The blockchain revolution
I don’t know why, but whenever someone says the word “blockchain” in my earshot – and that happens quite a lot at the moment – it always reminds me of the classic movie “The Defiant Ones.” Either that, or Tetris.
The blockchain – the hot potato in IT
Many chefs are now trying to cook up new recipes for business models with it, which – of course – has disruption in its DNA. In fact, a blockchain is nothing more than a log file; a recorder that logs transactions truthfully – traceably, transparently, and distributed in multiple copies over several storage locations. This lends a high degree of credibility to the transaction record.
Blockchains are widely known thanks to Bitcoin, which can’t shake off its reputation as an alternative, universal currency, at least among believers in progress. Bitcoin demonstrates another strength of the blockchain: there is no need for intermediaries. Processes are more streamlined; additional margins vanish in highly automated transactions. This “direct trade” can of course be transferred to industries other than finance. With the Ethereum blockchain, resourceful developers have already shown how first business models that are far removed from Bitcoin can be implemented using blockchains.
However, we should not hide the fact that blockchains have their price: they are computationally intensive, energy-hungry, slow at times, and not entirely cost-effective. In mass micropayments business, blockchain costs can quickly exceed the actual cost of the product or service purchased. Slightly counter-productive.
New protocols such as Stellar can do a better job of it. They not only process the transactions faster, but also much more cost-effectively.
Blockchains in the automotive industry
That brings us to the one-million-dollar question: what can blockchains do for the car sector? Can they change the shape of it in any way?
With their transition from smart cars and connected cars to autonomous cars – in other words, as they are getting their own identity in the Internet of Things – cars are becoming “capable of contracting” too. Let’s just think about infotainment programs that are streamed into cars on demand. Paying at the EV charging station, settling toll charges on holiday – blockchain smart contracts and smart payment facilities can be set up anywhere where services are used on demand and quickly. AXA is already getting ahead of the game by offering the first ever insurance using blockchain technology for transatlantic air passengers. Four clicks on your cell phone and then you’re all done, plus automatic insurance payouts – including if a flight is delayed by two hours or more. With no insurance staff at all. Ultra direct insurance, so to speak.
No wonder the banking subsidiaries of OEMs are seriously considering blockchains. When it comes down to it, perhaps car insurances or service contracts can be blockchainized.
And perhaps disruption would rear its head, after all.
Let’s think another step ahead, where the blockchain could also become the “car dealer” – then the car buyer would complete their purchase transaction directly with the OEM online. Transparency would be guaranteed for both sides. If I were a car dealer, scenarios like that would make me queasy. They would be truly disruptive. Car dealerships would possibly just be logistics centers where buyers would collect their new cars. And have them serviced, of course. And then we would inevitably end up with driving logs – that could also be used in court proceedings or for establishing a car’s resale value if necessary.
That would bring us back to the “The Defiant Ones”: you might even say car usage would be under total control. This prospect will not always be a bed of roses for everyone. But it would most certainly be disruptive. Analyses need to prove whether these kind of monitoring services can be implemented more easily and cost-effectively through blockchains than via the existing platforms. Blockchains are there, the potential is there. Let’s see how things turn out.