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The Auto Industry Is Gearing Up for a Blockchain-Powered Future

We’re all excited for self-driving, even autonomous, cars, and many tout blockchain as the technology needed to make that happen.

But while that conversation is an exciting one today, CoinDesk’s Consensus 2018 conference played host to an array of esoteric use cases for the mobility space that showcase how many executives in the automotive space are currently taking a more conservative approach to applying blockchain technology to the industry.

Sebastien Henot, manager of business innovation at Renault Innovation Silicon Valley, is such a pragmatist, opting for the low-hanging fruit of using the technology to better manage carmakers’ supply chains.

“Blockchain can bring cost savings to supply chains thanks to new levels of transparency and auditability, which would be of vital help in the unfortunate event of recalls,” Henot told CoinDesk.

And that process could also mark the birth of automobiles with their own unique digital identity.

“If you have an Audi and you want to sell it to buy a Renault, it would be very useful for the Renault dealer to be able to access the Audi birth certificate and see a standardized history,” Henot said.

But it’s still early days, and the process for what kind of data will be shared and how that data will be coded still needs to be standardized.

That’s one of the reasons the Mobi consortium, a kind of standards body for decentralized mobility and data sharing, was launched earlier this month with founding members including BMW, Ford, General Motors and Renault, as well as technology providers like IBM, ConsenSys and IOTA.

And while the futuristic use cases made possible by tokenized incentive structures is indeed what interests many members of the consortium, Henot said:

“My philosophy is let’s start small.”

Blocks of miles

According to Henot, starting with the little things, such as certifying the mileage on a car, highlights a very simple, yet beneficial proof-of-concept.

Odometer fraud, or “clocking,” whereby vehicle sellers or dealerships tweak the odometer to make it seem that the car has been driven less miles than it actually has, which can increase the value of a vehicle, is not a new problem (other blockchain-based startups have begun developing systems for just this use case).

In fact, around 450,000 vehicles are sold each year with falsified odometer readings, resulting in a cost of more than $1 billion annually, according to a National Highway Traffic Safety Administration study.

As such, Henot believes the blockchain could eliminate this issue around mileage, “so nobody can tamper with it.”

The team at UK-based Dovu, a startup part-owned by Jaguar Lan Rover, agrees. The startup raised more than $13 million, according to current metrics, in a crypto token sale in October 2017, which it will use to incentivize users to behave in a virtuous manner, such as capturing mileage of their vehicles on a regular basis.

Dovu began a mileage capture pilot three months ago with BMW, which enlisted its employees to carry out the test using a simple Dovu-developed crypto wallet.

Explaining the benefits of the system, Dovu CEO and founder, Irfon Watkins told CoinDesk, “If, like BMW, you own a lot of cars under a fleet management arrangement, it’s really useful to know how many miles those cars are travelling every week or every month – rather than every three years.”

He added:

“By which time you might find you have an asset on your books worth a lot less than you thought.”

Crypto for the environment

Another small step the automotive industry could take to harness the power of blockchain revolves around electric cars.

Dovu is at the forefront of this application as well, using its token as a way to nudge drivers to charge their battery in an optimum way, “that doesn’t degrade the battery, as if it were a mobile phone,” said Watkins.

This use case could potentially push blockchain technology into the mainstream narrative, since so many people, especially millennials, are interested in electric cars for their positive environmental impact.

Spherity, a startup founded by a former technology innovation lead at the largest German utility company, Innogy, is also looking at applying blockchain to electric vehicle charging. The company wants to use the technology to provide an audit trail for “greenhouse gas accounting,” so users can trust their vehicles are using green energy (hydroelectric, wind farmed or solar) as opposed to energy generated by burning coal.

Just like people might want to track and trace sustainably-produced food from farm to fork, so too will environmentally-conscious users want a “guarantee of origin” on the electricity their car is using, Spherity founder Dr. Carsten Stocker said.

He added:

“Someone who spends $150,000 to buy a Tesla would probably like to have proof they are charging with green energy.”

More than just cars

Still, even while some are starting small, many are fascinated by the future as imagined with blockchain.

For instance, Henot said the future of mobility is not only about making vehicles physically autonomous but also economically autonomous, whereby automobiles “speak together, negotiate rights of way, parking and so on, using their wallets.”

