Five Blockchain Use Cases for the Automotive Industrybr>
The automotive sector is no stranger to innovation, especially today. Cars feature cutting-edge technology like self-driving capabilities and Internet of Things (IoT) connectivity. Therefore, it’s no surprise that multiple blockchain use cases have also emerged in the automotive industry.
Blockchain technology has impressive potential for many industries, but the automotive sector is an ideal candidate. Many car companies have already started implementing these technologies into their products and processes. Here’s a look at five of the most promising automotive blockchain use cases.
1. Selling Vehicles With Crypto
The most straightforward automotive blockchain use case is buying and selling cars with crypto. Vehicles are often one of the most expensive purchases Americans make, opening the door for fraud and theft. Paying through crypto can give buyers more assurance, thanks to the security and transparency of the blockchain.
Some companies have introduced smart contracts into the car-buying process, too. These transparent, automatically enacting contracts will help loan providers fight delinquency and help simplify the process for buyers.
European car financing firm Auto 1 FT became the first firm to introduce smart contracts to car loans in 2021. Tesla famously became one of the first auto companies to accept crypto payments recently. More companies will likely follow suit before long.
2. Creating Smart Contracts for Ridesharing and Renting
Smart contracts have potential outside of buying a car, too. They can also provide security and ease of use in renting and ridesharing. Blockchain-based renting would provide an easily searchable, unchangeable record of a renter’s contract history, informing future contracts. Rental companies could then ensure they offer everyone the best deal and fight fraud since smart contracts execute automatically.
Similarly, smart contracts can reduce fraud in ridesharing services. Apps could create smart contracts for each trip that guarantee they won’t execute until all the terms are satisfied. That way, passengers could ensure they won’t pay until they reach their destination safely and efficiently.
3. Improving Supply Chain Visibility
Another promising blockchain use case in the automotive industry is supply chain management. Auto dealers often have thousands of parts in their inventories, making it challenging to keep track of what they have on hand, leading to shortages and delays. Blockchain tracking could provide accurate, real-time records, helping them order more parts in time.
Blockchain tracking technology could improve transparency throughout the supply chain after ordering. These records let companies see exactly where parts are coming from and where they stop along the way. Counterfeit parts cost the industry $12 billion annually, so the advantage of this transparency is hard to ignore.
4. Streamlining Regulatory Compliance
The automotive industry is highly regulated, which can create complications for automakers. Manufacturing a car is typically a complicated process involving multiple locations and companies, making it hard to ensure every part meets all relevant regulations. Blockchain technology can simplify this process.
Blockchains can offer a permanent, easily accessible record of a part or factory’s regulatory status. As a result, manufacturers can ensure they don’t overlook any regulations, and authorities can audit them in less time. Renault started working on a blockchain regulatory system in 2018, and others will likely do the same.
5. Developing Autonomous Vehicles
One of the most exciting automotive blockchain use cases is helping develop self-driving vehicles. Driverless cars need vast amounts of real-world training data to help them navigate safely. Blockchain can help record and share that information efficiently and securely, speeding up development.
Toyota began creating a blockchain system for autonomous vehicles in 2017. It aims to let automakers sell their driving data to others, letting them help other self-driving cars while ensuring automakers retain ownership over their data. That way, they can still profit from this information while collaborating to make driverless cars a reality sooner.
It could take decades to produce safe self-driving cars without a secure, quick data-sharing service like this. However, if car companies can exchange this information more easily, they can gather all the necessary data much sooner. It may only be a few years before safe self-driving cars hit the road if this practice becomes widespread.
Automotive Blockchain Use Cases Hold Vast Potential
The automotive sector could benefit in many areas from blockchain technology. These five use cases are just a fraction of what these systems could do for the industry.
As more automotive companies embrace blockchains, cars could become safer, more accessible and full of cutting-edge features. The complications that plague the industry today could become a thing of the past.