Blockchain technology is already having a massive impact on the automotive industry. From manufacturing to insurance, and many more potential applications, blockchain is changing the industry for the better. Along with immutable data, so-called ‘smart contracts’ is changing the way we experience vehicle ownership. Here are 5 ways in which blockchain technology is reshaping what it means to own, buy, and sell a car.
Transfer of ownership
Changing vehicle ownership has always been a long, tedious process. It involves filling out multiple paper documents, approval from a numerous people and going through many processes. This not only takes a long time, but also opens up registration to human error, or worse, fraud or manipulation of data. With so many steps in the process, it also costs a lot. Blockchain makes all of this quicker, easier and safer.
Blockchain technology is all digital, which means there are no more cumbersome forms to fill out or paper records to search for. All the information is available and easily accessible. Smart contracts allow this information to be authenticated by the relevant people. The data is always available, making ownership transfer on future vehicle purchases even easier.
Chain of trust
Blockchain makes it easy to check a vehicle’s true history. Once data is entered into a blockchain, it becomes immutable, which means it can’t be changed. This eliminates data tampering and manipulation, and greatly reduces the risk of fraud. In fact, since access to data is tracked, attempts to change data can be traced to the individual trying to make the changes. All of these features creates a chain of trust that ensures that vehicle data remains accurate.
Ownership exchange apps
The potential of blockchain technology streamlining the transfer of vehicle ownership is still in its infancy, however, there are already a couple of apps that tap into the tech’s potential. Credit card company, VISA’s DocuSign transaction app, and VINchain’s vehicle history app are two of the most noteworthy of these apps.
By using blockchain to simplify transactions, VISA is making it easier for consumers to buy or lease cars with its DocuSign app. The app creates smart contracts on a blockchain that eliminates intermediaries and writes purchase and lease agreements onto the blockchain, while keeping the identities of the parties involved anonymous. This allows authorities to evaluate and approve the contracts, and thus when a purchase or lease occurs, all the relevant parties have to do is sign the agreement.
VINchain on the other hand, makes the selling of vehicles, especially used vehicles, easier by providing accurate, in-depth reports on the history of these vehicles. The company’s app uses an on-board diagnostic device that plugs directly into a vehicle and records data such as fuel economy, service history, driving habits, and wear and tear on parts. Vehicle owners and providers are rewarded for adding data to the chain, creating an incentive to create a detailed database if information that can be called upon during the vehicle sales process.
Blockchain blocks theft
Blockchain can also be used as a theft deterrent. Once a purchase or lease agreement has been signed, a smart contract can be created to allow only certain drivers access to the vehicle on cars with automated entry systems. Even if entry is forced, the vehicle will not operate unless the driver has access. Should there by forced entry and an attempt is made to drive the car, authorities can automatically be alerted, providing them with information such as make and model, plate number and exact location of the vehicle. This does not mean a vehicle can never be stolen, but it will certainly delay the process and serve as a major deterrent.
Pay as you go
Blockchain technology can be used to pay for everything from fuel to tolls to repairs to insurance-as-you-drive, on-board entertainment and more. A blockchain signature can be used to identify a vehicle and make payments via linked accounts. The secure nature of blockchain technology means that only authorized vendors and providers will be able to charge vehicle owners. Apps like VINchain that records vehicle data can notify drivers when repairs are imminent, reducing cost of repairs in the long run.
All of these blockchain-enabled features and uses make car ownership a breeze, and ultimately adds to the value of vehicles. However, these only scratch the surface of the technology’s potential and it will continue to make vehicle ownership simpler and more enjoyable.