By Gloria Wu, Chief of Global Ecosystem Partnerships at Ontology
Historically, the automotive industry has always been the most responsive to technological innovation. From crude origins, when Karl Benz patented his Benz Patent-Motorwagen in 1885, to the futuresque, like the smart vision EQ fortwo, the automobile industry has been consistently adapted to cater for the demands of an evolving market. Technology is redefining the way we build, deploy, and maintain our vehicles, with sustainable sources of energy beginning to supersede the internal combustion engine.
At the same time, autonomous technologies are also making an indelible mark on the automotive industry. Consumers are becoming increasingly open to relinquishing control of their vehicles to an independent and interactive navigation system. Of course, this opens the doors for wider service integration, as the driving experience becomes increasingly personalized, incorporating aspects of the smartphone revolution into the automotive industry. Indeed, smart dashboards have already made their way into the market.
Closely intertwined with increased autonomy and a more personalized driving experience is the need to preserve data privacy and control. The exponential growth of the intelligence, connectivity, and data banks of our machines requires we match these developments with equally innovative security solutions. Blockchain applications have the capability to meet these demands, delivering secure, sophisticated, and decentralized solutions that will underpin emerging technologies in the automotive and mobility industry.
The future of the automotive industry
With mounting concern for climate change, pressure on car manufacturers to deploy more advanced methods of reducing carbon emissions could drive the price of car ownership upwards. Attitudes to car ownership are also undergoing a generational shift, with millennials demonstrating a higher predisposition to the idea of ride sharing. In addition to this, considering that reports show that most cars in the world spend 95% of their time idle, ride-sharing could potentially take cars off the road and alleviate traffic congestion globally.
This should not be interpreted as bad news for the automotive industry. As one of the most responsive industries to technological innovation, this actually presents a huge opportunity for companies to more effectively allocate human and vehicle resources. This opportunity will emerge from the Internet of Things (IoT), in that car subscription services will perpetuate the shift to increased interconnectivity of our devices, going far beyond the benefit of alleviating traffic pressure.
As an example, a shared service automotive industry would be in a prime position to feed information to insurance providers in a more efficient manner, monitoring individual behaviors and adjusting premiums accordingly. This would also have implications on other mandatory information associated with the use of automobiles, such as tax, and extending as far as predictive updates on car maintenance and driving conditions.
Privacy and automotive applications in the smart car era
Relying on a blockchain mechanism eliminates any need for the administration of a central authority, facilitating peer-to-peer data-sharing protocols on an immutable ledger. For a car subscription service, such as that provided by Car2Go, storing this data on a decentralized ledger would enable the effective communication between vehicles, without infringing on the individual privacy of its users.
IoT connectivity will also facilitate car sharing services that allow individual vehicle owners to lease out their motors to tenants, with frequent transferral of control rights between users. The primary point of failure for this type of car sharing scheme under a centralized authority would be the lack of mutual trust, in that no single administrative entity could practically manage the influx of data in a safe and secure manner. Employing blockchain and smart contracts, a decentralized car-sharing scheme could deliver the requisite level of trust needed to circumvent this single-point of failure.
Results from this paper demonstrated the utility of blockchain-based applications in providing fast, secure, and accurate transmission of data in vehicle-to-vehicle communications. Computational tests indicated the viability of a blockchain-based IoT system in providing these solutions, circumventing the main issues surrounding security, centralization, and privacy.
Replacing the untrusted third-party would require the implementation of several base stations within a wide geographical region, providing a secure platform upon which vehicles can interact with their owners, sub-lessees, and the network manager. Daimler Mobility AG, one of the world’s leading automotive manufacturers, intends on transforming the driving experience in this way. In fact, this report contains several reconstructions run to test the feasibility of a scheme of this nature.
Driving the industry forward
In 2018, an IBM study found that 62% of auto executives foresaw that blockchain would disrupt industry within three years. Now, as we approach 2021, this prediction appears to ring true. Currently, the Decentralized Autonomous Vehicle (DAV) Foundation is leveraging blockchain tech to introduce a decentralized ride-hailing service. The DAV’s open source platform is available to anyone hoping to create connected car applications.
Other emerging trends such as digital payments in automotive solutions, personalized experiences, and diverse service integrations are also beginning to pick up speed. The global automotive industry is undergoing major changes, and technology is responding to demographics, regulatory rules, and environmental pressures. By 2025, cars and the world around them will look different.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.