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Now, in 2018, all indicators are showing us that the automotive industry will soon be more than just an industry about vehicles. Self-driving cars are not just a part of the imagination, many companies are working on it, and soon such cars will become available to general public. Cars will communicate with each other and exchange information about the weather and traffic status. The truth is that automotive industry is changing, and blockchain will make a significant impact on that change. Believe me, the blockchain will be the next big thing, and it will not skip the automotive industry.

Most of the general public thinks that blockchain technology is only used in the financial sector, but that is far from the truth. Bitcoin is just one example of using blockchain technology, that use case is not the only one. In this article we will try to make an overview of the development of blockchain technology and its use cases that will change the automotive industry.

Porsche introduces blockchain to cars

Leading companies all around the world are trying to stay on top of the technology development. The automotive industry is not any different and these days they are testing blockchain technology.

Porsche praises themselves as the first company in the industry that tested an implementation of blockchain into their systems. In February they announced, on their official blog, that in collaboration with Berlin-based start-up XAIN they are testing blockchain applications directly in vehicles. According to them, that makes them the first automobile manufactured that implemented and successfully tested blockchain in a car.

Transactions made on the blockchain are secure and can be processed faster than anything. The services developed on top of the blockchain are fast and very secure. The vehicle becomes a part of the blockchain and communicates with it directly. Porsche was testing an application that includes locking and unlocking the vehicle through the blockchain. That enables every car owner to temporary give someone access to their car. Besides that, it takes only 1.6 sec to unlock a car via this app. So, the process of opening and closing the car via this app is up to six times faster than ever before. Also, log data about unlocking/locking the vehicle is written on blockchain and no one can modify that data, so it will always be possible to check who unlocked the car at some moment. Because of cryptographic encryption all activities are securely documented in the blockchain. For example, owner of a vehicle can monitor the status of his car and grant access remotely via the mobile app.

Renault is leveraging blockchain technology for a while

In July 2017, Renault announced a prototype for a digital car maintenance book by using blockchain technology. The goal of this project is to enable their customers to save all vehicle information in a streamlined, tamper-proof, and secure digital car maintenance book.

The problem that exists today is that information about customers and their vehicles is spread across many systems such as those maintained by automakers, insurers, repair shops etc. By using blockchain technology it’s possible to gather all information in one place accessible by the customer.

According to Renault announcement blog post, if an owner wants to sell a vehicle to another person, information about the history of the vehicle would be more transparent by authorizing the potential buyer to access all important information in the digital car maintenance book on the blockchain. That way more trust between the buyer and the seller will be created.

They were doing this in collaboration with strong partners such as Microsoft who provided access to the Microsoft Azure Blockchain technology platform for this purpose.

According to them, this will not be the only use case of using blockchain technology. They said that they will look for further use cases, including vehicle-based micro transactions.

“Beyond this project, this technology will be a major step forward for connected vehicles and the micro-transactions and security requirements associated with them” Renault

Daimler AG became a Hyperledger member

In February 2017. Daimler AG, famous by their brand Mercedes-Benz, joined Hyperledger organization as their premium member. Hyperledger is a collaborative cross-industry effort created to advance blockchain technology. More than 200 companies all around the globe already joined this association. Some of them are CISCO, American Express, Airbus, Intel, IBM etc.

According to hyperledger announcement, Daimler’s focus is on future-oriented topics and the continuation of a systematical optimization of its core business, so it’s logical for them to start taking advantage of blockchain technology.

“Being a part of Hyperledger allows us to collaborate with a global network of experts in order to build the cross-industry blockchain standard, for customers, supply chain, digital services, financial services and financing tools,” said Kurt Schäfer, Head of Treasury at Daimler AG

CarVertical wants to make car history more transparent

This startup is working on blockchain-based solution which solves a problem with nonexisting transparency about car history. They believe that data about car history currently existing in various registers and databases (manufactures, certified workshops, insurance companies etc.) is owned by the car owner, as stated in the EU and US regulations, but that is just in theory. In practice, the car owner doesn’t own that data at all.

Maybe distribution of that data in various databases would not be a problem if data was publicly available, but it’s not. You can only get a small part of it, for a significant fee. So, who can be sure about car history? Only the first owner can be sure, and every other owner can’t be sure about the info that he has.

If we consider that every car has on average 3 to 5 owners during its lifetime, it’s clear that 80% of car owners don’t know anything about their cars. If you want to buy a used car which has changed a few owners already, there is a big chance that the car has troubled history. Maybe someone clocked its odometer to hide the true mileage; airbag deployments can be hidden as well. Also, the car might have an accident logged at the insurance company, but since data from insurance registry is never public you will never find out if the car had fatal problems before.

So carVertical raised 15 000 Eth in their token sale to create a platform where everything about car history will be logged on the blockchain, and no one will ever be able to manipulate and fake the data. The team said they will gather as much information about car history as possible, from different sources, and put it into the blockchain registry. That way if you want to buy a used car you will always be able to check car’s history, and since it’s on blockchain you are sure that no one has manipulated its mileage, accidents, etc.

What might the future bring us?

Let’s imagine a world where everything is on the blockchain. When you buy a car, you get a token that represents a physical car. The owner of the token would be the owner of a car, so if you want to sell a car to someone else you will have to send them your token as well. Also, you will have to use the token to unlock the car. That way, you would be the only one person that could use the car.

When you go to a repair shop or some other institution to do something on a car, it would be logged on the blockchain so all history of what was happening with the car would be on the blockchain.

If you want to sell your car, a potential new owner will be able to check all history about the car. Data will be more transparent and available to the potential customer. The time where everyone tries to manipulate the data just to sell a car would be behind us. With blockchain we will be able to get proof that the car is in the condition claimed by the owner.

We all know that blockchain is immutable so no one can modify the data; there is no intermediate and all data is transparent. Those things might improve not only automotive industry but also any other industry. The industry is huge and we are sure big players will start to use blockchain very soon. Some of them already do, as shown in first paragraphs with examples from Porsche and Renault.

Thank you for reading. If you think we forgot to mention some impressive project on this topic, please let us know in comments below, and we will update the article.

 

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Alen is the CEO of a digital agency Async Labs based in Croatia, EU. Strong focus on blockchain development and product management. You can reach him on Twitter @ahuskano for any business inquiries.

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