In years gone by, blockchain technology has been solely associated with being the foundation of worldwide cryptocurrencies. However, these days, it’s developed into something far more fascinating and has been successfully implemented across a wide range of sectors and industries worldwide.
From aviation to finance and healthcare to global politics, the ability of blockchain to provide those who use it with everything from secure transactions to accurate record-keeping, not to mention the chance to make conventional paperwork associated with centralised systems completely redundant.
But out of all industries using or considering using blockchain, few have their eye as firmly on the technology as the automobile industry. Across the world, various car companies have begun to get involved in blockchain to better how they do business and overcome the challenges facing the modern automobile industry.
Today, we’re going to explore how blockchain can overhaul the automobile industry, look at the challenges the vehicle sector currently faces, and how car manufacturers are utilising blockchain in a series of real-world use cases.
But first, a word of advice. Whilst blockchain technology and the cryptocurrencies hosted upon it are changing our world for the better in a range of ways, the space is still very volatile. If you’re planning to get involved with blockchain and crypto, always do your research and understand market volatility. Also, this is a relatively new sphere, so scams are abundant. To avoid such risks and keep your crypto safe, it’s strongly recommended to use secure platforms that automatically connect you with a broker. Bit Index AI is one of many options that provide such a service. What’s more, the platform is easy to navigate and equips you with the essential trading tools and info to build your investment strategy.
Now, with that out of the way, let’s get into gear and begin!
What Challenges Do Modern Car Companies Often Face?
Across the vehicle industry worldwide, numerous companies are battling it out to be the most modern, efficient and forward-thinking producer of them all. Companies are increasingly moving towards business models and products that are energy-efficient, environmentally friendly, and smart.
However, with these new goals often comes new challenges. Next, let’s look at some of the most common challenges that many modern car manufacturers face.
Fake Car Parts
Worldwide, car companies are plagued by an abundance of counterfeit car parts and have been for many years. So far, there has yet to be a foolproof way to combat the problem of fake car parts. Not only does the prevalence of fake parts cause huge financial losses for car producers, but it also harms the safety of those who drive and ride in cars bearing fake parts, which in turn harms the brand reputation of car companies.
Evolution of Autonomous Vehicles and the Data Involved
Autonomous cars are an increasingly common feature across the automobile sector. However, this kind of vehicle creates enormous amounts of data. This data needs to be effectively stored, analysed, and managed to ensure that autonomous cars remain a safe option.
Many modern car firms are relentlessly trying to create a working system that can effectively manage driver and vehicle data securely without compromising efficiency and client safety when driving.
Vehicle Tracking
Suppose a dangerous fault is reported amongst a group of vehicles that have been manufactured. In that case, there is currently no foolproof method that a manufacturer can use to find, locate, and recall flawed vehicles once they have been bought and driven out of car dealerships.
So, the current recall process for car manufacturers is nightmarish, complicated, and time-consuming. This system is also flawed because it allows fraudulent activity to flourish. For example, counterfeit parts or stolen vehicles are equally hard to track.
Car Sharing
The car-sharing sector has grown massively in recent years and is becoming very popular amongst consumers. To cater for demand, several car-sharing services have appeared, but they’re often riddled with flaws.
There are numerous examples of times when car-sharing companies have failed to answer smartphone identification keys, meaning the reliability of these systems could be improved.
Insurance Fraud
Each year in the US, insurance fraud costs the auto industry over $308 billion and is increasingly commonplace. Shady people often submit fraudulent insurance claims regularly, which, in the current decentralised system, are often missed by car manufacturers and authorities.
So, that’s the current challenges facing the automobile industry covered. Next, let’s look at blockchain technology and its numerous benefits.
The Benefits Offered By Blockchain Technology
With the birth of Bitcoin in 2009, so too came blockchain technology that it was laid upon. In the years that followed, Bitcoin became a major success and shone a light on blockchain’s incredible abilities and benefits. Most importantly, the technology proved to enable safe and transparent transactions.
In the wake of Bitcoin, thousands of other cryptocurrencies were formed on the blockchain. After that, countless companies in a wide variety of business sectors worldwide began to look at blockchain technology as an answer to some of their biggest problems.
Blockchain Offers Transparency
Between businesses and consumers, there often needs to be more transparency regarding financial data and information. Blockchain can change that and add trust between businesses and clients never seen before.
The transparent nature of blockchain lets any person within the network see every transaction made and then freely make choices based on the transaction activity they’ve seen.
Blockchain Is Decentralized
Blockchain technology is inherently decentralised, which is the foundation where the bulk of its benefits lies. Because it’s decentralised, no one person controls the blockchain or the data that flows through it. Each person using the blockchain can access a copy of the distributed ledger and see all transactions transparently. Also, its decentralisation aspect means there is no need for intermediaries in financial transactions.
The Technology Is Irreversible
The word irreversible might spook some people. But when in the context of blockchain, it’s a great thing. You see, the data documented on the blockchain takes place in a secure transaction and, as such, is irreversible. This means that all data on the blockchain cannot be manipulated or altered by people with ill intentions, whereas a conventional centralised system can.
