The hidden power of blockchain in the supply chain – Technology
United States: The hidden power of blockchain in the supply chain
To print this article, simply register or connect to Mondaq.com.
Blockchain technology, better known as the distributed ledger platform that powers Bitcoin and other cryptocurrencies, has several potential applications for the automotive industry. Trends in automated and autonomous driving are changing the way original equipment manufacturers (OEMs) collect and store data. The disjointed nature of automotive production across geographies, time zones and a myriad of suppliers creates challenges for OEMs hoping to satisfy increasingly discerning consumers accustomed to online shopping and same day delivery.
Some features of blockchain technology offer solutions to these automotive industry challenges:
- Real-time auto parts authentication with blockchain-based supply chain management systems
- Confidence-free communication throughout the supply chain with full transparency for all parties
- Accurate parts and repair tracking allowing much more targeted recalls and less disruption to unaffected parts
- Fast and secure digital payments for leasing, financing, maintenance and other automated procedures
These unique features of blockchain technology can be combined with other technologies to form automotive specific use cases. The combination of large computing and the ability to share trustless access to network information could enable the secure sharing of vehicle data between manufacturers, dealers and owners while providing the basis for vehicle communication networks. autonomous. The location of storage nodes and the nature of the information shared will have privacy implications in jurisdictions with protections for personally identifiable information. Integrating IOT devices, such as radio frequency identification (RFID) tags, into an automated supply chain could allow for greater transparency between OEMs, suppliers and resellers, as well as instant authentication of customers. parts and checking parts availability. Combining artificial intelligence algorithms with real-time engine data could result in more and better location-based services.
Sharing these use cases with fleet providers, insurance companies and other third-party providers opens up a world of possibilities for personalized services and digital payment options. Specifically, distributed ledger technology could provide the tracking and payment infrastructure that enables authorized monetization of diagnostic and infotainment big data from today’s connected vehicles. Basic maintenance and usage data is available for owners, dealers or third parties to facilitate simple repairs. Blockchain storage of a car’s parts inventory would allow the immediate shipment of a verified replacement part to a local dealership within seconds of a part malfunction report. Sharing driving behavior data with fleet managers or insurance companies could enable usage-based pricing and incentives. Finally, payments for services or options could be settled instantly in real time via smart digital payments based on contracts between owners, drivers, service providers and OEMs. Sharing data among such a wide range of participants will force the industry to rethink data anonymization and how it shares or disclaims responsibility for automotive data used collectively by industry.
While most automakers are engaged in their own blockchain research, a number of industry players have launched the Mobility Open Blockchain Initiative (MOBI) to collaborate on automotive blockchain work. BMW, General Motors, Ford and Renault were among the early members working in collaboration with major blockchain and tech startups, such as manufacturers Bosch and ZF, major service providers Accenture and IBM, and organizations focused on the Consensys and Hyperledger blockchain. Participants also include researchers and scientists from academic institutions and NGOs. The group’s goal is to generate a common system and an application programming interface to enable payments and data sharing between cars. The result could be a new digital mobility system offering services ranging from carpooling to autonomous vehicles, with innovations in between.
While many automotive blockchain projects are in their infancy, early progress seems to indicate that there is still a lot to come. The rapid growth of decentralized finance, which has grown from less than $ 1 billion to almost $ 20 billion in total locked-in value in 2020, and reaching new all-time highs for Bitcoin and Ethereum in early 2021 is expected. continue to attract attention. to this fascinating technology. The rise in fintech applications for blockchain and cryptocurrency has given rise to several recent regulatory proposals in the United States, including efforts to subject certain cryptocurrencies to banking regulation. The Financial Crimes Enforcement Network (FinCen) and the Office of the Comptroller of the Currency (OCC) also provided insight into the application of anti-money laundering and KYC regulations to digital payments and the ability of banks to interact. with cryptocurrencies backed by fiat currencies. While the application of new digital payment rules would certainly apply to digital payment enablers in the automotive space, the automotive industry does not appear to face a burden that cannot be addressed with a traditional payment risk analysis. . Indeed, the new payments regulations seem designed to further facilitate innovation rather than hamper new developments.
There has been an exponential increase in the use of blockchain technology in automobiles over the past few years, and the pace of innovation will only increase. Initiatives endorsed by multiple OEMs are more likely to be successful than stand-alone projects, but with the number of automotive use cases growing so rapidly, it will likely be some time before the winners and losers are apparent. . As technology evolves, Blockchain consortia need to keep abreast of legislative and regulatory developments to ensure that promising blockchain innovation, especially in the payments arena, is not hampered by regulation targeting the more volatile area of cryptocurrency.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
POPULAR POSTS ON: US Technology