Most enterprises leverage the potential of blockchain technology. Its achievements are beyond our words, including facilitating secure transactions, record-keeping, and bypassing loads of paperwork in traditional systems.
Blockchain penetration into the automotive industry is also an example. In many ways, the benefits of the automotive industry in blockchain are is at the forefront of solving problems in the automotive sector.
Automakers can exploit blockchain technology more than any other technology The number of fully connected, automated, and electronic vehicles is increasing daily. It needs an advanced database to store the data processes. And blockchain technology is shaping up to be the answer.
If you are an automaker and want to integrate your business with blockchain technology in the automotive sector, check out our blockchain development services today.
The significant challenges that every automotive industry faces today.
Every new technology comes with challenges. The blockchain in automotive sector, which is at the forefront of innovative ideas, is facing many challenges today. What are they? Let's see how to solve it through this blog post.
A market filled with counterfeit spare parts
Before a vehicle hits the market, its fake spare parts hit the market. Spare parts come in a variety of styles and prices. And it influences the customers a lot, and that’s how many fake spare parts manufacturers enter the market. These spare parts not only affect the money loss of original brands but also pose safety issues for the passenger, and affect the brand image in the industry.
The invention of autonomous and connected cars
Autonomous vehicles are a new wave in the automotive industry. The more advanced these are, the more data they generate. We are obliged to manage, store and analyze that data, only then can we ensure data security.
Vehicle History Tracking System
Once the sold-out vehicles leave the dealerships and any defects are reported, there is no effective means of tracking and recalling them. This makes the recall process time-consuming and more concerning. The lack of a proper tracking system also raises the probability of fraud in the used automobile and difficulty to track since the vehicle and ownership history are not readily available.
Car Sharing
Carsharing is becoming a crucial factor in determining the future of the transportation sector. Car sharing services are growing in popularity as owning a car is becoming more expensive than sharing. Even though few car-sharing services are exist,, they have many limitations and drawbacks. Shared vehicles failed to respond to smartphone identification keys, a big factor that hampered car-sharing services.
Insurance Frauds
The number of insurance frauds in the auto industry is increasing day by day and is becoming very common. People submit false insurance claims or multiple claims, which often go undetected, costing auto insurance companies a lot of money. As an auto insurance company, it is the best way to integrate your business with blockchain technology with the help of a blockchain development company.
Blockchain and its Benefits
With the advent of Bitcoin in 2009, the world of technology became aware of blockchain, a public distributed ledger. Bitcoin's success has spawned many other cryptocurrencies. With this, business giants have started implementing blockchain technology in many sectors of their businesses.
Here are the few major benefits of blockchain technology:
Decentralization
Security
Trust
Transparency
Immutability
Cost reduction
Let's discuss how blockchain technology solves the major issues in the automotive industry through its three use cases.
Three Blockchain Use cases Transform the Automotive Industry
Financial tools have great value here, this area requires more trust, and blockchain technology can be declared a financial instrument. Blockchain in automotive can be successfully implemented to handle payments across the automotive industry.
Here are 3 ways blockchain in automotive has become a disruptor and driver of adoption in the automotive industry.
1. Car Manufacturers & Vehicle Sellers
2. Ridesharing & Carsharing Services
3. Integration With Other Technology
Constructing & Selling Vehicles
Operational transparency is a significant problem facing vehicle manufacturers and sellers these days. With the implementation of blockchain technology in the automotive industry, it is possible to facilitate safe & secure payments and track down them with blockchain development services.
In the automotive industry, the transparency provided by distributed ledgers can help ensure that manufacturing, shipping, and suppliers see the same supply chain, making it nearly impossible to add counterfeit parts to the automotive industry.
Two ways to implement blockchain technology for auto manufacturers and sellers.
Implement a blockchain-based supply-chain system
Many of the automaker leads are deploying blockchain-based supply chain systems In their automotive industry for secure and reliable transactions and tracking down the vehicle parts, raw materials, and fuels for the gas stations.
Legendary automakers such as BMW, Mercedes-Benz, and General Motors have already implemented these kinds of solutions to their problems. They all have shown the best results in adding transparency and traceability to the movements of vehicle parts and finances.
Enhance your current system with a blockchain-based service
You can leverage a blockchain as a database to store your important data and ensure that no critical documents are lost. Most of your contracts can be automated through smart contracts.
Ridesharing & Carsharing
Since sharing other people's data is the fastest path to autonomous driving, automakers may soon leverage blockchain to share all localization data as securely as possible. This data is cryptographically secured, so only authorized parties can access it in real time.
The risk of fraud is the biggest challenge for providers and recipients of mobility services. Smart contracts tackle the issue smoothly and the blockchain can create financial contracts that bind these two parties, which will be executed with a guarantee after all contract conditions are met & satisfied.
Automotive companies use smart contracts to automate many processes such as rental app submission and payments. A blockchain can store an immutable copy of all rental histories, which could be useful in investigations of car accidents or insurance claims.
Integration with other technology
What else can you connect to blockchain other than smart contracts? Besides smart contracts, you can integrate blockchain with other technologies. Integrate the blockchain with the Internet of Things (IoT), where passengers and drivers can benefit from faster service delivery.
The features of blockchain don't end here, you can use the potential of blockchain for toll road payments, online purchasing, etc. Integrating blockchain with other technologies allowed us to automate and speed up blockchain-based payments.
Final Words
Booming blockchain technology presents a real opportunity for automakers that put down their current inefficient business practices and do new, more efficient businesses. There are already some interesting blockchain developments in the automotive industry. But when major automakers began exploring blockchain's potential use cases, they quickly recognized compliance as a promising area.
