6 Ways Blockchain is Changing the Automotive Industry
It is a widely-held belief that blockchain is the future of the financial sector. However, an overwhelming proportion of the public associates it with only cryptocurrencies such as bitcoin.
Indeed, cryptocurrencies are the biggest reason why blockchain became immensely popular globally, but it isn’t the only application of blockchain. Instead, it is one of the many applications of blockchain.
Currently, blockchain technology is playing a critical role in revolutionizing several industries and businesses, and the automotive industry is one of them.
Leading auto manufacturers had long been desperate to give up on conventional practices and embrace new techniques. However,they didn’t have any tool that could aid them to materialize this objective.
In comes blockchain and turns the table dramatically.To help you learn more, here is how the digital ledger is inspiring changes in the automotive industry:
Helping to manufacture driver-friendly cars
Picture this; you are relaxing in the house, and your boss summons you at the last minute to attend an urgent meeting. You are all set to rush to the office but can’t find the car keys. It doesn’t sound very pleasant.
Losing your car key is a common agony that we all suffer. Talking about British drivers, nearly 16 million of them lose car keys regularly.Worst, most of them don’t have a spare key.
Now imagine how much money is being wasted due to this mishap.It is where blockchain can make a lot of difference.
Blockchain takes car keys out of the equation. You have to insert a private code to lock and unlock the unit. At the same time, granting car access to friends and family members also becomes quite convenient.
For example, if your colleague has forgotten their documents in the car, you can unlock the car for them using a mobile application from a distant location. Not having physical keys also makes it more difficult for a carjacker to steal your vehicle.
Smooth financial transaction
The present technology is helpful when it comes to making automated financial transactions.All of us can pay a rental fee or refuel our car using a credit card. In these transactions, you have to act as an intermediary during the process.
This is what blockchain technology is going to change. The transactions made with blockchain will be faster, cheaper, and more secure. It allows the money to be distributed across different nodes which removes the need for the transaction data to be processed and stored by a third party
The application of blockchain in the automotive industry will enable buyers to buy cars with bitcoin. Moreover, they can make other payments like parking fees, insurance fees, and other car-related expenses through secure blockchain means.
Another benefit of payment through blockchain would be that consumers will own a smart contract with terms and conditions already being negotiated.
Every time they buy goods or services for their car, a receipt will automatically become a part of payment history so that transparency is not compromised.
Streamlining car insurance
Over time, the prices of cars have reduced, and the manufacturers have launched cheaper car models to make automobiles more accessible.
However,owning a car incurs significant expenses. Sometimes repairing a car could break your bank if it is not backed by insurance coverage. That is why car insurance has become inevitable for every automobile owner.
The traditional way of obtaining car insurance coverage invites several hurdles. In other words, the process is physically as well as mentally demanding. Blockchain technology can save you from all these hassles. It will not only automate filing claims but also settle them rapidly.
Blockchain technology is equally beneficial for the insurance companies. They can track the actual condition of the car before it meets an accident and thereby identifying fraudulent claims with ease.
On top of that, the smart contract will streamline all the data. So the clients will not have to hire the services of a middleman, which would eventually lead to cheaper insurance coverage.
Facilitates car sharing
It refers to the concept of more than one person using a single car between them. Though car sharing is prevalent in our society, it requires additional transparency. The automotive industry has cracked this issue with the help of blockchain technology.
For example, in the future, we might see a group of 10 people possessing only five cars. One partner could ask for car access from another partner at any time. As mentioned earlier, a mobile application may be used for the purpose.
Every ride would be registered against the person’s account. That way,uncertainty regarding the payment won’t creep in.Undoubtedly, car sharing could not be any fairer than this.
Paperless authentication of cars
There is no denying the fact that modern-day cars are rife with the latest features. However, they still have some of the baggage from the last century that they must get-off, like the need for physically carrying the documents of a car.
It is assumed that blockchain could potentially mark the ending of this exercise. With blockchain, one can digitally confirm the ownership of the car. So much so, transferring the ownership might be done on in a breeze.
It will also make the job of law enforcement agencies easier as they will have to spend less time authenticating that legal owner of the automobile.
Blockchain ensures the transparent purchase of second-hand cars
Buying a second-hand car can be an uphill task, especially if you are doing it for the first time. There is a simple reason behind it. Sellers want to milk out as much money from buyers as possible. Resultantly, in many cases, they roll back the odometer.
Again, blockchain has the potential to keep you safe from such frauds and deceits. Blockchain’s data is permanent. If you are skeptical about the number of miles a car has traveled, you can immediately dive into the blockchain to confirm the claim of the selling party.
Key takeaway
Over the years, the automotive industry has progressed and advanced massively. It is doing everything to live up to the expectations of the consumers.But some shortcomings are still to be addressed.
Blockchain technology can play a crucial role in fixing these problems and give a new direction to the automotive industry.
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