It Offers High Level of Security
When compared to conventional centralised systems, blockchain is on another level. Because of its decentralised status, data storage on the blockchain is distributed across multiple points on the network. This means that it’s impossible for cybercriminals to successfully hack it. Plus, it is a formidable barrier against fraudulent activity as all records are secured via encryption.
Blockchain Is Cost-Efficient
And last but not least, blockchain can help companies achieve significant cost reduction in their business operations by improving speed, automation, and efficiency. As mentioned earlier, blockchain removes the need for intermediaries to be involved in transactions. It reduces the need for time-consuming manual tasks and processes such as reviewing, reporting, and auditing.
So, that’s the main benefits of blockchain covered. But how can this ground-breaking technology successfully overhaul the global car industry? Let’s find out!
How Can Blockchain Change the Global Automobile Industry for the Better?
From top to bottom, the revolutionary power of blockchain has the potential to change the automobile industry for the better. Every process involved in the automobile business model can benefit enormously from the blockchain, from manufacturing and distribution to car sales and service functions.
Combating Counterfeiting
To stop the plague of counterfeiting that currently faces the automobile industry, blockchain can provide a solution that sees all those involved in a vehicle’s journey utilise the same supply chain. This minimises the risk of fake, counterfeit parts being used.
Suppose car manufacturers can connect car supply chains to a blockchain-based protocol. In that case, they will be able to get an accurate insight into what is currently making their supply chains inefficient.
When combined with the Internet of Things (IoT) technology, blockchain can achieve a level of monitoring that can form an efficient and dependable track-and-trace system to recognise counterfeit car parts on the global market.
Developing Autonomous and Connected Cars
Currently, the need for a reliable and streamlined data management system is a massive barrier to the development of the autonomous car industry and poses a huge challenge. However, through the blockchain, autonomous car manufacturers can ensure that the data of the car users remains secure and autonomous self-driving cars can easily access it to aid their navigation on the road.
A combination of Blockchain and smart contracts will permit this data to be held and managed in a decentralised accounting structure.
Managing a Vehicle’s History
From significant repairs and engine checks to accurate mileage and records of ownership, blockchain can be used to efficiently store and manage the entire history of a vehicle from when it left the production line to the current moment.
With blockchain, consumers who buy second-hand cars use the technology to ensure that they’re getting what they pay for and that the vehicle is legal, with a good history of maintenance, and won’t have any nasty surprises lying in wait for them further down the road.
Plus, it’s not uncommon for car producers to have to recall some vehicles due to defects and faults. With blockchain, tracing the vehicle’s history will be far more streamlined and assist car producers in easily finding the vehicle in question and successfully recalling it.
Car Sharing
The increasingly popular ca sharing industry relies heavily on real-time verification and equally fast payment processes. As well as guaranteeing this, blockchain technology can create a decentralised platform for car sharing with various benefits.
For example, the rental history of cars owned by a car-sharing company is as transparent and as genuine as it can be because it cannot be altered or tampered with by an individual party. Plus, in a car accident, the person driving the car at the time of the accident can be accurately identified.
On a smaller scale, blockchain can also automate time-consuming tasks like registering new leases or calculating accurate rental fees based on how much clients have used the car.
Auto Insurance
Car insurance is an industry worth more than $327 billion. But despite this, it’s an industry still plagued with flaws that can easily be addressed through the adoption of blockchain technology.
For example, the blockchain can assist insurance firms by sharing data surrounding the behaviour of their clients. This will help companies easily determine premiums based on accidents and the client’s insurance claims history.
Currently, most car insurance processes are manual, which is time-consuming and expensive. Because anything recorded on the blockchain cannot be altered or modified, insurance companies can verify and counter fraudulent claims faster.
For clients with a car insurance policy, blockchain can assist them, too, by streamlining the process of claims resolution and making it far easier and faster.
In Summary
To sum up this guide on how blockchain can revolutionise the modern car industry, it’s clear that blockchain technology presents car manufacturers with a seriously promising chance to shift away from their currently outdated and often inept industry models and instead harness the blockchain to gain access to a wide range of new, exciting, and far more efficient ways of handling business in the automobile sector.
These innovative car manufacturers who have already begun exploring blockchain use in real-world use cases have quickly found out how much power the technology has to transform how they do business. Specifically, blockchain can overhaul compliance very well and has performed phenomenally in this area.
From suppliers of car parts to the people who eventually drive the manufactured vehicles themselves, blockchain technology can provide a current level of control unseen before.
It’s clear that all car manufacturing businesses and organisations can benefit in some way from the immutability, transparency and built-in verification that comes as standard with blockchain technology. So it’s only natural that many car manufacturers strategically plan to invest heavily in decentralised technology.
As we reach the end of this guide to blockchain and the automobile industry, it’s only natural that many of our readers will consider investing in blockchain to prepare for a very bright future. If you’re one of them, then you must do it right.
Blockchain and crypto markets are very volatile, with prices rising and falling dramatically in a short time. If you wish to invest in blockchain and crypt, ensure you do it correctly by researching and understanding how the market works and its volatility.