Blockchain in the Automotive Industry

What is Blockchain?

A blockchain is a digitally distributed, decentralized, public ledger that exists across a network. A block in a Blockchain consists of 3 major components,

1. Data – Information to be communicated
2. Hash – Original Unique Identifier
3. Previous Hash – If the Block is changed, then the mapping of the previous block Hash value

The key aspect of Block Chain technology is

• It is a Decentralized system. This means there is no single unique database to store information
• It shows the history of data
• Copies of Blockchain are available in every node and updated everywhere too ensuring that the information is secured

Automotive Industry 4.0

Industry 4.0 has both expanded the possibilities of digital transformation in automotive and increased its importance to the original equipment manufacturer, suppliers, dealers, captive finance organization and other working in the mobility ecosystem. The race of making cars smarter with features like autonomous driving, connected vehicle, subscription-based features etc, brings the urgency and necessity of data security for OEMS. A conventional setup of Vehicle data management is prone to hacking, unauthorized modification, loss of traceability and more. Blockchain can be viewed as a potential solution to these challenges.

Potential areas for Blockchain implementation

Supply Chain: Blockchain can enable more transparent and accurate end-to-end tracking in the supply chain. Organizations can digitize physical assets and create a decentralized immutable record of all transactions, making it possible to track assets from production to delivery or used by end user. This increased supply chain transparency provides more visibility to both businesses and consumers.

Requirement Management: With more and more software components getting introduced as part of digitizing cars, it is important to use Blockchain, in maintaining the integrity of requirements for both customer safety and regulatory compliance.

IOT: Next generation cars are more like computers on wheels, talking / sharing the data continuously to the manufacturers and other service providers. Using Blockchain this data can be transmitted in a more secured way, decreasing the chances of hacking. The idea of making vehicles lighter and cheaper, allows engineers to implant Sensors, replacing conventional wiring and cables within the car. Blockchain can help in data transfer within these sensors and make vehicles more secure from the outside world.

Customer Information: Instead of storing the PII, financial and private records in a database, using Blockchain will help store all this information in a more secured and readily accessible platform.

Regulatory Audits: Blockchain maintains the historical information, making it easier for auditors to trace the changes and audit the data right to its source.

Financial Services: Cryptocurrencies are getting more traction with the Industry 4.0 evolution, hence to keep up with the pace of technology, the Auto industry will be aligning its financial services like Auto loans and Insurance to support the new ecosystem. Bitcoin plays a crucial role in the integrity of Crypto Currencies.

– Asim Patangia

Lead Business Consultant-Pega Practice