Terms like Ethereum, Litecoin, XRP, etc., are no longer unfamiliar to most of the Internet users. The cryptocurrencies are dominating the Fintech industry as they provide a way for safe digital transactions for all involved parties.
One most important use of cryptocurrencies other than different forms of investments is an ICO (Initial Coin Offering) campaign in which the investing party buys a newly created altcoin or digital token to seek higher returns.
While everyone is familiar with what these altcoins are, a few know about the underlying mechanism that makes them so secure and stable.
Most of the cryptocurrencies operating in the digital word work on the concept of blockchain technology. In simple words, a blockchain works similar to traditional ledgers. However, the key differentiator is their physical and digital presence, and that blockchain is an immutable, distributed ledger having no central authority.
Blockchain uses small blocks to store cryptographically coded and connected data. Thus, ensuring the security and privacy of concerned users.
These blocks bear time stamps of when a transaction or trade is happening and the data, which can be terms or agreements that need to be fulfilled by the exchanging parties. Once you entered the data, it's made permanent, unalterable and verifiable. The feature that brings technology into the mainstream is its quality to diminish the chances of any third-party involvement on personal records as it promotes the idea of decentralization.
Another distinctive feature of blockchain is its applications in various industries. Not only the Fintech world is embracing it and reaping benefits from it, but the automotive sector is also exploring the possibilities.
Blockchain based automotive solutions can capture, store and verify supplier details, using outside information. That's even before the supplier delivers services to automotive companies. Once validated, a supplier contract can get executed on a blockchain and payments made when a product or service gets fulfilled. Also, you can provide data 'off-chain,' for supporting supplier performance and for giving information about future contractual agreements.
Blockchain based automotive solutions can capture, store and update information on vehicle parts including spare parts. Thus, enabling the service center, car manufacturer and customer to know the provenance and trace the origin of spare parts through the supply chain to the original manufacturer location and date.
Blockchain based automotive solutions can provide an end-to-end supply chain solution that can enable automotive companies to order and sell, track and pay for products or goods once delivered at their destination. With smart contracts, documentation would be updated, viewed, and validated by involved parties on the blockchain. Those parties can also initiate seamless payments throughout the process based upon the terms and conditions coined in the agreement (such as between seller and customer authorities, seller and shipping company and between buyer and seller).
In addition to it as an extension, connected IoT sensors and smart devices could help assess the condition of containers and other necessary information recorded on the blockchain and inform in advance of final settlements such as if goods have got damaged.
Blockchain based automotive solutions can enable car manufacturers to find vehicles containing defective spare parts, and therefore can make targeted recalls or issue service bulletins for those vehicles. It could result in fewer hassles for customers as well as lower the recall costs for the process. Not only this but this application would also monitor the status of the recall. For example, repaired vehicles or vehicles repaired by the dealer, and which need to send for regulatory reporting to the government.
Blockchain based automotive solutions can record dealer and customer purchases and issue loyalty points. Those points can be redeemed and used as a currency within the loyalty network of an OEM (Original Equipment Manufacturer).
Also Read: Blockchain Smart contracts Are The Future
Blockchain based automotive solutions can securely store, update, trace and share vehicle data across OEMs and with external entities in real time. The vehicle database could include information such as a car's maintenance and ownership details and enable OEMs and other involved parties to view and edit the data to the blockchain. Users would be able to receive payments through the global database for services rendered, such as for repairing a vehicle, buying and selling of carriers or their data to third parties. And thus, replace the physical log book.
Blockchain based automotive solutions can record and execute agreements and payments transactions. It will enable vehicle owners to monetize trips.
The solutions would enable interconnection between smart vehicles, car sharing providers and the end-users in a more secure way. End-user and car sharing providers would register themselves on the blockchain and exchange data securely and seamlessly. Such data could be the vehicle location, agreement terms (insurance details, cost per mile), keys to unlock the car, and user payment details.
Also, the solution would execute all payments following completion of a ride and update all details with a history of that trip.
It was an analysis aimed at identifying prospects where, in both the traditional and future automotive industry, blockchain technology could hugely impact.
Given the rapid adoption of blockchain across various industries, it's possible that within one or two years, blockchain could become the panacea for many of the challenges faced by the automotive sector.
The analysis in this blog can be used to help understand the potential value of blockchain applications for businesses. Those who are new to the technology could experiment with one or two opportunities.