Crypto is objectively dead. It had a good run but the huge bubble just popped.
It turns out cryptocurrency is no better than tulips, beanie babies, or a fidget spinner… Of course, the honest truth is: all of this has been said countless times. (446 times to be exact)
Cryptocurrency isn’t going anywhere; and the only thing that’s “dead” are the companies who choose not to opt into blockchain technology.
According to research published by BlockData, 81 of the top 100 companies in the world are actively developing blockchain products, while Microsoft, Amazon, Nvidia, J.P. Morgan, Walmart, Alibaba, PayPal, and Google are among the 27 companies with live blockchain projects.
At this point, you either get with the times or fade out into obscurity.
“If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.” -Satoshi Nakamoto, the Creator of Bitcoin
This leads us to how crypto will impact our industry: Auto.
The auto industry is ripe for blockchain disruption. From manufacturing to sales and leasing, the blockchain can be used in a myriad of ways to improve efficiencies and reduce costs. In this article, we will explore four use cases that auto dealers and manufacturers will benefit from blockchain tech.
Use Case #One: Supply Chain Management
The blockchain can be used to create a decentralized and transparent supply chain management system. This would allow all parties in the supply chain to have visibility into the status of parts and components. It would also reduce the need for paper-based documentation, which is often lost or misplaced.
For instance, in China with the help of a cryptocurrency called “VeChain” manufacturers are able to spot exactly where there’s a problem in the supply chain.
VeChain uses smart chips (with built-in RFID technology, QR codes and NFC chips) to produce data on the blockchain. Every time a code is scanned it produces a block.
It makes the supply chain transparent down to the last detail.
Since 2015, VeChain has partnered with Travela, Walmart of China, H&M, BMW, and joined China’s Animal Health and Safety Reliance, to name a few. There’s even a potential Salesforce partnership at play. And in terms of regulations, VeChain is one of the few cryptocurrencies that is endorsed by the Chinese government.
Walmart of China has used VeChain to bolster its traceability on a large scale. They even allow customers to scan desired products and acquire detailed information including geographic location, product inspection, logistics process, and much more. As for BMW, they will use VeChain’s blockchain product as soon as it’s ready for launch.
Thanks to blockchain, our supply chains can hopefully avoid the negative outcomes from events like the Ever Given disaster or COVID-19’s impact on the auto industry.
Use Case #Two: Data Storage
The blockchain can be used to store data in a secure and decentralized manner. This would allow for data to be stored immutably and without the need for a third-party storage provider.
Currently, the auto industry relies heavily on centralized data storage providers such as Amazon Web Services (AWS) and Microsoft Azure. However, these providers are not without their flaws.
In 2015, AWS experienced a major outage that took down many popular websites and services. In 2016, Azure had a similar issue that affected customers in Europe. And just last year, AWS was hit with a data leak that exposed the personal information of over 14 million people.
“In the long run, decentralized currencies are more secure and faster. To date, no one has hacked Bitcoin or Ethereum’s core networks.” – Matthew Gonzalez, Web 3 Auto Expert
These outages and data leaks are a direct result of the centralized nature of these storage providers. If the auto industry were to move to a blockchain-based storage solution, it would be much less susceptible to these types of issues.
Bitcoin and Ethereum have never been hacked. It’s virtually impossible. There are computers all around the world supporting these networks- also known as “cryptocurrency miners” – making the Bitcoin and Ethereum blockchains the Fort Knox of data storage.
“Decentralization” is what Bitcoin and Ethereum are selling. And this isn’t just a libertarian movement to get back at the Orwellian nature of big tech (although it can be that, too), blockchain is going to be more secure and technologically advanced than our current data networks. It’s inevitable.
Use Case #Three: Metaverse in the Auto Industry
The Metaverse is a decentralized virtual world that runs on the blockchain. It is a network of virtual worlds that are interconnected and can be used for a variety of purposes, such as online gaming, social networking, e-commerce, and much more.
In the auto industry, the Metaverse can be used for things like virtual test drives, virtual showrooms, and even virtual car customizations.
Virtual test drives would allow potential customers to experience a car before they purchase it. This would be especially useful for luxury and performance cars, as it would give the customer a chance to see if the car is right for them.
Recently, major auto company Hyundai launched its first metaverse experience “Hyundai Mobility Adventure,” which was hosted on Roblox, a platform with 43.2 million daily users. Users were able to interact with engineers, learn more about the vehicles, and have a far more interactive car buying experience just from the comfort of their homes.
Additionally, virtual showrooms would allow customers to browse a dealership’s inventory in a more immersive, fun way. They would be able to see all the available cars, as well as get more information about each one.
This isn’t even mentioning the world of non-fungible tokens (NFTs). Arizona-based car auction house Barrett-Jackson sold four NFTs last year for charity in March: the first 2021 Ford Mustang Mach 1 (which sold for over $500,000), a 2021 two-door Ford Bronco, a first-edition 2022 GMC Hummer EV, and a 2021 Ram 1500 TRX Launch Edition. The NFTs represented digital ownership for the cars (something that we may see integrated into deed/title ownership in the future).
Of course, none of this can replace the real feeling of a virtual test drive or showing, but a massive opportunity lies in increasing convenience and decreasing friction during the customer’s journey to purchase.
Use Case #Four: Smart Contracts in Auto
Smart contracts are self-executing contracts that are stored on the blockchain. They can be used for a variety of purposes, such as escrow services, voting, and much more.
In the auto industry, smart contracts can be used for things like financing, leasing, insurance, and even car sharing.
Financing with a smart contract would allow for a more transparent and secure process. The terms of the loan would be stored on the blockchain, and the payments would be automatically deducted from the buyer’s wallet. This would reduce the chances of fraud and would make the process a lot smoother.
When it comes to leasing, blockchain has even more potential. With a system that tracks cars right from the factory floor and allows for instant verification of ownership through tracking their every move-including repairs or maintenance history -you can bet there will be less fraud than ever before!
Lastly, there’s insurance. With blockchain insurance policies could be stored on the blockchain, and the payments would be automatically deducted from the buyer’s wallet. This would allow for a more transparent and secure process overall.
As you can see, the blockchain has a lot of potential in the auto industry. We here at Leasly are excited about the possibilities and will continue to explore ways to use this innovative technology.
We know that we can count on our customers to be just as progressive as us and are looking forward to seeing what the future of car leasing holds.
Are you ready for the blockchain revolution?