Blockchain And Automotive Industry: An Introduction
We are all hearing the buzz about blockchain, Web3, and crypto, but have you heard about blockchain and automobile industry? Blockchain is the next big revolution on the internet. Web3 and blockchain have already started transforming the way most industries are working.
Does this make you curious about how Web 3 and blockchain technology impact the Automotive industry and cars?
In this blog, we will discuss what is about to come for Automotives with blockchain Web3.
As the discussion about blockchain and Web3 is still hot and young there are very few resources available around the idea. This is an attempt to share what is found in easy-to-understand terms. According to a Forbes article, Web3 is not clearly defined yet.
Blockchain technology is directly related with:
What is block chain
In simplest terms, it is an interlinked chain of blocks. Each block contains some data. It also has a hash value (consider it as a fingerprint identity of the block). Each block is also linked with its previous block. Thus a given block has two hash values, it’s own & of its previous block
Recommended read: Blockchain And Automotive Industry: An Introduction
Let us dive in by understanding… What is Web3?
To understand blockchain, we need to understand Web3, let’s take a quick look at Web1.0 and Web2.0.
Web 1.0 was the basic version of the internet where the internet was read-only. Like a library where you could only read what was available and where you can’t share any inputs. This was before 2004.
Then came the era of Web2.0. In Web2.0 you read and write. For example, you could consume a video on YouTube and you can upload it as well. You can consume the data from channels like Facebook and share comments and post your content. But the content you wrote, shared, uploaded, or published was not completely yours. It is part of the platform you published it on.
The data you share on Web2.0 is controlled by corporations and the government, it is centralized.
Now let us talk about Web3. The data on web 3 is stored in the form of blocks. These blocks form a chain and are interconnected. They are not in one particular central place. They are distributed and thus, decentralized. There is no one body taking control of your data in Web3.
In Web3, you read – write – and own your data. The data on web 2.0 is accessible by the government and organizations. But in Web3 the data is encrypted and stored. The data can be accessed only by people who have permission to do so.
So what’s all the buzz about?
Blockchain acts as a distributed ledger, open to its users. Once any data is recorded, it becomes very difficult to change it. Because if we change the data in a block. the hash value also changes.
And if the hash value changes, that block no more remains the same block and all the subsequent blocks become invalid. This is one of the reasons why blockchain is considered secured
Blockchain is a decentralized system. It uses peer to peer network. The chain is open to its users, Each user has the same copy of the chain. If someone creates a new block, each user then verifies that block to make sure it’s legit
If everything is good, then the block enters the chain of all the users. If any malicious activity is found, the block gets rejected. This method improves the security a lot
What is Decentralisation?
Decentralization is the process of distributing power away from a centralized authority.
With the evolution of Web3, we will have a more decentralized online experience, allowing people to take control of their data and information.
Decentralization is having a major impact on the Automotive industry. Self-driving cars are an area where decentralization is coming into play.
What is DAO?
DAO, or Decentralized Autonomous Organization, is a new type of organization that is powered by blockchain technology or Web3. DAO is different from traditional organizations because it does not have a centralized authority or management structure.
Instead, it is governed by code that is written on the blockchain. This code is executed by smart contracts, which are programs that run on Web3.
Again, DAO is also different from traditional organizations because it is decentralized. It is not controlled by any one person or organization. It is controlled by individuals using it.
How Web 3 is making an impact on the world and different industries
The impact of Web3 on the world will be inclined at making things transparent and user-centric.
Here are some of the advantages of Web3
Pro-Privacy and Anti-Monopoly
Web3 will put a brake on a monopoly over the data. The decentralization would result in increased privacy. The users will be about to control if their data and privacy are accessible to others.
Web 3 will be a lot safer than Web2.0. It would be almost impossible to hack through Web3 due to decentralization. Even if someone does penetrate, it would be traceable. As all the activities on Web3 and blockchain are traceable.
With Blockchain-powered Web3, the end-users will have complete ownership of data. Data will be totally encrypted. Users will be able to decide if they grant permissions to access it for any reasons like advertising etc.
