothing plague the auto industry like the increasing number of fake car parts. The best way to combat these phone auto parts, which can cause damage to both the end-users and the manufacturers, is to adopt counter technologies, like blockchain.
Such technologies enable manufacturers to certify auto parts, which will then pass certification checks whenever they are resold. For instance, last year, the famous Italian luxury sports car brand and manufacturer, Lamborghini, partnered with Salesforce Blockchain, to improve its verification process of the parts and service of each Lamborghini car using the blockchain resources of Salesforce.
The automobile supply chain is quite complicated as it deals with many materials and entities, including hardware, software, dealers, suppliers, regulators, and more. This can lead to inaccurate record keeping as well as mischief from any of the parties involved. However, blockchain can provide transparency and accurate information on all the processes involved in the supply chain.
Car manufacturers like Volvo understand the potentials of blockchain in supply chain. In November 2019, Volvo announced that it has started using blockchain technology to track the global supply chain of the cobalt used in making its electric car batteries.
Autonomous cars are disrupting how we use transportation. But with ride-hailing services, comes the issue of trust in exchanging value securely and irreversibly. However, blockchain can change that. Projects like DAV Network are building on the blockchain and creating smart contracts that allow parties involved in autonomous driving to interact and transact securely without the issue of trust.