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How Blockchain Technology Is Rising In The Auto Industry

Most of us are not aware of the pain that we experience every day due to the outdated tracking of our vehicles. We stand in long lines at the DMV to get the paperwork done, and we pay for insurance to cover the fraudulent activity happening in our society.

Unfortunately, many of us unknowingly pay more for insurance to cover the costs of cybersecurity breaches and product liability insurance. In the automotive industry, the emergence of blockchain has created new opportunities for companies. This technology, which is still relatively new to most of the population, can transform businesses and provide additional benefits.

The Why and What of Blockchain

Many years ago, society only kept records on paper and in filing cabinets. There were several issues with this system, such as the lack of access to information outside of the location where it was stored, the cost of backing up systems and the difficulty in recovering data from disasters.

Eventually, computers replaced paper records. However, the biggest issue with this system was the security of its data. Online ledgers could be used by hackers to alter or destroy the information stored on them.

Through blockchain technology, an online record system can be designed to be secure by allowing multiple computers to communicate and validate the information stored on it. The creator of blockchain was very interested in the technology's security, and it has been used for financial transactions since 2009.

Introduced Into the Automotive Industry

In 2022, the first state in the U.S. will implement a system that will allow residents to register their vehicles using CHAMPtitles. Although it might seem simple to create a chart of vehicle ownership, CHAMPtitles CEO Shane Bigelow explained that this system requires a bit of work to implement. For him, it has to be done in a way that allows for the current and future complexities of vehicle ownership.

There are several reasons why blockchain should be used for vehicle ownership. One of these is time savings, as it eliminates the need for people to go to the Department of Motor Vehicles to get their paperwork done. Aside from this, it can also reduce the paper used for millions of documents annually.

One of the biggest issues that people have when it comes to recovering money from an accident is how to sell their vehicle after it has been totaled. Usually, it takes around 50 days to get the title. With CHAMPtitles, it only takes five days to get the title.

The Future of Blockchain

Aside from vehicle ownership, blockchain can also be used for other purposes. For instance, it can allow people to add information about the various parts of their vehicle, such as their upgrades and when they've been owned.

1. Insurance

In the event of an accident involving two vehicles, blockchain can be used to store multiple pieces of information about the other vehicle, such as its insurance policy and the cost of repairs. This can then be used to record the details of the accident and prevent people from committing fraud.

2. Mileage Tax

Due to the increasing number of vehicles, governments will need to adopt a new tax system that charges a vehicle's miles traveled. However, keeping track of this data will be very challenging if the autonomous driving system takes over. Also, these municipalities will need to leverage cryptocurrency coins on the open market to charge for mileage.

3. Cybersecurity

Due to the increasing number of cybersecurity certifications that will be required for various industries, such as the automotive industry, companies must have systems that can track the software versions of their products. For instance, if a vehicle has hundreds of parts that have different versions, it must have a system that can update this software.

One of the biggest issues that blockchain could face is the lack of instantiation. This is because it would require a lot of work and dedication to get the necessary approvals.

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