Blockchain in the Automotive Industry Is Coming
You’ve been told that blockchain technology is a synonym for Bitcoin and other cryptocurrencies; that it’s a dark web thing that produced the nefarious Silk Road.
Equating anything blockchain to the automotive industry carries an ominous and foreboding tone.
It shouldn’t. Blockchain technology might be a structure shared by cryptocurrency, but it’s far from being anything wicked. It’s a method of decentralizing information to maintain or enhance its integrity.
One source explains it this way: “Simply put, a blockchain is a type of distributed ledger or decentralized database that keeps continuously updated digital records of who owns what… When a digital transaction is carried out, it is grouped together in a cryptographically protected block with other transactions that have occurred in the last 10 minutes and sent out to the entire network.”
It’s not easy to understand at first glance, but there is one certain thing: these transactions are incredibly secure. Because the information is contained in no single, centralized location, it is not susceptible to hacking or altering.
The security factor is perhaps the singular most important reason that blockchain technology will come to the automotive industry.
Blockchain Benefits in Automotive
IBM has recognized and detailed five important aspects where blockchain technology will impact the automotive industry.
Between logistical transport, inventory levels, and order placement, blockchain technology will ensure accuracy and transparency at never-before-seen levels.
Current models of payment for parts suppliers and manufacturers can take weeks or months to complete, held up at various checks and balances. In a blockchain system, payments can securely be completed in minutes or hours, alleviating the financial strain on suppliers who carry millions of dollars in burden.
Vehicle history information and automotive finance details can be confirmed and secured in real time. It can also provide accurate diagnostic information for service personnel.
Vehicle and Brand Experience
Over time, blockchain technology in connected cars can help manufacturers customize the driving experience for car owners. It could be pre-emptively adjusting seat and steering positions, setting the radio station, or even reserve the right vehicle for car rentals and subscription services as driver habits are recorded.
Replacement Parts and Warranty
Warranty information is simple to track. Any changes, such as total loss vehicles or extended warranty registrations, are complete in real time instead of days or weeks after the fact. The blockchain ledger has a record of each car part’s origin, assuring accurate replacement part ordering and precision-recall notification.
Blockchain technology is coming down the pipeline, and it’s best to have an overview of how it works right now.
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