What is Blockchain technology? Blockchain technology at a basic level is a distributed database that maintains an ever-growing list of records that can’t be altered and hence are protected from tampering. Each valid block is made of time-stamped transactions and linked to a previous block, with the whole forming a chain. Blockchain architecture enables a distributed network of computers to reach consensus without the need for a central authority or middleman, creating a digital public ledger of transactions shared among the network. It uses cryptography and advanced algorithms for security and verification in order to add new blocks to the chain.
According to automotive industry research, we have reached a stage where vehicle quality and fuel economy is at the highest level ever, supply chains are most efficient and vehicles are in operation for longer than ever before (300,000 miles or more when maintained properly). But, one of the major changes that the automotive industry is undergoing now is that cars are becoming less mechanical, and more software-oriented. Automation has now moved to the operation of the car itself. Fully autonomous cars will be available soon, with most automakers working at some level in creating automated or self-driving cars. In our view, this is where Blockchain can be a pivotal enabler of change.
In their recent report on “Blockchain Technology Revolutionizing Automotive Industry,” Frost & Sullivan Analysts state that OEMs are gradually waking up to Blockchain technology’s benefits of real-time monitoring, auditability and scalability in an era of connected living. They also predict that by 2025, the penetration rate of Blockchain technology in functional areas such as retailing & leasing, supply chain logistics, mobility solutions, smart manufacturing, connected living & IoT is expected to be at ~37.2 percent.
Let’s explore the number of ways Blockchain Technology could benefit the Automotive Industry
Blockchain and the Automotive Supply Chain
As autonomous car functionality becomes more prevalent, OEMs, Insurance providers and consumers will want a guarantee that replacement parts meet OEM specifications for safety and have not been substituted by inferior parts. With Blockchain, it would be easy to validate any electronic part in the car. OEMs could establish an enterprise block chain architecture that would then be implemented by suppliers. The Blockchain could expand when new suppliers are added to the chain. Each part with its robust unique digital identity would be visible in this tracking system. The OEM and every supplier would have an encrypted record in the ledger, which would make an incorrect or fraudulent part instantly identifiable.
Blockchain and Auto Insurance
To offer flexible and affordable vehicle insurance packages to their customers, it is helpful for Insurance companies to evaluate data from actual driving behavior. The data collected from vehicles, such as braking patterns or speed, can be helpful for identifying risk associated with insuring a driver. Blockchain architecture would help the vehicle owner to control his/her personal data shared with the insurance company, while providing a guarantee to the insurance company that the data transmitted to them for insurance purposes was not altered by anyone.
Blockchain and Smart charging services for Electric vehicles
The growing number of electric vehicles in the market has increased the demand for a fast and efficient vehicle charging infrastructure. By interconnecting the smart vehicle, smart home and smart user devices, we can ensure that vehicle is fully charged when the user needs it while choosing the most efficient and economical charging strategy (such as avoiding peak load times).
Blockchain architecture allows the vehicle to exchange data with the smart home as well as with the user’s smart devices to find the best charging strategy. The vehicle owner define the information that can be shared between these entities to protect his/her privacy while enabling unique services; thus enhancing the smart vehicle’s functionality.
Blockchain and Car-sharing services
Car sharing platforms and services are highly distributed and have a requirement to interconnect smart vehicles, car-sharing providers and the end-users in a secure and reliable manner. A trusted communication channel will be needed to securely exchange data including the location of the vehicle, the key to unlock the car, and the payment details for the user. The decentralized nature of Blockchain architecture is suitable for such highly distributed services. Blockchain interconnects the involved entities in a secure way while protecting the privacy of the users as well as the vehicle from unauthorized access.
Blockchain and Vehicle-to-Everything (V2X) communication
By using Blockchain for V2X communication, an OEM gains additional speed and frequency of secure transmissions not available with the majority of today’s OTA solutions. Given the unique design of Blockchain, any record of any transmission can be validated for accuracy, thereby giving the OEM or any vehicle owner an undisputable record of truth. This unique validation method is not available to the automotive market today. Additionally, Blockchain addresses the V2X security issues (many senders, many receivers) without leaving the vehicles vulnerable to hacking, making it an ideal data record for small packets of information.
To learn more about how Autonomous Vehicles will reshape society and how private blockchains will improve driving communication and safety, view our complimentary webinar now.