One such group working towards those cutting-edge applications is the non-profit foundation, Decentralized Autonomous Vehicles (DAV), which describes itself as “the TCP/IP of connected mobility.” But according to David Fraser, a co-founder of DAV, one of the reasons the foundation is able to inspire such excitement is because it doesn’t think about autonomous vehicles only as cars and trucks.

“There are many other examples such as autonomous drones, autonomous rovers (a drone that stays on the ground) and autonomous marine vehicles – some are already here, the rest are coming,” Fraser said.

Among its notable advisers are the former CTO of General Motors, Dr. Alan Messer, as well as the technical lead on the ethereum virtual machine, Dr. Greg Colvin.

Similar to Mobi, DAV is proposing a commons, a standard of sorts, in the form of a free and open-source decentralized mobility network.

And with this, the foundation hopes to see the full potential of blockchain bring about social change within the mobility industry.

According to Fraser:

“Big players are controlling a lot of what is going on right now, but as new and open networks roll out, the silos will be shared and the gatekeepers will become irrelevant.”

Car bumpers image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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BMW Test Drives Blockchain for Car Mileage Tracking

Global auto giant BMW is piloting a blockchain platform to track mileage in leased vehicles through its startup innovation program.

DOVU was one of five startups to work with BMW Group UK as part of the company’s Innovation Lab, first unveiled back in February. Specifically, DOVU developed a system with Alphabet –  BMW’s fleet manager – to incentivize drivers to log mileage in leased or borrowed vehicles.

The idea is that the system helps BMW understand how much activity its vehicles are seeing and the impact on them, DOVU head of product Alex Morris explained.

He told CoinDesk that as drivers participate, they receive tokens in exchange for their data, adding:

“What we’re doing is we’re essentially trying to build out this circular economy on the DOVU platform. [Drivers] can earn tokens, but down the line they’ll also be able to spend tokens on services – for example, they might be able to get replacement tires or something like that using the Dovu ecosystem. The partner, in this case BMW, defined the categorization of the reward and that’s defined in a smart contract. As long as the parameters are met for the smart contract, they’ll receive tokens.”

BMW chose to define the parameters for token rewards through mileage – the current automatic mileage tracking systems are unreliable, Morris said, and do not provide the information that the company might actually use.

As a result, the pilot program requires drivers of leased or borrowed vehicles to log their mileage weekly, which gets stored on DOVU’s blockchain.

“Right now mileage is the most important factor for the resale value of their vehicles,” he said. “The problem is quite an important one for them to solve, so when we suggested tokens to incentivize them to do that they were very excited.”

The first part of the partnership – the proof-of-concept – has been completed already, said Max Lomuscio, who serves as DOVU’s community manager. Now the startup is moving into the second phase, which is the actual trial with drivers. This portion should take another 6-8 weeks, he explained.

Ultimately, however, “the plan is to become this kind of ubiquitous rewards system that can work across vehicles, make some kind of unified wallet for token rewards that you can use on your BMW, but maybe jump into your second car and earn more tokens and then spend those throughout the ecosystem,” according to Morris.

Beyond that, the startup wants to work with smart city environments, he said, and has already begun discussions with a few cities to determine how the earning and spending use cases can be incorporated into public transit and other aspects of a metropolitan area.

The project comes months after DOVU – previously backed by Jaguar’s venture arm – completed a $6 million initial coin offering.

Image Credit: guteksk7 / Shutterstock.com

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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BMW, Ford, GM: World's Largest Automakers Form Blockchain Coalition

Four of the world’s largest carmakers have joined tech providers and startups to form the biggest-ever consortium focused on applying blockchain tech in the automotive sector.

Announced Tuesday, the Mobility Open Blockchain Initiative (MOBI) has revealed founding members including BMW, Ford, General Motors and Renault. Also present among the ranks are the car-parts manufacturers Bosch and ZF as well as major companies (Accenture, IBM) and blockchain industry groups (Consensys, Hyperledger).

As such, while there have been a number of proofs-of-concept in the sector of late (last year, IBM and ZF tested a crypto car wallet), the consortium perhaps distinguishes itself through its broad representation, as well as the participation from groups backing both private and public blockchain systems.

Rather than push a particular type of distributed ledger, MOBI aims to create common standards and APIs to enable payments and data-sharing between cars – all in service of driving forward a new digital mobility ecosystem, from ride-sharing to self-driving vehicles and everything in between. 

