Blockchain and Self-Driving Cars Causing Disruption to the Financial, Insurance Industry
Blockchain and self-driving cars may be a disruption to the Financial and Insurance Industry but when brought together they complement each other perfectly. Blockchain technology can play an important role in creating many new business models related to the driverless car industry.
Self-driving cars which have really set an example how far we have come in terms of technology, but at the same time this is disturbing the insurance industry related to driverless car in some way or the other. Insurance issues may initially grow more complex- but possibly much simpler later on, when human- caused accidents will mostly disappear.
To operate safely, self-driven cars will require various services. These services might be paid for on a pay-per-use basis. In these cases, driverless car users might wish to make these payments without having any subscription from the service providers and without being subjected to any expensive fees charged.
Driverless cars will have many sensors and devices that will intercommunicate within the car. Also, cars will communicate in vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) modes. Therefore, driverless cars will need to pay for reliable communication services.
Actually, the use of driverless cars will require paying for other services, such as self-parking, Wi-Fi hotspots, laser rangefinders, and highway navigation data etc. Also, there will be many other services which can’t be imagined.
Thus, by exploring synergy between the blockchain technology and usage by an individual, creative entrepreneur will be able to develop business products that could benefit from block chain based capabilities for frictionless micropayments.
Different platforms are developing in order to facilitate the usage of blockchain technology. It is all about transactions. In lot of areas it looks like blockchain will replace the current centralized business model of the financial services industry and it is easy to see how it could revolutionize all.
A vast envelop of blockchain start-ups are focusing on the development of solutions for the financial services industry:
- Provide customers with access to crypto-currencies and support crypto-currency-related financial services (BTCjam, Safello)
- Track and settle both digital and mainstream financial assets in a cryptographically secure environment (Digital Asset Holdings)
- Reduce the complexity and number of intermediaries involved in existing transaction processes
- Better manage digital risk
- Improve the ability to verify historical transactions
The ability of the technology to provide a record, including the history of an individual’s transactions, is one area being eagerly explored. It’s a potentially global application that could provide more security over identity data and where that data is stored. In lot of areas, it looks like blockchain will replace the current centralized business model of the financial services industry.
Blockchain technology is complex, but the idea is simple. At its most basic, blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value — money, titles, deeds, music, art, scientific discoveries, intellectual property, and even votes — can be moved and stored securely and privately. On the blockchain, trust is established, not by powerful intermediaries like banks, governments and technology companies, but through mass collaboration. Blockchain ensures integrity and trust between strangers. It becomes very difficult to cheat.
In other words, it’s the first native digital medium for value, just as the internet was the first native digital medium for information. And this has big implications for businesses and the corporations. Blockchain technology can be helpful in many other business models of driverless car, one of that is shared transportation market.
The advantage of blockchain resides in the fact that transactions are accurate and precise without any trusted authority. So contrary to legal contracts, blockchain smart contracts have no physical authority. Smart contracts are computer algorithms that, without human intervention, can verify, execute and enforce the terms of a business agreement. By using Blockchain method many advantages can be added for the user like:
- Reduced duplications of transactions
- No deletion or reversibility of transactions
- Improved effectiveness of monitoring the transactions
- Increased speed of settlement of transaction as no need of transaction verification by central authority
Indeed, the driverless car is a promising area for growth and innovation, because it can benefit from smart contracts and smart asset solutions. The following examples illustrate the above:
Google is launching the RideWith application, with the use of “Waze’s navigation system to learn the routes user most frequently take to work and match them up with people looking for a ride in the same direction,” according to Reuters. With this other user can pay to fellow driver small fee and take a ride to and from work.
Driverless cars will bring with them revolutionary improvements in transportation as well as new challenges. Blockchain technologies are uniquely situated to play a central role in maximizing these improvements and minimizing these challenges.
