Last Updated on March 4, 2020
Used primarily by Bitcoin to secure financial transactions, the blockchain continues to see its use extended to other sectors. The automotive universe could also seize the subject in the years to come. A question then arises: how could the blockchain revolutionize the auto sector?
Blockchain, what is it?
The blockchain is a technology allowing the storage and exchange of information. It is the technology currently used by the Bitcoin virtual currency. More concretely, the blockchain takes the form of a gigantic virtual register grouping all the actions carried out by the users. Each new action constitutes a “block”. Once the latter has listed all recent information, it integrates with the global chain of information. As a result, the recorded data can no longer be changed. During a new action, the blockchain algorithm analyzes the global chain in order to secure it and verify its accuracy. To better understand this system, let us make an analogy with a banking service. Each user action is a bank transaction. All of these transactions over a period of time (for example, a month) constitute a partial bank statement, i.e. a block. Put together, these blocks form the complete history of transactions of a person, i.e. the blockchain.
To understand the operation of this technology, you should also know that the blockchain is governed solely by protocols and algorithms, and without human intervention. In this way, any manipulation or fraudulent use of the information is thwarted at the source. The blockchain thus makes it possible to store and transmit data securely, transparently and without human intervention. This is why it is often presented as the future of data transmission. At present, it is already used in many forms: virtual money, online betting service or authentication service.
How could the blockchain revolutionize the automotive sector?
Although this technology is not yet used by the automobile world, the blockchain could revolutionize the sector in the years to come. Its use could also offer four major advantages: a renewal of logistics management, better authentication of stakeholders, a tool to fight against fraud and enhanced monitoring of the life cycle of vehicles.
1. A new management of the automotive supply chain
The first possible use of the blockchain by the automotive sector concerns the management of the supply chain. At present, principals do not always have a complete view of the entire production and marketing chain of a car. Between the parts manufactured in different factories of the group, the multiple subcontractors, the routing towards the points of sale and the life strictly speaking of the vehicle, it is difficult to follow the cycle of life of a car from A to Z. Thus, the traceability of both the parts and the vehicles themselves is extremely complicated. This is particularly apparent when the manufacturer must recall faulty models. Gold, blockchain technology would be able to track the life cycle of a product and thus ensure traceability and compliance. In addition to enhancing the efficiency of industrial production, this technology would provide more transparency and reduce logistics management costs.
2. A better authentication of the actors of the automobile
The blockchain technology would have a second major interest: to offer a precise and certified authentication of automobile actors. By listing all the information related to a product, but also to individuals, it provides access to the history of an auto seller or even a buyer. Therefore, it will be possible to ensure the good faith of his interlocutor at the time of sale or purchase of a vehicle, especially between individuals. Beyond buyers and sellers, the blockchain could offer a better understanding of leasing companies, repairers or even insurers. So many professionals who play a significant role during the life cycle of a vehicle.
3. A new way to reduce fraud and forgery
But if the blockchain identifies the actors of the auto world, it allows above all a perfect identification of vehicles. Thanks to this technology, it is possible to consult the complete history of each car: places of manufacture, repairs made, users, accidents, etc. The information being unfalsifiable, it becomes impossible to defraud on the real nature of the vehicle. A particularly useful element for the sale of used cars. According to several studies, 20% of VOs sold have falsified their odometer. Through a tamper-proof digital maintenance notebook, using blockchain technology, a buyer can ensure the accuracy of information. This is also a service that the French start-up Atos wishes to democratize in the years to come.
4. Better monitoring of the life cycle of cars
Given that the history of a vehicle can be accessed by all, various players in the automotive world will benefit. With the blockchain, manufacturers will be able to recall possibly defective vehicles (because a car of the same production line has defects), and this, before a failure occurs. Insurers, for their part, could advise their customers on the offer best adapted to their vehicle and its life cycle.
The key among these uses of blockchain is not the technology but the network. Bitcoin’s popularity and strength as a store of value grows with the increasing network of users who have adopted and support it. Hiring a blockchain consultant from an experienced blockchain development company can help you to execute the idea you have in mind.
Among other things, this is important in the automatic payment of parking fees or electricity costs at a charging station, which in the future can be carried out automatically by autonomously driving cars. At the same time, a blockchain is better protected against hacker attacks from the outside. If the information, such as account balances, is spread across many computers and has not been stored in a central location, the information can not easily be retrieved by attackers.