Automotive blockchain is causing a stir but experts are endorsing a balance of excitement and scepticism to prevent businesses getting carried away.
Many in the fleet industry are excited about blockchain’s potential – especially for applications such as vehicle registration, insurance, supply chain management, finance and fleet management – but others advise forethought.
A recent panel discussion at AutoMobility in Los Angeles highlighted some of the differences with experts on the one hand urging caution and the need for a proper examination of clear business value and others advocating that everyone embrace it.
What is Blockchain?
Blockchain is a shared digital ledger, stored on a centralised distributed network – a data tree if you like. It’s easy to monitor and highly secure. Nothing can be altered without the consensus of the network. In fleet management applications, alongside the fleet manager, those involved in a blockchain transaction could include: financial institutions, customs agents, government regulators, brokers and drivers.
For fleets, blockchain promises better productivity and efficiency. Fleet managers could deploy the technology to improve asset utilisation, security, data accuracy, visibility and so on.
What sort of fleet applications could blockchain be used for?
Some of the applications blockchain could be utilised for are: fleet maintenance, enhanced security, visibility and data accuracy, transportation and reducing inefficiencies.
In terms of fleet maintenance, the blockchain enabled supplier chains of the future will mean that fleets know everything about a vehicle from the second it rolls off the assembly line and this will stay with it through its lifecycle – every oil change, warranty repair, parts replacement and so on would be visible.
Contracts, transfer of documents, safety of transferred items, driver security, management of parts and asset tracking could all become easier and more secure through new applications built around blockchain.
In terms of efficiency, this is particularly relevant for commercial fleets (LCVs and HGVs) where demand for their services can be better matched to supply – no more empty or half empty vans or trucks under-utilising the roads.
The problems with Blockchain
However, there are problems. Blockchain is expensive to implement and demands huge amounts of server power to prevent latency and cope with the vast number of transactions demanded by applications.
250 million connected vehicles are expected to be driving on roads across the globe by 2020 and with 20 million connected devices around the world doubling every few years, there is potentially a large role for blockchain to play in protecting transactions or pushing over-the-air updates from automakers to suppliers.
As with any new technology, there will always be the early adopters who are able to push the boundaries of it and be part of its early evolution until it becomes mainstream. Blockchain is no different. What is different, however, is that in this case the automotive industry can learn from the trials of the crypto-currency players and start off with a more mature platform. Only time will tell if it really will reach its automotive potential.