The auto industry is turning to blockchain to help manage a huge, complex ecosystem for the benefit of manufacturers, consumers and other market participants.
The automotive industry is enormous. It consists not just of new car manufacturers, but a lifecycle industry that is valued at over $1.8 trillion annually in the U.S. and Europe. This includes highly disparate sectors and actors like sales, after-market spare parts, car insurance, auto finance and auto repair.
By definition, integrating processes within these segregated and often very different industries and shop level operators is difficult. Especially at a time when the industry itself is changing. The number of new units is starting to equal the number of used cars sold annually every year. Ridership and ownership are changing too. In the future, with IoT and driverless cars, this entire process will become even more difficult to manage without a blockchain engine or two to coordinate things. Not to mention validate very disparate processes from widely dispersed parties in an environment where lack of trust, particularly in the secondary car market is another industry reality if not endemic.
That said, once adopted, blockchain offers the opportunity to create an ecosystem uniting these market participants, increase efficiency, streamline the processes and of course, drop costs while increasing trust.
There are a lot of both big and small players now moving into this space.
IBM recently launched a partnership with ZF Friedrichshafen and UBS Bank to study the automation of payments for future electric and autonomous vehicles.
But they are not the only ones, and already far from the first.
VLB plans to use blockchain technology to cut costs and inefficiencies in the auto industry for both commercial participants and individuals.
The benefits for all participants are dramatic, especially in a world where car ownership and use is changing.
By using the VLB system, car owners obtain access to better prices for repairs, maintenance, and insurance. They also have access to crucial information about second-hand vehicles registered on the platform that they might wish to purchase (including repair and accident history).
Commercial car users (including companies and fleets) will have access to cheaper rates for leasing and rental, lower car sharing partnership fees and will find it is easier to set up their businesses in the first place. Passengers who use the service will also find they have access to cheaper rides and better-maintained vehicles.
Commercial participants will also see multiple advantages to utilizing VLB’s platform. Producers and distributors will be better able to track supply chains of parts, better prevent fraud, particularly in the counterfeit spare parts market, and have far better transparency over monitoring and honoring warranties.
Insurance companies will benefit too, and in several ways. Not only will their claim management be dramatically streamlined and much cheaper, but they can offer precise, customer-oriented pricing for customized policies and have improved oversight over quality and pricing for repairs.
The question is not, in other words, why use blockchain in the auto industry. It is why is anyone waiting? VLB, for one, is not. In fact, they have already launched CarFix to great success. This successful car-repair platform and community is a perfect staging ground for the next step.
VLB’s CarFix network already consists of 10 spare parts distributors, more than 500 repair shops, with 50,000 customers and 250,000 repair jobs already performed via the launched CarFix platform.
The platform is designed to be used by all car industry participants. They will use the VLB platform to both record and obtain the data they need.
Those who own data will pay small fractions of the system token – the VLB – to record and broadcast information on the blockchain via VLB “Fuel” (similar to Ethereum’s gas). In return, they will receive payments in larger amounts of VLB tokens for access to such data from those who want to obtain it. Data consumers are anyone who needs this kind of information. They might include a consumer researching their next new car, or an insurer underwriting a claim. This exchange will be accomplished via smart contract.
Data owners will be incentivized to produce complete data which may be cross-referenced by groups or individuals searching for a complete history of a vehicle’s lifecycle.
The Lifecycle blockchain will be fully implemented within a community of industry participants, including those who are already participating in VLB’s CarFix network.
Each entry will be validated before it is entered onto the blockchain by going through a four-step validation process that includes:
Counterparty identification: Verification will be performed by independent third parties
Node identity confirmation: Identification of each participant will ensure data integrity. A mechanic shop cannot issue an insurance policy or claims adjustment.
Cross-identity acceptability: Participants will be verified by a number of factors including their previous history
Proof of payment: Participants have to pay to register this information. This is the final arbiter of both “truth” and identity in the system.
It all sounds very cool in concept, but what kinds of use cases could this be implemented for and who specifically would benefit?
New car owners: A person buys a new car. The car manufacturer has registered the vehicle on the VLB system. This information is also made available to the bank and insurer who set up the paperwork for the car loan. The car purchase will also be settled by smart contract, as will down payment and monthly payments into the future, which could also be automatically linked to the owner’s bank account.
Existing car owners who need repairs: Each time a car needs repairs, not only can owners find participating mechanics via the platform, but all the information about the repairs can be recorded and tracked via the VLB system. This also creates an immutable record of repairs and part numbers used along with mileage of the vehicle and the identity of the mechanic and the supplier of the spare parts.
Used Car Buyers: Used car consumers can check the vehicle history via the blockchained record on the VLB platform. No more guesswork. No more risk. The entire history of the car has been recorded on a trustless network.
Token name: VLB
Token base: ERC-20
Token supply: 175 million tokens
Token sale target: $12 million
Token sale date: Public pre-sale is February 5 – March 12, 2018 ((30% Discount)
Token price: 1 ETH = 650 VLB