Cryptocurrencies are dependent upon advanced encryption techniques. Therefore, the booming market of crypto is just that- cryptic.
Secretive yet full of hidden potential. The creation and management of digital currencies such as Bitcoin, Ethereum, and Ripple, are notable examples of crypto at work.
Let’s take a step back
Cryptocurrency leaped from being a virtual concept into a reality with the inception of Bitcoin in January 2009. It wasn’t until February 2011 that the questionable currency took parity with the US dollar. (1 USD= 1 BTC)
That was the beginning of a new era. As more people understood the potential behind the novel concept, other cryptocurrencies soon entered the market. To date, there are more than 1600 coins all over the world.
Cryptos have proven to be a class of assets above the rest. They have seen extraordinary returns over the past decade. We all witnessed Bitcoin’s all-time high record of $19,783.06 in December of 2017.
A Moscow-based cybersecurity firm, Kaspersky Lab, reported in June that 19% of people world over had purchased cryptocurrency. In just over a decade, that’s a considerable fraction of the population.
So does crypto have a place in the automotive sector?
Let’s cut to the chase.
The automobile industry has always welcomed technological advancements with open arms. Though the latest adoptions include electric and solar vehicles, future trends are looking into autonomous and connected cars.
And now, as blockchain takes a stable step into this industry, there is yet more to be seen. With the power of cryptocurrency backed by the potential of the blockchain, what industry doesn’t want to open up access to the latest technology?
But on a more important note, if global corporations like MasterCard can take the plunge into the realm of digital currency, then there is a lot of hope for others.
Blockchain and crypto have set the wheels of change in motion
As automotive dealers begin incorporating blockchain technology, they will offer a myriad of life-changing services.
This business model will help extend a greater degree of transparency to customers, whether it’s about a vehicle’s history, maintenance records, valuations, ownership documents, etc.
A group of 30 automotive companies have formed a smart mobility consortium called MOBI (Mobility Open Blockchain Initiative). They are ready to revolutionize the automobile industry.
Efforts are underway to speed up the mainstream adoption of these technologies. As more automotive companies embrace this technology, a stronger foundation for change can be built. And as the number of users of crypto increases, the momentum that will carry the industry into the future will continue to grow.
On the road to crypto
There are numerous benefits of utilizing crypto. But there are plenty of blogs available describing them in detail. Let’s look at the union of the automotive industry and crypto at a different angle.
How is the automotive sector leveraging this technology?
1# As a mode of payment
As a payment solution, it is a perfect example of how cryptocurrency is aligning with the mainstream automotive industry. Crypto provides the ease and security that consumers, as well as businesses, are longing for.
This option is available for car buyers and sellers alike. More and more platforms are promoting P2P auto transactions. But this is just the beginning.
2# Auto financing
For those who do not have sufficient funds to buy a car for sale, acquiring a loan is the way to go. Now, people can consider crypto financing options.
Traditional loan applications require a significant amount of verification and validation. The entire process can be simplified with the blockchain.
But since crypto and blockchain go hand in hand, proposing an auto loan through crypto is an ideal way of extending services to your customers. In fact, this can enhance trust, lower risks, and eliminate intermediary costs linked to the process.
Ideas along these lines are already in the making. In 2016, Toyota Financial Services collaborated with R3’s CEV blockchain consortium. They are exploring how these technologies can reduce costs, boost efficiency, and increase the transparency of auto finance.
3# Cashing in on investment opportunities
Trendsetter Peter Saddington was the first to buy a Lamborghini through his crypto investments. He bought Bitcoin in 2011 when the price was down. When the value went up in 2017, rather than selling his coins for fiat, he purchased the car with his cryptocurrency.
4# Supporting car sharing options
Studies have shown that Millennials are not interested in car ownership. In order for auto companies to remain profitable and competitive, they must cater services to the demands of the general public.
Hence, the solution is to offer car sharing. EY, an accounting and consulting firm, is working on a system to share a fleet of vehicles.
Though this idea is not entirely new, recording the logs on the blockchain is a new one. And as the services grow, so too does the variety of applications with which crypto can be applied.
5# Offering rewards
Recently, Daimler AG launched its own cryptocurrency, Mobi Coin. The German company announced that it is in the process of testing a new rewards system, currently comprising of 500 participants.
It initiated the system to promote safer driving practices, let alone boost the company’s marketing strategies.
Vehicle data will be linked to an e-wallet. Those who adhere to safety regulations, such as driving within the speed limit and braking properly, will be rewarded with Mobi Coins. However, it is still not clear if the rewards can be converted into standard currency.
The person with the highest number of Mobi Coins can attend Mercedez VIP events such as MercedesCup, DTM races, or Fashion Week in Berlin.
6# Auto insurance
Everyone knows insurance requires paperwork- lots of it. As with any other sector, people and businesses are searching for a simplified solution.
Whether it’s to handle claims, process information, or reimburse subsequent payments, the goal is to bolster the level of trust between insurance providers and customers. And if the potential of smart contracts is applied to these solutions, the dynamics of the automotive industry will experience a whole new phenomenon.
Possibilities include the payment of insurance premiums as well as receiving insurance claims immediately. Without the need for intermediaries, the process can be completed quicker and with less paperwork.
Final thoughts on Cryptocurriences
As we are on the brink of a blockchain revolution, the future of crypto seems bright. While many analysts are still debating about the idea that cryptocurrencies could replace cash, others are predicting that even bigger changes lie ahead.
At the moment, crypto has the potential to coexist with the real-world economy. Ultimately, its use cases will expand as it begins to integrate with current applications.
Crypto continues to aspire to become a relevant part of the mainstream financial system. The aim is to make all aspects of the industry more efficient and transparent.
Will crypto eventually replace conventional currencies? Will it become as commonplace as the Euro or US dollar?
Only time will tell.
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Author Bio: Evie harrison is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. Find her on Twitter: @iamevieharrison.