Blockchain in Automotive Industry
Blockchain technology is the backbone of cryptocurrencies. The tokenization that turns blockchain into a valuable commodity isn’t a necessary step in the process. Even without this step, blockchain is a way to securely and efficiently record and transfer data. As a result, it’s turning up in a lot of places other than cryptocurrencies.
One of the industries where blockchain is just starting to make headway is in the automotive industry.
GM and Honda Working on Blockchain Tracking of Energy Usage
As vehicle makers explore the future of electric vehicles, energy use is a constant topic. While many are concerned about the cars’ use of electricity, technologists at GM and Honda are reportedly taking a different route.
In some cases, future electric cars may be able to return excess energy to the electrical grid. Through a platform currently in development, blockchain would track these exchanges and reimburse motorists accordingly.
Using Blockchain to Track Rare Minerals in Production Lines
Blockchain is a tool for keeping information safe but it’s also a tool for keeping information accurate. That’s why Ford recently joined a partnership with other big companies including IBM and LG. They’re working on creating a method of using blockchain to ensure that cobalt is ethically mined.
Cobalt is a high-demand but rare mineral. The process for mining it is often done in dangerous and exploitative ways. Without having complete ownership over their supply chains, it was difficult for manufacturers to ensure that the cobalt in their products was sourced ethically and sustainably.
By using blockchain technology to track cobalt from ore to finished product, companies can be sure that they are using materials that were sourced honestly.
The Distributed Ledger: Developing Supply Chains and Building Customer Credit
For the last couple of use cases, we’re going to be looking at Daimler. The company behind Mercedes Benz is the most blockchain-focused company that we could find. Some of the solutions coming out of their “Blockchain Factory” are already being implemented while others are still just ideas.
One of blockchain’s big claims to fame is the distributed ledger that allows any number of users access to the information simultaneously. Technologists at Daimler are currently looking at ways to take a process similar to the cobalt model above and apply it to their entire supply chain. This could create a multi-faceted and real-time ledger of the company’s resource consumption.
Another potential application of this would be information sharing between companies. Daimler probably wouldn’t want competitors to have access to their supply chain as described above. However, Dr. Harry Behrens, the head of the Blockchain Factory, said in a 2019 interview that there is information that could be more widely shared. The example that he gave was information on a consumer’s credit and driving history that would allow them to easily rent vehicles.
Microtransactions as Part of a Future Car Renting Platform
Renting vehicles brings up another quality of blockchain and cryptocurrencies that Behrens said may come in handy one day. That’s the microtransaction.
Between being able to accurately and securely record and transfer data and the ability of cryptocurrencies to be easily and inexpensively transferred in small volumes, the technology may one day be ideal for vehicle renters. Behrens even said that Daimler may one day tokenize in part to launch a blockchain-based car rental platform.
BMW, GM, and Ford Look at Blockchain Payments
While Daimler is looking at how blockchain could make payments between a renter and the company, other auto groups are reportedly looking at how blockchain can be used to pay everyone else. BMW, GM, and Ford are reportedly part of a consortium looking at using blockchain in cars to automatically facilitate transactions between drivers and third-parties like toll booths.
The Technology of the Future Today
While some of the blockchain solutions in the automotive industry discussed above are already being implemented, others are still a thing of the future. However, many of the solutions discussed above also encourage collaboration between automotive companies, insurers, payment companies etc. Hopefully, that will also mean faster adoption.
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