Blockchain technology refers to a decentralized database that stores data in blocks that are chained together. The newly generated data is stored in a fresh block. After a block is filled with data, it is linked to the previous block, thereby enabling the storage of data in a chronological order. Since decentralized blockchains are immutable, data entered in blocks are reversible and cannot be accessed through unfair means, as it is extremely difficult to go back and alter the contents unless a consensus is attained among the majority.
Owing to the high security offered by the blockchain technology, it is being increasingly adopted by the automobile industry, as huge volumes of data are produced in this sector. Moreover, the real-time monitoring, scalability of information, and auditability offered by this technology will also strengthen the automotive blockchain market in the coming years. In recent years, the blockchain technology has become an integral part of the information technology (IT) domain of the automobile sector. This technology is being used in mobility solutions, internet of things (IoT), connected cars, retailing and leasing, supply chain logistics, and autonomous driving applications.
In recent years, numerous participants in the automobile ecosystem have been formulating policies and forming consortiums to comply with the mandatory international regulations. In the coming years, the blockchain technology will facilitate digital transformation in the automobile industry, as the rising adoption of connected cars and autonomous vehicles will lead to the generation of high volumes of data. Currently, the financial divisions of the automobile companies are exploring the potential of the technology for financial applications, whereas, in the coming years, they are expected to use this technology in other applications as well.
At present, companies operating in the automotive blockchain market, such as Microsoft Corporation, BigchainDB GmbH, Productive Edge LLC, XAIN AG, IBM Corporation, ShiftMobility Inc., Oaken Innovations, Ripple Labs Inc., Tech Mahindra Ltd., Mesosphere Inc., Project Provenance Ltd., Factom Inc., Helbiz Mobility System PTE Ltd., Ethereum, Context Labs BV, carVertical, ConsenSys, and Accenture PLC, are offering advanced solutions to automakers to meet the rising customer demand. Moreover, the evolving operating models in various automotive functional areas and increased use of data for improving mobility and logistics services will augment the incorporation of blockchain solutions in the automotive sector.
Currently, the automotive original equipment manufacturers (OEMs) are mostly opting for public and private blockchains and their applications based on the business model adopted by the automakers. In the coming years, the private domain will adopt blockchain technology at a higher pace than the public domain, because public blockchain has lower scalability and encompasses higher transaction costs. Further, the OEMs use such blockchains in manufacturing, mobility solutions, and retail finance and leasing applications. With the growing preference for shared mobility services, blockchain technology will be significantly used for mobility solutions, in the foreseeable future.
Thus, the generation of huge volumes of data and rising need for scalability of information, real-time monitoring, and auditability in the automobile sector will augment the use of blockchain solutions in the foreseeable future.