City and Transportation

Here’s how the blockchain is changing the automotive industry

17 July 2018 | Written by Andrea Geremicca

Many automotive companies are starting to use the blockchain technology to manage the incredible amount of data accumulated by cars and vehicles. Here are some of the latest blockchain applications in this area.

The modern car is the perfect combination of mechanics and electronics on four wheels: over the years, and thanks to the acceleration and democratization of some technologies, the cars, while maintaining their external appearance, have become powerful computers on wheels, capable of creating, integrating and analyzing lots of data.

Today’s machines are complex computer products connected to the Internet: they are able to analyze daily 4,000GB of data, to drive autonomously, to make instant decisions without the help or the intervention of human beings, but most importantly they are an incredible source of data and consequently they represent risks and opportunities for car manufacturers all over the world.

In the next few years, we will see millions of Internet-connected cars traveling on the roads all over the world. Each car will have more or less 200 sensors that will collect information on road conditions, traffic, the car itself and the driver’s behavior and preferences. According to INTEL, self-driving cars in the coming years will create data that is significantly higher than what could create 3 billion people.

Privacy, security and in general the management of these data have become the top priority for all the companies in the automotive sector and today the most accredited solution seems to be one: the blockchain.

Smart Mobility and Blockchain are the protagonists of an announced marriage. No real surprise here, there are many automotive companies who have already started investing in this technology, even creating a global organization that gathers all the most important automotive companies in the world: MOBI, Mobility Open Blockchain Initiative.

So, what are the possible applications of blockchain in this sector?

A first example of the use of the blockchain was recently imagined by Renault. The French manufacturer is working on a car maintenance software that will use the blockchain as a shared ledger, to record in one place all the history of car repairs and maintenance, but also its real status, in case you decide to sell it. Many of the information related to the history of a car are written, in fact, on paper and for this reason BigChainDB, a company that deals with blockchain databases, is developing an application called CarPass in an attempt to centralize all the information of the car. The pass, saved in blockchain, would include information about the property, the various service providers you have chosen, previous damage, maintenance and inspection history. Having access to the telemetry data, we could in fact extend this register indefinitely.

In the future, your car may warn you of any problems and contact authorized dealers directly for an on demand check, buy spare parts and pay for them, or even activate the insurance by providing the necessary data.

A similar scenario could greatly simplify the life of insurances: it would be enough, in fact, to connect to the data of the car (which using the blockchain could not be tampered with) to know exactly what (and if) happened and when.

Oaken Innovation, a blockchain technology company applied to the IoT, the Internet of Things, recently demonstrated the possible creation of a toll booth with a blockchain in which Tesla cars can automatically pay as they pass through the toll booths, since both (car and toll) can use the Ethereum platform, using smart contracts to validate a machine-to-machine transaction.

Not many people can afford to buy a car in cash in one solution: many choose long-term rentals or loans of various kinds. Regardless of the solution adopted, there are a number of mandatory financial steps that serve to demonstrate your financial health, the source of your funds and the soundness of your sources of income. All this could be done very quickly through the Blockchain and many companies are already working on it. For example, in India the Ministry of Transport has created an incubator for startups that deal with blockchain only, and exclusively in the sector of financing for the automotive sector.

The supply chain sector, that takes care of the logistic resources of the companies, is also implementing the first applications of the blockchain. The vehicles’ supply chain, in particular, is incredibly complex, composed of hardware components, software and firmware sellers, distributors, retailers, regulatory agencies, insurance companies and so high. Blockchain-based technologies can be applied to each of these stages of the assembly line (precisely, the supply chain) by improving the sharing in the various steps and thus improving communication and data security.

These “use cases” are just a little taste of what could be done in this sector with the blockchain, but there are some obstacles to consider: the scalability of this technology, the different regulations from state to state and the very low standardization are, in fact, significant impediments for the entire market. To make this technology an extraordinary commercial resource, it will be necessary for the huge number of protagonists of the global automotive market to adopt it everywhere, in order to make it systemic and therefore really useful. This is one of the reasons why we are seeing industrial alliances grow like never before.

Andrea Geremicca
Andrea Geremicca


Since 2014 he has been part of the Organizing team of TEDx Roma and a visiting professor and mentor at John Cabot University. Andrea writes in his articles the impacts of exponential technologies on our society.

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