Blockchain technology is enabling different industries to function in a better way. Usually, people only tend to think about cryptocurrencies when they hear about blockchain. However, this technology can be used in various other beneficial ways. This is even true for the automotive industry as blockchain seems to be providing unique solutions for it.
When blockchain was new to the market, various myths haunted the technology. Some individuals were of the opinion that this technology is bound to fail. The extent to which blockchain is helping other industries today was only foreseen by a few in its early days.
Even myths about blockchain were unable to stop the widespread adoption of this technology across different industries. According to projections, 81.5 million cars will be sold in 2018 which is more than what was sold back in 2017. The automotive industry plays an important role in the global economy. This growing industry is bound to benefit from the decentralized ledger system which is otherwise known as blockchain.
Technological advances tend to be adopted by the automotive industry quite well. Let’s have a look at the five signs blockchain is taking over the automotive industry.
The blockchain is giving each car its own identity
The automotive industry is welcoming blockchain-based identities which will store accurate information related to the car. This blockchain-based identity will allow key stakeholders to see what parts have been used in the car. Moreover, this identity will also show historical elements like past accidents or mileage. Knowing whether the car has had an accident or not will become easier due to this technology.
The blockchain is inherently resistant to modifications. With a blockchain based identity for each car, transactions can occur with a higher level of trust. This is because the information stored on this ledger cannot be manipulated. Before blockchain existed, people could hide key information like mileage to fetch a higher price. With blockchain, this can’t happen.
The way blockchain is giving cars a unique identity is extremely beneficial to the automotive industry.
It’s countering the counterfeit parts industry
As mentioned before, cars will have blockchain-based identities. These identities will also store information relating to car parts. Car manufacturers can assign identities to all the car parts they manufacture. When AI is used along with blockchain, it is possible to alert car-owners whenever a counterfeit part is used. Since counterfeit goods are typically not made by quality standards, they may be dangerous to use. The blockchain is aiding car manufacturers by building an effective system to record which part is installed in which car.
When a car part begins to malfunction, the car-owner can be notified that they need to replace it. If a certain part is short, manufacturers can adapt the supply chain to make sure it is available. The counterfeit parts industry will be seriously hampered thanks to the blockchain industry.
Eliminating counterfeit parts is one of the biggest benefits blockchains is offering the automotive industry.
The payment process is now streamlined
The AutoBlock of how blockchain is improving the automotive industry. A single cryptocurrency that will be used for buying and selling cars will allow a greater level of comparability. More and more dealers are going to accept this cryptocurrency. Before the existence of blockchain, the large amount of risk deterred people from making transactions. The entire payment process has become streamlined thanks to blockchain technology.
Car buying companies exclaim ‘We Buy Cars Today’ and it is amazing how blockchain makes their transactions more secure. The concept of smart contracts also plays an interesting role in this regard. Smart contracts are contracts which execute themselves according to the terms of the agreement between the parties. They enable the exchange of assets more safely and practically.
The way cryptocurrency is growing in importance for the automotive industry shows the influence of blockchain.
Vehicle tracking is becoming a reality
When cars can have their own blockchain-based identities, tracking them also becomes easy. Before the existence of blockchain, car sellers could fetch higher prices by portraying a rosy history of the car. With blockchain, the problem of asymmetric information is solved. Assigning the right value to a car becomes more possible with the car’s information available on a blockchain.
A great amount of information can be stored in these ledgers. With the more effective valuation methods erupting from blockchain technology, the automotive industry will grow. Buying an old car will not be as terrifying as it was before blockchain existed. With the way risk is eliminated by this technology, it’s safe to say blockchain is amazing at what it does.
Blockchain technology is playing a key role in the automotive industry by enabling vehicle tracking.
A more effective insurance claim process is possible
With a blockchain-based identity for cars, it will be easier to prove your eligibility for an insurance claim. While the traditional method for an insurance claim is tedious and lengthy, blockchain can streamline the process. In fact, auto insurance companies could utilize smart contracts to enable a greater level of ease for their customers.
Auto insurance companies will be able to eliminate frauds easily thanks to the blockchain. The total expected savings due to smart contracts in claims and costs and expenses was $1665 million in 2015. This shows the extent to which blockchain is beneficial for different segments of the automotive industry. Insurance companies will attempt to implement blockchain on a greater level in the future.
A greater level of trust between insurance providers and policy-owners will exist thanks to the blockchain.
Blockchain technology is playing an interesting role when it comes to the automotive industry. This technology can be used in cryptocurrencies and may possibly be used to counter the counterfeit parts industry. Both the more effective supply-chain and the better way to record car information are great contributions by blockchain. These factors clearly signal that the automotive industry has a bright future.
About the Author:
Alma Causey is a Freelance writer by day and sports fan by night. She writes about tech education and health related issues. Live simply, give generously, watch football and a technology lover.