Blockchain Technology Will Change the Car Industry: Here’s Why

While Bitcoin was the world’s first real-world example of a blockchain, the underlying technology is now being used throughout the economy in ways that extend far beyond cryptocurrency. A key advantage of blockchain technology is that it is decentralised, which makes it almost impossible to hack as long as the user base is sufficiently large. Thus, a blockchain provides a trusted source of information that is accessible to everyone.

So how will this tie into the future of the automotive industry? Here are a few examples of the role blockchain will play:

Ride-sharing and on-demand mobility

In the previous post, we predicted that by 2050, you will be able to leave your apartment and hail a self-driving car within minutes using a smartphone app. This type of mobility service will dramatically reduce the number of privately owned cars on the road, meaning that far less space will need to be devoted to parking cars that are not in use.

This all sounds interesting and exciting, but it also raises a number of questions. How will you unlock the vehicle? How can you pay for all the associated costs such as rental, insurance, toll-road fees and road tax in a fast and efficient way?

Toyota has teamed up with Dallas-based blockchain start-up Oaken Innovations to provide a solution. They have created a system that enables customers, fleet managers, vehicle manufacturers, insurance companies and governmental bodies to share data securely on a blockchain network. In practice, this would mean that once you hail an autonomous vehicle, you could open it using a digital key and any fees for insurance, tolls and road tax would automatically be paid without any paperwork or bureaucracy. While doing this using a traditional centralized server would pose severe security risks, blockchain makes it possible to share this data securely.

Insurance

Currently, insurance policies are somewhat similar to flat-rate mobile phone contracts: no matter how much or little you use your phone, you still pay the same monthly fee. However, surely somebody who only drives occasionally poses less of an insurance risk than someone who drives every day? This is why some car insurance policies could move from a contract model towards more of a “pay-as-you-go” model, which would involve no fixed insurance costs and a small fee for each trip instead.

This would be a particularly useful system for people who do not own their own cars but travel in a variety of rental vehicles depending on their circumstances. With the pay-as-you-go model you would pay a lower rate if the vehicle represents a lower insurance risk. A collaboration between Aioi Nissay Dowa Insurance Services and Toyota has resulted in a blockchain-based system that can collect information about a driver’s mileage, location and driving style and securely share it with an insurance company.

Logbook / parts tracking

Currently, every car usually comes with a paper logbook detailing the service history of the vehicle. These documents are not particularly detailed and are relatively easy to forge. By creating a digital logbook and placing this information on a blockchain, it would instantly make fraud almost impossible while making the information potentially easier to access for third parties such as maintenance garages or car auction websites. CarVertical, for example, is building the “world’s first global and decentralized car history registry built on blockchain”.

Similarly, a blockchain-based registry of spare parts could help maintenance garages, car manufacturers and customers to trace the origin of spare parts so that all parties would know exactly when and where the components were manufactured.

Investment in classic cars and supercars

Even in the mobility age of the future when most people will travel in shared, autonomous vehicles, there will still always be a market for classic and luxury cars. In fact, when the vast majority of cars on the road become electric or even hydrogen powered, this is likely only to increase the mystique and cachet of the magnificent petrol cars of the past such as Ferrari, Aston Martin, Rolls Royce and Mercedes.

As an asset class, the collectable car market has outperformed the S&P 500, gold and many other indices since 2008. Traditionally, however, the market has only really been open to wealthy investors because in order to get into the market, you need to be able to purchase a vehicle outright and the most exclusive and lucrative vehicles often cost hundreds of thousands of dollars. For example, although the exclusive Ferrari F12tdf more than doubled in value in 8 months, to have benefited, you would have needed to be able to afford the initial purchase price of $450,000.

This is another market that is being transformed by blockchain technology. Curio Invest is using blockchain technology to create vehicle “tokens” that represent a share of the value of a collectable car. By purchasing these tokens, investors gain the chance to profit if the value of the vehicle increases. As you can purchase tokens for as little as $500, this essentially means that even the most exclusive cars are now available for everyone to invest in.

Click here to register to invest in a Ferrari F12tdf on Curio.

Originally published at www.landing.curioinvest.com.