Blockchain in Mobility

In today’s post, economist and lecturer of Global Master's in Blockchain Technology Philipp Sandner outlines some of the use cases of blockchain in mobility and calls it a digital universal weapon for security and privacy. Since its first appearance as a cryptocurrency in the financial sector, blockchain has left its mark on many industries with the ability to simplify, optimize and automatize different processes. Today, however, we will concentrate on the implications it will have on the mobility sector. Blockchain technology has a lot of different characteristics that make it suitable for many different purposes. In the cases we introduce below, various functionalities of blockchain are put into good use in the mobility sector. For a car-wallet (that we can use for EV charging payments, platooning and temporary vehicle functions), the main use is the execution and validation of payments and smart contracts. In the case of Smart Insurance, on the other hand, the focus lies on the decentral database functionality. A self-owned car acts as a decentralized database, but it also needs a real-time system, different payment scenarios and smart contracts.EV charging-payments are one of the most talked-about blockchain in mobility use scenarios. For example, a blockchain solution will permit the drivers to charge their vehicles at traffic light through inductive loops in the ground. For that short period of time, the value of the transaction won’t be more than a few cents and building on the blockchain, we could be sure that even the smallest transactions are profitable.Platooning or flocking is a method for driving a group of vehicles together, behind each other in a close distance. If those cars communicate with each other, we can ensure the safety and exchange sensor data in real time. The vehicle that leads the platoon detects and communicates the situation on the road and potential dangers to the others. By reducing the distance between the vehicles in the flock we save fuel due to reduced wind resistance of the following vehicles. However, how can we pass on those savings to the leading vehicles so that they also benefit from the platooning? A smart contract on blockchain technology would securely automate the payment with real-time data. Blockchain technology could also be used to validate the sensor data communication or to buy additional services, such as purchaising a green wave for the platoon.Imagine that instead of buying the expensive extra equipment with the initial order, you could activate the products of your interest temporarily. Vehicles would come out of the factories fully equipped, which could mean economies of scale to the automakers. Users, on the other hand, could unlock the features they are interested in for a limited period of time. You may not need cruise control in your daily routine, but on a long highway trip, it is certainly an upgrade. Via smart contract, we can make sure the unlocking of extra equipment is unmanipulable and enable secure payments on a blockchain.Using blockchain in insurance will permit us to install black boxes to enable unmanipulable and transparent logging of the vehicle’s sensor data. If we think of the much talked about autonomous vehicles, this type of documentation could help to resolve the circumstances of an accident, for example. Another interesting feature would be having an insurance linked to the user profile that you can take along into other vehicles, for example in carsharing. With cars connected over blockchain, the insurances can also take into account the driving style, travel time, route or frequency and implement it into the insurance plan. In the case of smart insurance, we have a limited number of participants: insurance company and reinsurer, owner and driver. A blockchain black box will make it possible for all parties to trust the dataA self-owning car as a vehicle that represents a separate financial entity sounds like something from the future. With blockchain technology, the vehicle could have its own accounting identity and, with a pinch of artificial intelligence, it becomes an autonomous entity capable of earning and spending money. This makes the human decision-maker redundant. The vehicle’s revenues will come from carsharing and expenses from repairs or charging. With vehicles capable of maintaining themselves completely new possibilities of vehicle ownership emerge. For example, instead of buying, customers or companies could become investors and acquire shares of such a self-owning car.The record of vehicle's manufacturer, seller, mechanic and real-time data could be kept on a blockchain to create a digital twin. Stored in a decentralized database, we can be sure of the congruence between data of assets in the real world and the database.In the field of leasing, we could use smart contracts to optimize and automate various processes. If the leasing rates of a car haven’t been paid yet, the leasing company could, for instance, deactivate the unlocking system.By implementing blockchain, we could create a carsharing ecosystem that requires only a single registration and digital identity for different service providers. Blockchain also guarantees the data sovereignty and that there is no linkage between the real-world and digital identity. The user could safely and comfortably save settings and personal preferences.Vehicles’ access rights and rights of use could be managed via a smart contract. In P2P carsharing it would bring many benefits and might lay the foundation for a lot of new services.There has been a lot of talk about the Sharing Economy and we can be certain that it won’t spare mobility infrastructure. We could use blockchain to build a new open ecosystem of charging where the service providers can connect to. By integrating private charging spots, network coverage could also be improved by far.With blockchain, the odometer fraud could be avoided, by continuously uploading mileage data. And the buyer can look at the transparent, anonymous and manipulation proof database to make sure the mileage recorded in the odometer actually corresponds to the real driving data. In the same way, we could record the workshop visits and repairs. And the availability and transparency of data could improve the resale value.As we can observe, the list of different uses for blockchain in mobility is quite a long one. And even if there are many technical and economic challenges we will have to overcome in order to exploit the full potential, we can say that it will be worth it. From executing transactions at minimum cost to easier management of ecosystems with many participants, we see the many intersections of the technology in the mobility sector as well as the high interest of the industry.

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Philipp Sandner Professor of the Global Master's in Blockchain Technologies Head of Frankfurt School Blockchain Center