Is blockchain the next big disruption in the automotive sector?

Blockchain, often refers to as distributed ledger technology (DLT), is not limited to only cryptocurrencies. The technology is extensively being espoused and utilized by other industries, especially the automotive industry. It is likely to become essential for the automotive sector in the coming years with the intention of making the next-generation cars into a reality.

Today’s advanced cars are turning to data centers with onboard sensors and computer systems that capture information about the vehicle. Blockchain has the potential to bolster trust and collaboration among businesses, consumers and even vehicles with more secure, traceable transactions and better access and transparency of information.

According to the Frost and Sullivan report, 10 percent to 15 percent of connected vehicle transactions are expected to be on blockchain by 2025. The automotive space has always kept a keen eye on new and emerging technologies in order to streamline operations, release new end-user functionalities, drive revenue growth, among others. Several promising technologies that had an enormous impact on other industries might have passed the automotive industry. But when it comes to blockchain there are already a few companies investing in this technology. It could empower a secure digital identity at carpooling systems. It protects personal settings and preferences in the car safely avoiding revelation to unnecessary parties. This could also enable peer-to-peer carsharing.

With blockchain-based smart contracts industry leaders could optimize and automate various processes in the vehicle leasing and financing section. If a car’s leasing rate hasn’t been paid yet, for instance, it is possible to thwart it from being utilized by neutralizing the revealing system. Blockchain-powered solutions could also enable the car rental companies to monitor if the cars are in cleaning, maintenance, among others.

Since blockchain solutions are transparent, they are increasingly being adopted to empower secure communications and digital payments between connected vehicles or vehicles. The technology has gained or gaining lots of traction in the automotive industry.

In last May, the release of MOBI (Mobility Open Blockchain Initiative) brought together major players of the auto industry, such as BMW, General Motors, Ford, and Renault, and leading blockchain and technology Startups and premier organizations like IBM, Accenture, and ConsenSys. The technology assists in solving core mobility issues like scalable sharing vehicle ownership and the incorporation of multiple mobility stakeholders consisting of consumers, OEMs, mobility and transport providers, city and infrastructure providers among others.

Multinational professional services firm EY, for instance, launched a blockchain-based integrated mobility platform, named Tesseract, in 2017, with transport services ranging from single vehicles to fleets available on the platform. It will also offer access to a range of on-demand mobility solutions.

A blockchain is a decentralized and distributed public digital ledger technology which is utilized to store information and static figures and dynamic transaction data across several computer systems. With this tech, the record cannot be changed retroactively without the alteration of all subsequent blocks and the collusion of the network.