How blockchain and the auto industry will fit together

When it comes to cars and blockchains, nobody has all the answers yet. But there is a lot to prepare and to think about – not only in the automotive industry but also in related sectors such as insurance.

First: while we have found interesting examples of blockchain in action, most companies and industries remain in an early stage of exploration and adoption. Anyone who tells you that you understand everything is exaggerated at best. Worse, they may be hunting for snake oil blockchain

[ Where is blockchain making tangible progress? See our related story: Blockchain in action: 5 interesting examples. ]

"At this point, most of the specific potential uses of the blockchain in various sectors are rather speculative and a certain number of years ago, "says Gordon Haff, Red Hat's technological evangelist." What we can do, though, is to think about the kind of uses that play the blockchain's strengths. "

It is very productive to explore areas where, as Haff says, the strong blockchain suits might be a good idea. The automotive industry stands out quickly. Some of its key features and concerns – think of the massive global supply chain, complex licensing, taxation and other regulations, and major security and trust issues – make it a fascinating candidate for blockchain-enabled innovation. .

Haff points to the various entities that must communicate and negotiate with each other to keep cars on the road today – such as manufacturers, insurers, toll authorities, even (increasingly) the vehicles themselves – to spur some forward-looking reflections on how blockchain and The auto industry fit together. Keep in mind that it's the short list of stakeholders and you start to see the potential here.

A new type of car payment

"Payments could be made on the basis of congestion or mileage costs", offers Haff as an example of a blockchain-enabled car transaction. "This could be the case where the distributed trust model and the smart contracts associated with the blockchain are a fact."

The factor in the size of this sector (there were only 253 million passenger vehicles in circulation in the United States alone) 2014) and the evolving nature of transport (think of ride-sharing applications, autonomous driving, IoT and "smart" cars and so on) and the possibilities increase.

We will probably not see a nighttime blockchain revolution in the automotive industry. Haff points out that there will be twenty opposites fueled by a long-standing industry with entrenched players who might be reluctant to buy; considerable government policy and regulatory issues;

"The automotive industry could be unique in the way it combines many other platforms: entertainment, production, monitoring of CO2 emissions, payments and many others."

However, a catalyst for change is that the automotive industry is deeply connected to other sectors in which blockchain technology seems to promise. Marta Piekarska, director of the Hyperledger ecosystem, points out some important ones: supply chain, insurance and payments. And this is not necessarily a complete list. The vehicles we drive and drive go through many more roads than we can achieve.

"The automotive industry could be unique in the way it combines many other platforms: entertainment, production, monitoring of CO2 emissions, payments and many more" he explains.

For Tim Kulp, director of emerging technologies at Mind Over Machines, there are two main categories of possible blockchain cases in the automotive world: making cars and using cars.

With the first, the intriguing uses are more visible in the global supply chain of automobile manufacturers and have significant implications for vehicle safety, vehicle recall and other major problems.

"Just like Walmart's supply chain for products, car manufacturers can track the parts that go into their vehicle Just like Walmart, manufacturers can use blockchain to provide transparency in their supply chain and to track parts from the assembly to the dealership, "says Kulp. "Where Walmart is monitoring contamination problems, automakers could track down faulty parts to identify affected vehicles instead of a general recall."

Even this stuff is not speculative.

"There are several blockchain applications that are already under construction for the automotive industry," says Yael Tamar, founder of the Top of Blockchain consulting firm.

Consider how we use cars, to borrow the verb of Kulp.

Tamar points to the multi-billion dollar journey and ride sharing industry; while family names like Uber and Lyft serve as central authorities on things like racing and payments, some relatives are already trying to destroy disruptions with decentralized, blockchain-based versions of popular services.

Many IoT connections

Automotive the possibilities of blockchain also derive from the intersection of the industry with other emerging trends and technologies. Tamar points to the IoT and to the growing number of IoT devices and applications running in cars and other vehicles. It provides "a large field of IoTs with ability to collect and process data on the blockchain for a variety of data points within the vehicle [then] applied to safety, insurance, fuel economy, accident prevention and much more. " [19659002] [ Can you explain blockchain to non-techies? Read our related story, How to explain blockchain in plain English. ]

That speaks of an underlying truth once the volume on the blockchain buzz is lowered in favor of the examination of its practical uses in existing companies and industries: the value it may be greater in seeking improvements in existing business processes and models than in new and brilliant scenarios.

"By looking at what the members of Hyperledger are doing, I think there is enormous potential to apply blockchain as an improvement to existing systems," says Piekarska.

The example of Red Hat's Haff mentioned above – payments made on the basis of traffic congestion or mileage – is already in play every time you hail a taxi or Uber. But this scenario could be considerably expanded in the blockchain.

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