Automakers race to incorporate blockchain technology
Blockchain is slowly making its way into the mainstream, with major automakers adopting the technology to manage in-car payment systems.
Kim Jung-won is a 45-year-old office worker who pays for gas with a built-in payment system based on blockchain technology called Carpay in his Genesis GV80, the first SUV from Hyundai Motor.
At an affiliated gas station, the display in the car asks whether he wants to pay via Carpay, and all Kim needs to do is to decide on the desired quantity of gas and the payment method. The smart payment method works the same as a mobile payment system like Kakao Pay or Apple Pay, but based in the vehicle car. It simplifies transactions on devices with credit card information or biometrics like fingerprints, eliminating the multi-step certification process.
Hyundai Motor first unveiled Genesis Carpay when the GV80 rolled out in January 2020. The in-car payment service, which is unique to the local market, allows drivers to pay through the navigation screen at drive-through stores and parking lots.
Automobile manufacturers are adopting blockchain technology for their payment systems because of the security of the database system. Using its encryption techniques, blockchain only verifies transactions when records stored across the system match up. Countless blocks of data are connected on a chain, and transactions are only verified when the records stored on all the blocks match.
Data for features like the digital key, which allows drivers to access a car without physical keys, and personal profile functions that transfer default settings when driving a different car, are all stored on blockchain. The technology is also used to manage the data of cars produced worldwide and the inventory status of components in real time.
Security is often a concern with these features. When personal information is stored on servers, it can be vulnerable to hacking. However, systems built with blockchain are virtually impossible to hack. Automobile manufacturers are leaning toward blockchain to ensure security for customized services based on a diverse range of personal usage patterns.
Meanwhile, BMW Korea recently created its own cryptocurrency, the BMW coin. The company on Oct. 7 released BMW Vantage, a blockchain-based lifestyle platform, which debuted in Korea. When a customer buys a new car or achieves a certain level on a smartphone game, BMW coins are distributed to be used in online and offline transactions.
Mercedes-Benz built in the “Welcome Home” function in its new S-Class. The car recognizes the driver by fingerprint recognition on the steering wheel and uses the personal data for a range of services, including automatically moving the seat and pulling up frequently visited places. Mercedes uses blockchain to handle the sensitive personal information in the service.
Daimler, the parent company of Mercedes-Benz, is planning to partner with Ocean Protocol, a blockchain-based data sharing platform headquartered in Singapore, for its business-to-business transactions and also car-sharing services. Blockchain technology eliminates the need for separate contracts and allows for a simple payment process.
French automaker Renault is planning to implement its Xceed blockchain project for the entire manufacturing process, from planning to production. The production process, which involves over 20,000 components, will be streamlined regardless of the production location, and the technology will also help protect confidentiality.
Toyota is in the process of developing blockchain technology to be used for self-driving cars, data transactions and car sharing through the Toyota Research Institute.
Hyundai Motor’s IT service unit Hyundai AutoEver is developing technology for creating a cryptocurrency-based market ecosystem, vehicle lifecycle management and forgery prevention for used cars’ history.
The market for automobile-related blockchain technology is expected to grow rapidly. Global consulting firm Simon-Kucher & Partners projected the market to grow up to $120 billion by 2030 in a recent report.
BY LEE DONG-HYUN [email@example.com]