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Reformation in the Automotive Industry with a Rise in the Blockchain Technology

Reformation in the Automotive Industry with a Rise in the Blockchain Technology

blockchain-technology-in-automotive industry

The adoption rate of blockchain technology in the automotive industry is enhancing presently, owing to numerous developments, and is at its pole position for technological progressions over the years. The technology enables easy maintenance of records known as blocks connected using cryptography, wherein information is safe and bound to each other. Hence, the blockchain is decentralized, making it hackerproof and securing the data from being compromised.

Globally, the automotive blockchain market is estimated to progress at a CAGR of 45.01% between 2019 and 2027. The market will witness a paradigm shift by underpinning the upcoming potential attributed to revolutionary developments and entertainment from the automotive stakeholders.

Transforming Blockchain Developments in the Automotive Industry

  • Smart Contracts

Blockchain technology aids easy and conclusive verification of every transaction related to digital assets at any time, enabling easy regulation by smart contracts. The system utilizes cryptocurrency to attain contract terms and exchange value automatically. It enables two-way communication and easy handling of a transaction for automobile vehicles without the involvement of financial institutions. Employing smart contracts can simplify Identifying authenticated riders, setting up transactions like battery charging schedules and costs for autonomous vehicles. Adoption of smart contracts on autonomous vehicles, for instance, on a steamr platform, can automatically receive data from other vehicles, traffic channels, weather stations, and other sources, which is required for driving.

  • Digital Payments

Blockchain technology supports secured and automatic digital payments, facilitating autonomous vehicles to make payments for parking, tolls, electric vehicle charging, car-sharing, and in-vehicle services seamlessly. Prominent cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and others are all initiated by blockchain technology. AT&T is one of the companies adopting digital currencies methods to carry in-vehicle payments. IBM and ZF introduced an advanced digital assistant for cars named Car eWallet, enabling secured and convenient payments, independently performing tasks, and authorizing payments without involving the user. Bosch made another greater implementation of this technology; the company teamed with IOTA to discover several blockchain-based micropayments amongst autonomous vehicles.

  • Automotive Security & Privacy

The constant rise in autonomous vehicles is enhancing the need for software codes employed for controlling vehicles. Thus, an increase in the number of connected devices in the ecosystem poses a higher stage for potential security threats. The innovation of smart car connectivity features the security of data exchanged between vehicles, software vendors, smart homes, and others. It also offers privacy to the car owners adopting blockchain technology and assures proper access control, data integrity, and identity management. These blockchain-based security systems guard autonomous vehicles against malicious cyberattacks and privacy breaches. Cube, a security platform in the auto industry, introduced autonomous car security platforms based on deep learning, blockchain technology, and quantum hash cryptography.

  • Easy Authentication of Ownership of Cars

In the present era, where the world is moving forward with updating technologies, some things are yet to be reformed. For instance, consumers still carry their licenses and vehicle registration when traveling in their cars. Hence, adopting blockchain technology can simplify the tasks. Various advancements of blockchain have simplified tasks for automobile users and law enforcers, leading towards easy authentication of ownership. Moreover, the technology provides real-time data about the vehicle’s life, mileage, repair history, accidents, etc., making the purchase of the car a safe and transparent process.

For instance, Volkswagen introduced a blockchain-based tracking system that prevents odometer fraud, prohibiting the fraud car sellers from manipulating odometers to produce false mileage values and misleading customers.

  • Streamlined Supply Chains

The automotive supply chain incorporates complex functions consisting, distributors, software and firmware suppliers, dealers, regulatory agencies, and insurance companies. Blockchain technology enables transparency of precise information amongst the different parties, enhancing just-in-time logistics, levitating inventory turns, and diminishing erroneous orders. It facilitates effective transaction costs like surcharges applied by third party sources and guards the product and assembly ownership, trading, authenticity, purchase, and license use of each component, enabling easy collaborations of supply chain partners.

For instance, Toyota Research Institute (TRI) is exploring blockchain technology for developing the latest mobility ecosystem to leverage autonomous driving technology. Also, Hyundai is collaborating with IBM focusing on building a new supply chain financing ecosystem utilizing Hyperledger Fabric. The project focuses on increasing automation and customer experience by adopting cost-effective methods.

To conclude

The efficient adoption of blockchain has enhanced the cybersecurity for vehicles largely, featuring secure payments, effective identity management, and better data validation. Thus, blockchain is an innovative technology adding opportunities in the automotive industry, building greater trust and security, essential for a self-driving future.