Before COVID-19 began to steal the limelight, blockchain was one of the latest buzzwords. But as innovative trends expand to incorporate a life wholly dependent on the digital landscape, blockchain is gaining much attention again.

Like cars revolutionized the mobility sector, blockchain is now transforming the automobile industry. We're on the we'rerink of another revolution. According to research by IBM, 62% of automotive executives agree that blockchain will become a disruptive force by 2021. In fact, many manufacturers are already implementing blockchain initiatives into their businesses.

Several auto companies are already using blockchain. The following examples will give you a better idea of the potential behind blockchain and why it’s streit'sening its hold in the auto sector:

Renault uses DLTs (distributed ledger technologies) to create a digitized car maintenance program between OEMs, parts distributors, auto dealers, and mechanics.

With IBM’s colIBM'sation, Ford launched blockchain to ensure that cobalt and other materials are ethically sourced, processed, and traded.

Volkswagen is working on developing a tracking system built on blockchain to prevent odometer fraud.

This is only the tip of the iceberg. Numerous other companies are investing in blockchain-based technology. Let’s take a look at how blockchain is taking a comfortable stance in the automotive sector.

1. Supporting auto payments

The relationship between blockchain and cryptocurrency goes way back. So, if you are looking for ways to buy a car in the the UK, let me tell you it’s quite simple for car payments to be made via crypto transactions through blockchain. The next generation of car owners (Millennials) are already leaders in crypto adoption. A survey conducted in the United Kingdom discovered that 20% of affluent millennials have invested in cryptocurrencies.

And it’s only a matter of time before autonomous vehicles can use blockchain-backed technologies to make payments for tolls, parking, EV charging, car sharing, in-vehicle infotainment services, and much more.

2. Connected and autonomous cars are around the corner

As the popularity and incorporation of IoT and 5G continue to grow, the framework for connected and autonomous automobiles is being laid down. Data collection and processing capabilities on the blockchain will allow a multitude of data from a vehicle and its surroundings to be processed more quickly. The goal is to utilize the latest tech to improve existing processes, including fuel efficiency, accident prevention, route management, etc. 

3. Keeping records and data safe

There'Ase amount of information needs to be protected from hackers. Car history records, auto designs, and ownership documents are examples. However, as connected vehicles become more common, the amount of data that needs to be protected will exponentially increase.

The enhanced encryption level and the inability to implement reverse-engineering tactics make blockchain a perfect place to store data. As a safe and secure platform, information cannot be tampered with.

4. Support smart contracts

The need to share sensitive data about car owners between organizations, such as auto manufacturers, financial institutions, and insurance companies, is part of the trade. Blockchain not only offers a safe platform for storing and sharing information, but it also facilitates the use of digital contracts.

Blockchain technology makes Processes more convenient, efficient, secure, and transparent. For instance, with the aid of intelligent contracts, Tesla owners can automatically pay for tolls as they drive through blockchain-enabled toll booths that support M2M (machine-to-machine) transactions.

5. Supply chain management

Countless parts, from hardware to software, are required in the auto industry. Moreover, the supply chain has numerous phases, including product inception, distribution, trade financing, and retail. So understandably, it’s an iit'sdibly complex and overwhelming task.

However, blockchain can facilitate supply chain management. The technology can offer greater security and compliance adherence depending on where it is used. It can also help expedite the transfer of money between parties. More importantly, the decentralized system supports sharing permission records and reference data through various departments, as well as building trust, transparency, and traceability.

6. Authentication of parts

The availability of counterfeit auto parts remains a global problem. In the US alone, it amounts to $45 billion annually in losses. However, as blockchain technology speeds up, the auto industry will soon reap the rewards.

Creating parts with unique IDs and immutable timestamps will allow blockchain technologies to track them from the day they are manufactured to the final product. By incorporating these ideas into supply chain management, parts registered on the blockchain system will allow companies to track whether changes have been made at any point.

7. Ride-sharing and Car-sharing services

New modes of transportation, such as ride-sharing and car-sharing, are on the rise in the mobility sector. Blockchain can help people acquire various peer-to-peer sharing services through a single registration. As part of a decentralized network, users can access different services and offers.

However, the current concern is protecting identities, personal preferences, and settings. However, with blockchain technologies, secure digital space is available, preventing others from viewing or using this information.

8. Insurance claim processing

Today, filing and processing an insurance claim takes a lot of work. It requires substantial manual documentation and review. Blockchain technologies can streamline processes and expedite payouts. Smart service contracts simplify the financing and execution of repairs and automate payouts.
Final thoughts

The line between reality and imagination is slowly beginning to blur. Technology is presenting auto manufacturers with unlimited opportunities to incorporate emerging trends. And blockchain is opening up a whole new playing field for innovative ideas.

Though we’re notwe'reg to witness a blockchain revolution overnight, the momentum of change has already set the ball rolling. The platform is showing considerable scope for growth. And as blockchain accelerates and streamlines processes, more use cases will arise.

Are you ready for the dawn of this new era in the auto industry?