From investors at Wall Street to technologists at Silicon Valley – the trending topic of blockchain to revolutionize everything is on everyone’s lips. In fact, experts predict the blockchain market to reach around $20 billion by the year 2024. Simply put, the blockchain industry is booming – and not at all limited to cryptocurrency and banking only.
What is blockchain?
A blockchain is defined as the database that records every digital transaction of goods and services – precisely as it happens. Take for instance the example of spreadsheets that run on millions of computers. The participants can see all the transactions that are being made without a middleman.
The blockchain system is similar and beneficial to many sectors especially banks and technology-related. In fact, statistics show that banks can save up to $8 – 12 billion annually if they utilize the blockchain technology.
Today, more and more industries are testing the blockchain technology to maintain their current and competitive hold in the industry – and of course to provide their consumers with a more efficient and transparent system. This also includes the automotive industry that is known to experiment with the new technology. It is prevalent for them to advance to keep up with the growing demands of their customers.
Connected cars – the future of vehicle industry
According to industry experts, by 2020 we will see more than 250 million connected cars on the road – worldwide. Several leading automobile companies have brought out their versions of connected vehicles on the streets while pioneers such as Nissan and Ford are also expected to bring out their models by the coming year.
However, the automotive industry is not only eyeing the implementation of smart sensors, 5-G connectivity, and smart city experiences. They are also anticipating an innovative and transformative technology called “blockchain.”
Advantages of blockchain for the connected car industry
Just like any other industry, the blockchain technology is bringing a host of benefits to the car industry. Some of them include:
• Enhanced security
• Cost reduction
• More transparency
• The ability to audit records
• Ease of access to payments, insurance, and other data
Blockchain and connected cars – the interaction
Here we shall discuss some reasons why the auto industry should adopt the blockchain technology.
The blockchain technology provides a secured platform for storing and sharing data. With blockchain, it is nearly impossible for intruders to add, remove, or alter data. Once the data is stored in the block – an extra layer of security is added to the system for protection. In fact, experts at CSIRO, University of New South Wales and Virtual Vehicle Research Center suggest implementing blockchain to all connected cars – not just as an option but also as a necessity.
As the popularity of connected cars increases, the need for security will be more significant – thus implementing blockchain technology should be made a priority.
Auto-insurance companies have introduced the usage-based insurance policy that estimates the premium according to the user’s driving behaviors. For example, Toyota works explicitly according to usage-based insurance by implementing blockchain technology to their advanced vehicles. The benefits of insurance are not new to any but having a pay-as-you-drive or pay-how-you-drive model is beneficial for those looking to lower the insurance costs and speed up the payment process.
Experts also claim that the usage-based insurance policy will be more preferred shortly. According to Frost and Sullivan, the usage-based insurance policy is expected to be obtained by approximately 100 million drivers by 2020 with Italy, UK, and the USA leading the fort.
More transparency amongst stakeholders
The decentralized capability of blockchain makes sharing of data easy and convenient for all the stakeholders. Just as we explained in the spreadsheet example above – the centralized data holding system of blockchain provides equal access to all the participants. Without the blockchain system, the data is usually managed by a single party who might choose to manipulate information. However, the chance of tampering reduces with blockchain as all authorized parties have equal access to data.
Since all parties have access to information on the blockchain database, all share the burden and expenses related to the system. In fact, the blockchain reduces the need for expensive backup servers and storage system.
The automotive industry is complex and somewhat complicated. Numerous suppliers, as well as dealers, are part of the thriving industry. The blockchain technology enables the companies to secure all the related information regarding the organizations associated with the company.
Crypto-currencies such as Bitcoin, Lite coin, and Ethereum are all working on blockchain technology. These are not the only popular mode of payments nowadays but also profitable for the investors. Companies such as AT&T are exploring in-vehicle payments through these digital currencies while others have introduced Car eWallet that allows drivers to make payments on the go. Still others like the AutoBlock make it possible for sellers to trade their car for cryptocurrencies.
Blockchain will enable drivers to make payments for toll, car sharing, and even car servicing without any hassle. These payments will be made securely and will provide a seamless route for all associated with the automobile industry.
The Internet of Things
The Internet of Things is popular and fast becoming the norm in all industries. The automotive industry is no exception. Today, smart sensors equipped in vehicles and on roads provide users with data regarding traffic and directions. With blockchain, the information will reach drivers more quickly and give the drivers a warning of stalled highways and even damaged ones.
We are all aware that the connected car industry is rapidly evolving. However, to succeed in the marketplace, it has to face a few challenges that will allow the technology to show solutions that will work. With time, the technology will surely get over the glitches and make a name for itself in the competitive and thriving industry. In the meanwhile, if you want to buy any car, visit car dealers in your locale, as they may be able to guide you better.
Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs.