Technological development often takes us in directions we wouldn’t expect, and it’s no more surprising anywhere than in the unexpected correlation between Bitcoin and the manufacture of automobiles. Blockchain technology, the underlying technology that runs the crypto-currency Bitcoin, is about to revolutionize the automobile industry; namely the autonomous vehicle arm of the auto industry.
First, a little background on exactly what blockchain technology means: According to the Oxford English Dictionary, the official definition of a blockchain is:
“A digital ledger in which transactions made in Bitcoin or another crypto-currency are recorded chronologically and publicly.”
To clarify a little further, think of it as a distributed database made up of a continuously growing list of records. Each record is a block, and each block contains a timestamp and a link to the previous block (i.e. a link in the chain).
A peer-to-peer network conducts all transactions in a blockchain database, with all peers having the ability to add and verify new blocks collectively. Data in a block is immutable and cannot be altered retroactively or erased. To change a value in such a shared ledger, a new block must be submitted – called a transaction – with the updated and correct information. Transactions can be records of events that have just happened, such as a status update, value change, or transfer of an asset between two parties – such as what happens during Bitcoin transactions, or in the case of the car industry, sharing data collected from every trip.
The use of blockchain technology also adds a layer of security which is incredibly hard to hack. Changing the value of any block will require all subsequent blocks to be altered, as well as cooperation from most peers in the network. While it is technologically feasible, the level of resources needed to complete such a feat are astronomical.
The auto industry is racing towards a future where self-driving cars will rule the highways. Blockchain technology will enable the more efficient gathering of data from vehicle owners, manufacturers, and fleet managers to reduce the timeframe needed to develop an autonomous vehicle that will be safer, more effective, and perhaps more importantly, trusted by humans.
The first stage will focus on sharing data collected from every trip undertaken by an self-driving car. Analysis of the data will then help with developing and fine-tuning a ride-sharing service as well as new insurance products based entirely on usage. The inherent security of blockchain technology will keep all this data safe from tampering.
Two key players in blockchain technology are Oaken Innovations from Tel Aviv and Commuterz from Dallas. These two companies are heavily involved in creating blockchain applications for car sharing, payments, carpooling, and vehicle access.
Blockchain technology has reached a level of maturity that will see it being adopted by many industries. While its security lends itself well to the financial industry it’s also great to see car manufacturers adopt the technology to make cheaper, safer self-driving cars!