Chris Ballinger, the chairman and CEO of MOBI, said that in his previous job at Toyota Research Institute he realized the need for a consortium after conducting several blockchain proofs-of-concept with startups. 

What is required to move those forward, he said, is a decentralized business network.

“You really have to have common standards and common ways for cars to communicate, to identify themselves and make payments,” Ballinger told CoinDesk, adding:

“But if each auto company is trying to develop its own car wallets or its own way of paying tolls, or providing a rise sharing service, it just doesn’t work; it’s the Tower of Babel.”

And while he started a fledgling consortium during his time at Toyota, Ballinger’s company was the only automaker on board with the idea. Still, it’s a concept that seems to have gained some steam with MOBI coming out of the gate with members that account for 70 percent of global car production, along with 30 other partners.

Dan Harple, the CEO of Context Labs, who is working closely with Ballinger, said the new consortium’s first step will be to establish a “minimum viable ecosystem” for gaining network effect.

The work will kick off with in-person member meetings to form project teams for areas such as vehicle identity and data tracking; ride sharing; mobility ecosystem commerce; and data markets for autonomous and human driving.

Internet’s original sin

All told, the MOBI consortium is perhaps the auto industry’s first coordinated response to the realization that data produced around cars is a valuable resource and that blockchain could help the automotive industry itself keep control of and manage this data. 

Stepping back, the fact that data lacks good property rights means it ends up in data silos of big tech companies which become quasi-monopolies and then just get bigger and bigger – what MIT’s Michael J. Casey (a CoinDesk columnist) refers to as “the Original Sin of the internet.”

But while the car is the next data battlefield that Apple, Google and Amazon are fighting over tooth-and-nail, MOBI sees blockchains offering a powerful tool for decentralization. Moreover, that data, once it is shared, can conceivably deliver benefits to society, such as improving road safety and reducing congestion.

“Everybody wants that data. Apple has their car play, Amazon is putting Alexa in the car, Microsoft Azure has their car system, Google’s got theirs,” Ballinger told CoinDesk, adding:

“The car is the fourth screen and the next big data battleground. It’s a trillion-dollar prize.”

As such, Ballinger anticipates many data opportunities going forward.

One is the data generated inside the car: the average commuter spends a couple of hours a day in their car, and increasingly they’re using the internet during that time – for instance, asking virtual assistants for directions.

“The opportunity here is if you can create property rights, then that data can eventually become self-sovereign and owned by whoever generates it – whether that’s an individual owner, a fleet operator, a city government perhaps operating traffic lights, whatever,” Ballinger said. 

Sensor data explosion

Another type of data that MOBI hopes to harness using distributed ledger tech is much more up for grabs.

That’s the data generated by the car itself via the multitude of sensors positioned within and around it. Connected cars today are producing about 25 gigabytes of data an hour and that figure is expected to increase by orders of magnitude in a future with vehicles (manual or autonomous) that have remote sensing methods like light detection and ranging (LIDAR).

“With these kinds of rich sensors, the cars will be producing massive amounts of data that probably not even 5G networks can handle,” Ballinger said. “Imagine real-time mapping in such detail that you could deliver a package with a robot to a door of somebody’s apartment or house.”

Added to that could be real-time weather sensors, cars that are negotiating rights of way with other cars, cars negotiating carbon pricing and pollution and the energy they use and so on, he continued.

All these data points, if managed and used correctly, could make being on the road much safer too.

While the likes of Google and Tesla are way ahead in terms of collecting self-driving car data, Ballinger believes it’s still going to take a half a trillion miles to develop cars that are really safe and can handle all the real-world driving situations, such as driving through cities in bumper-to-bumper traffic or navigating the highway in torrential downpours.

Yet, blockchain-based systems will help here as well.

While at Toyota, Ballinger took part in a proof-of-concept involving startup BigChainDB which used a blockchain to create property rights for data so it could be shared among car makers, which could then use it to train machine-learning algorithms. According to Ballinger, sharing this data is the only way we speed up the process of getting safe, self-driving cars on the road. 

“No company is anywhere close to having that amount of data and won’t any time soon,” said Ballinger, adding: 

“That data might be out there, but nobody is sharing it and so the day when we get safe cars is probably further away than it otherwise could be.”

Burnt rubber image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.