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Whether you realise it or not, in an age of post-industrialism, automobiles are ubiquitous and society just couldn’t function without them. This makes the vehicle lifecycle industry critical to the way our world works, but just how efficient is this lifecycle monitored and controlled?
The vehicle lifecycle involves several parties: from manufacturer, to car dealer, via a regulatory authority and insurance, to the vehicle owners themselves and lastly to the scrap businesses. All of these entities are in need of clear, untampered information to optimise costs and cooperate efficiently. However, at present there is a lack of transparent information exchange from a collated single source, meaning the parties cannot benefit from an environment where each can trust the data about the complete history of vehicles.
The Vehicle Lifecycle Blockchain (VLB) team recognised that there was a need to solve this problem and has come up with a solution using distributed ledger technology (DLT): a way to bring transparency in a trustless environment. Its team is looking to pair the technology with the lifecycle of vehicles to bring down costs that are subsequently passed on to consumers.
As research in VLB’s light paper demonstrates, 30% of all warranty costs are down to poor practices amongst dealers, 5-10% of all insurance claims are said to be fraudulent and around 60% of insurer costs are spent on operations and IT. When added to the estimated $12 billion market for counterfeit parts in the US alone, losses in the industry amount to over $100 billion per year and prices are inflated to compensate for this monumental figure.
The solution offered by VLB will not only reduce the size of the currently large market for counterfeit spare parts and aid buyers looking to avoid overpaying or ending up with a ‘lemon’, but will bring down costs throughout every step of the vehicle lifecycle which, in turn, will reflect on end-user prices for vehicles, auto transportation and related services, in addition to curtailing the cost of insuring cars.
Vehicle History Records on the Ledger
This will be done by bringing together all of the actors that interact with the lifecycle on a blockchain, assembling the information each needs access to within one system using innovative decentralised technology. The immutable nature of DLT will bring more confidence to the automotive industry since vehicle manufacture, purchase, warranty, maintenance, damage, insurance history and more will be verifiable on the ledger.
VLB has already created an extensive ecosystem architecture to bring together key industry players worldwide and from every step of the vehicle lifecycle. Each of these participants are data owners and producers with respect to their hand in the auto industry; housing the data in a single, yet common, accurate system will lead to benefits for all parties. A key point here is the integrity and recency of the records which is needed to maintain trust and optimise pricing via keeping data up to date. VLB’s team will obtain business partnerships with industry incumbents in order to test the blockchain on their business ecosystem, so watch out for some big name announcements in the near future.
The Vehicle Lifecycle Blockchain’s technical team behind the project is led by developers who created the world’s first smart-contract based turing-complete blockchain (i.e. a decentralised supercomputer) to be run by a central bank in a peer-to-peer network with the leading commercial banks – Russia’s Masterchain. Whilst the project also receives extensive advice from the director of IBM’s Blockchain Labs (Austin, Texas), VLB’s development team consists of top notch specialists located in different parts of the world, combining both public blockchain and enterprise DLT experience and knowledge.
Knock-on Effect of Innovation
Potential use cases of blockchain within this sphere also include product and service innovations in insurance, increases in fraud detection efficiency, administrative cost reduction and price optimisation. Based on third party data, VLB estimates that its solution could bring annual savings for vehicle manufacturers totalling $17 billion, a further $12 billion for insurers and $6 billion for spare parts’ dealers, not to mention the savings to be made by vehicle owners, rideshare and hire services, amongst many others.
Placing this data on the ledger will lead to a significant reduction in the cost and inefficiencies that exist at present, not only to the benefit of big business in the auto industry, but in relation to all activities that depend on using vehicles as a means of transportation. The Vehicle Lifecycle Blockchain project has support throughout the automotive, blockchain, legal and venture capital industries, with its realisation set to bring savings that amount to billions of dollars annually via streamlining processes and knowledge sharing in a way yet unseen for this sector of the economy.
Join VLB in bringing transparency and dependability to the vehicle lifecycle process by taking part in the public pre-sale from 5 February and ICO from 12 March 2018. For more information, read the white paper.
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