Accelerated by the pandemic, digital transformation has started to reshape a number of markets even more rapidly than expected. Connectivity created by blockchain technologies is one of the most profound changes occurring in the automobile sector, forever redefining the driving experience. Here’s a rundown on the blockchain’s future for connected vehicles.
The linked vehicle era
Globally, about 28.5 million linked vehicles were sold in 2019. With an abundance of cars on the road, each with millions of lines of software code and hundreds of data-gathering sensors, original equipment manufacturers (OEMs) and suppliers must now prioritize in-car data processing and protection. This is where blockchain technology for autonomous vehicles comes into play.
Equipped with IoT computers, cameras, WiFi, and other cutting-edge technology, new cars are capable of recognizing and interacting with their surroundings. Connectivity enables a car to unlock a garage door, reserve a table for dinner, and search for remote app upgrades proactively – without the driver ever leaving the front seat.
The automotive industry’s blockchain ability
Blockchain is a distributed online blockchain that enables individuals to manage data sets submitted by others with the use of a personal computer. Each block in the chain incorporates new details in addition to the previous block’s information. As a result, the data become more adaptable to change and more secure against cyber attacks.
The driving experience is being elevated to a higher stage thanks to blockchain technologies. OEMs have also started investigating the several uses of blockchain for connected vehicles, with the demand expected to hit $428.57 million in 2020, according to Allied Market Research. This burgeoning sector is predicted to reach a whopping $5.61 billion in value by 2030.
The top six applications of blockchain technology in wired automobiles
For the automobile sector, shared ledgers have a plethora of uses, and the list is constantly growing. For the time being, let’s examine the six most often cited advantages of blockchain technologies for the automotive industry.
1. Increasing the security of in-car payments
Cyberattacks on linked automobiles increased sevenfold in 2019 relative to 2016. This poses questions about protection for both drivers and OEMs. A digital ledger – blockchain enables the highest degree of data encryption presently possible. Once data has been authenticated and applied to the block, modifying it becomes almost impossible.
As a result of this security movement, some automakers have revealed the launch of in-car payments. Automobile-based e-wallets would allow motorists to conduct transactions without exiting their vehicle. Honda, for example, has created a suite of applications that allow users to make reservations, buy movie tickets, and much more through the navigation system of their car.
However, concerns have been expressed about the privacy, reliability, and accessibility of these futuristic payment technologies. Blockchain technologies will increase the security of in-vehicle financial transactions to guarantee that payment meets the intended receiver. Smart contracts, which operate on the blockchain, can move funds from a user’s account to a recipient’s account in order to charge the vehicle or pay for parking and insurance, for example.
2. Improving supply chain visibility
Automobile components are often imitated. Automobile tire makers lose about €2.2 billion annually, while automobile battery manufacturers lose up to €180 million due to counterfeit vehicle parts. Apart from the financial costs to legitimate suppliers, counterfeit components pose a significant safety risk to cars. In India, bogus car parts are responsible for 20% of incidents.
The accountability provided by blockchain enables the tracking of automobile parts from the producer to the dealer and finally to the end consumer. Due to the fact that any step and movement is registered during the whole journey – from manufacture to purchase using a distributed ledger helps avoid data theft and verifies the authenticity of automobile components.
3. Simplifying the recall procedure for vehicles
According to the Automotive Defect and Recall Report, 28 million vehicles had to be recalled in 2018. Recalling vehicles is a complex and expensive process, which blockchain can improve. A blockchain-based record helps identify only those vehicles which need to be recalled, minimizing both the costs for manufacturers and the inconvenience for drivers.
By putting data through a blockchain-based protocol, each car part obtains a unique identity number which is recorded and traceable in the ledger. Manufacturers are able to store data about their products and, once a vehicle has to be recalled, those with faulty components can be easily found.
4. Reconstructing the face of automobile insurance
Insurance firms may personalize their plans and complaint processing processes by storing details on an individual’s driving behavior rather than their driving background. Embedded sensors collect data on acceleration and braking behavior, vehicle pace, mileage, and a driver’s position, among other items. This data is safely maintained on the blockchain and is accessible to the insured as required. This form of policy is sometimes referred to as “black box” or telematics insurance.
Access to this kind of driver record will often further streamline the method of filing an auto insurance claim. Special road traffic collision laws, governed by blockchain-based smart contracts, will provide insurance providers with specific facts about an accident after it occurs. Additionally, the idea that this material cannot be tampered with simplifies the method of filing a lawsuit.
5. Improving the experience of car-sharing
Autonomous vehicles driven by blockchain technologies have the potential to revolutionize the way we share rides. By creating safe direct transfers between rider and driver when certain requirements are fulfilled, smart contracts will remove the need for a middleman.
For instance, a driver can be paid in full when the passenger arrives at the destination, or in part if the rider cancels the journey. Additionally, a blockchain-based app will include details regarding drivers’ and riders’ reputational scores, prices, and service efficiency, without the need for an intermediary.
Additionally, blockchain technology may be used to improve the mutual ownership of a car. Blockchain technology may be used to archive and update records regarding a driver’s license, vehicle repairs, and driving behavior, among other things. As a result of blockchain technologies, everybody can have quick access to evidence of who they are sharing a vehicle with.
6. Ownership transfer
The existing model for car ownership transition is a paper-based and sometimes lengthy procedure. Blockchain technology has the potential to greatly simplify the transition of ownership from one individual/company to another. All related data, such as the vehicle’s status, injuries, injury, service history, and component repairs and replacements, may be stored in blockchain, creating a trusted repository of records that can be verified easily and accurately.
Conclusion
The case for utilizing blockchain technology in connected vehicles is compelling. This open structure, which enables consumers to more efficiently manage and store data, gives companies a distinct competitive edge and numerous growth opportunities.
COGNITIONTEAM assists clients in determining their organization’s readiness to embrace, create, and execute a blockchain strategy. If you’re ready to take your company to the next level and stay ahead of the market, Contact us today.