Web 3 features would allow access to data across multiple applications. You don’t need to be on any specific platform. You don’t have to worry about a single device being accessible to Web3 while other devices can’t.
Web 3 blockchain will not have a central authority. Anyone will be able to join the network and participate in it by creating an address. This will eliminate the occurrence of users getting barred on any kind of bais. It will also make it possible for digital assets and wealth to be transferred cross-border in a time and cost-efficient manner.
Let's look at the connection between blockchain and automobile industry
The Automotive industry is in the midst of a revolution, and web3 is playing a big role in it.
Secure and Safe Autonomous Cars
The internet of things, or the interconnectedness of physical objects and devices, is making its way into cars. This means that your car will soon be able to communicate with other devices, like your smartphone or your home computer.
Your car will be able to track your location and send you information about traffic conditions, weather, and more. It will also be able to automatically update you on maintenance needs and recall information.
This level of connectivity is made possible by web 3. Web3 is built on decentralized technologies like blockchain that make data more secure and efficient. Having the complete autonomous car system of older versions of the internet makes it more vulnerable to cyber security threats.
The smart contracts that Blockchain offers could benefit the automotive industry immensely.
These can be used to track the ownerships of the cars and the auto spare parts of the cars as well. There could be a complete data about the ownership, from owner to owner. It can help in maintaining transparency, prevent thefts and many other illegal activities.
When we talk about the blockchain, we can’t ignore the metaverse. As metaverse is growing to its peak, it is going to help Automotive industry to a great extent.
Metaverse is a shared online space. It is virtual reality. It’s like social media but instead of just liking a picture or commenting on it, you can virtually meet the person or go to that particular place and experience it as you’d see reality.
Web 3 and metaverse will help in demonstrating the interiors of the car and other specific details, virtually. This might tranform the automotive sales structure.
The Authenticity of Car parts
The Web3 and the blockchain work on tokens and codes for every different entity. This makes things one of a kind and prevents fake and fraudulent duplications.
The automotive industry will benefit from Web3 and blockchain in tracking the provenance of auto parts and OEM parts. It would help in ensuring that the parts are genuine and high quality
Payments and transactions
The web3 and blockchain have an immense impact on how we look at finances and payments. With the application of Web3, the payments required would be more secure and transparent.
As the blockchain integrates well with other existing technologies like IoT, it would transactions at parking spots, tolls, and other expenses in regard to Automotives very seamless.
So the question is, is it useful in the Automotive industry?
We can use blockchain technology to create a virtual interconnected network of vehicles. A vehicle can be assigned a unique identity within this network. That car can communicate with other vehicles
We can also create a virtual twin of a physical vehicle. This can facilitate payments/ transactions that eliminate the requirement of a 3rd party assurer. Vehicles can report accidents in real-time
Vehicles can communicate speed, location, the direction of travel, braking, intention and more…
How is Blockchain helping Automotive industry
- Blockchain technology is set to revolutionise the Automotive industry.
- Blockchain is a digital ledger that can be used to record transactions and track assets.
- Automakers are using blockchain to develop new ways of tracking vehicles and improving supply chain management.
- Blockchain can also be used to create new business models, such as peer-to-peer car sharing.
- Ultimately, blockchain will help to make the Automotive industry more efficient and transparent.
- Blockchain is a digital ledger that records transactions between two parties in a secure, tamper-proof way.
- The automotive industry is using blockchain to track the provenance of parts and components, helping to ensure that they are genuine and not counterfeit.
- Blockchain can also be used to track mileage and service history, making it easier for buyers to check a car’s history before purchase.
- In the future, blockchain may also be used to help automatically verify insurance claims and process payments.
- Overall, blockchain is helping to improve transparency and trust in the Automotive industry.
The Automotive industry is just beginning to scratch the surface of what blockchain can do. But it’s clear that this technology is going to change the way we drive forever.
There are countless applications that would be explored as the industry understands and adapts to the technology.
We will talk more about blockchain & new technologies. So keep watching this space
Blockchain and Metaverse are closely related to each other, as both the new technologies are being heavily getting invested by new many big brands. Find out about Automobiles in the Metaverse
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