Blockchain technology is one of the most revolutionary modern technologies today. Its conception in 2008 has been revolutionary, disrupting the finance landscape and giving rise to a number of possibilities in the healthcare sector. It has even given those in real estate a new platform which is secure, efficient and overall better than any other model on the market. Best of all, this technology came free.
The decentralised nature of blockchain means that it is ideal for application in various circumstances. We have seen a great deal of success with the ongoing evolution of blockchain technology, and it is a surge of success that only continues to grow, especially in manufacturing, distribution, public sector and infrastructure. The sector with the highest market value is the financial sector which sits at 60.5% and is worth $2.7bn with the numbers expected to skyrocket into 2023.
This technological innovation was originally designed as the framework for the now globally renowned cryptocurrency Bitcoin, but has since expanded to be successfully utilised in many different avenues across the board. The highly adaptive technology is invading new industries on a daily basis, and it’s no surprise to find it in automotive. Blockchain is revolutionizing the automotive industry in multiple ways, from supply chain management to novated leasing and even going so far as to affect change at its roots.
For years now, the automotive industry has dealt with an influx of counterfeit car parts issues. Counterfeit car parts are a monumental problem for this global industry and the consequential market. In fact, counterfeit car parts are expected to cost the automotive industry and drivers as a whole around $45 billion dollars a year. The damage that the counterfeit industry is doing directly affects driver and passenger safety as there is no way of guaranteeing that these counterfeit products are manufactured in the same way as their authentic counterparts.
That is a ridiculous amount of damage that is constantly happening. Thankfully, there are solutions being created and trialled to work towards mitigating this issue. Blockchain happens to be one of the strongest solutions in progress out there today.
Car parts are registered on a blockchain system when they are manufactured and added to the global supply chain. Once the car parts are registered, companies are able to simply trace the provenance of the car part in question, as well as setting in motion an immutable status of the car part that officiates its authenticity. Further, the utilisation of blockchain in this way essentially gives companies the capability to track any and all changes in the custody of the car part at any point.
This is useful because if a car part has not been registered and proven to be authentic in its creation, then manufacturers and automotive companies can easily find out that the car part in question is not usable as they receive and go over the inventory after its arrival. Essentially, the idea is that this will stop counterfeit car parts from being installed in vehicles and potentially causing harm. Given how interconnected and tech-addicted society is today, this is a seemingly simple application of just one form of technology which is able to make a huge difference in protecting lives and the livelihood of car part manufacturers.
This particular application of blockchain technology has been tremendously successful in playing a key role in solving issues surrounding constant car parts (and even entire vehicle) recalls, consumer safety, and fake products. While of course blockchain cannot ensure that every single part will always work exactly as it should, it will mitigate the issues caused in vehicles by counterfeit car parts. With 5-6% of the global market being made up from counterfeit goods, countermeasures need to be taken to combat the repercussions of these fake products. This seamless transaction of information between various parties is able to enhance the supply chain, by sharing logistics, information and pricing, alongside payments with the relevant parties. Another aspect that blockchain has improved is vehicle maintenance. Based on the data from the vehicle, your workshop and supplies will be notified what needs replacing or serviced.
The past three years have seen a growth of the implementation of blockchain technology in many sectors within an industry. The automotive industry does not just benefit from the authentication of spare parts, it has even invaded the management of ownership and payment. According to reports, new owners can make micro-payments based on how often they use the vehicle and ownership can be broken down into fractions which is helpful in mitigating cost especially in low income families.
Digital contracts are also an improvement over the old model, with sensitive information being shared securely with the new car owner, the car company, financial institutions and insurance. Aside from that, title transfer has become much more convenient, secure and efficient thanks to blockchain technology as a secure line of information will be fed to relevant parties with full transparency.
The rise of the digital age has come hand in hand with many great technological innovations. One of the most prolific and highly successful of these technological innovations to date is blockchain. Decentralised in nature, blockchain is a modern technological tracking and security platform with a framework that can be applied to many different circumstances across varying industries but an issue arises when you consider just how much data will be stored on blockchain, a decentralized computer. When compared to the best centralized cloud storage providers available today, blockchain still has a long way to go before it achieves the same storage and speed capabilities it will need if it hopes to fully transform the auto industry.
While counterfeit car parts are still a massive problem for the automotive industry around the world, and causing America to lose out on $45 billion annually, it is slowly being phased with due diligence thanks to blockchain. The technology will continue to improve the dissemination of information, create a more secure platform for all industries and reshape digital data as we know it.
