Vehicle Registration on Blockchain
If you have ever bought your own vehicle or have sold one, or have been a part of an automobile manufacturing or dealing at any stage of the cycle, you would be familiar with the complication that is Vehicle Registration. Given the fact that all vehicles in the market have been sold and resold as they passed through multiple hands, it becomes a cumbersome task to maintain a legitimate record of the history of each vehicle and make it available when needed.
But before we go on to talk about the problems of the process of Vehicle Registration, we first need to understand why is Vehicle Registration such an important aspect of automobile dealing.
Automobiles change ownership more often than you would imagine. Whether you look at it in the terms of dealing in spare parts or in assembled vehicles, dealings by the middlemen or by the retailer who makes the final sale to a consumer, or in terms of the resale of a second-hand vehicle, there are a number of stakeholders who would very much want to know about all the history of the vehicle they are buying. Not to mention the insurance agencies, the police and other authorities and well, the government too need to keep tabs on the automobiles for various reasons.
The fact of the matter is that all these stakeholders need information about the vehicles, starting from its manufacturing story, covering its first sale, the accidents, if any, that it has been in, and any and all repairs and maintenance. This is crucial not for just to maintain a track record of the vehicle in question to determine its market value, but also for legal and insurance purposes.
Vehicle Registration is a way to facilitate this record keeping by maintaining a link between the vehicle and its owner. It might be or not be compulsory, depending on the law of the land. This helps the authorities with regards to taxation, insurance, or crime detection purposes. Also, it is a way for the automobile dealer to keep a track of their vehicles.
So, how do the automobile companies maintain their records for the vehicles they deal in?
The conventional way of recording, as you can guess, is extensive paperwork. Getting a vehicle registered in your name is a good 60 days process that requires you to fill out a lot of applications, documents; prove your residency of India; get a police confirmation; get the approval from the regional transport officer; have the vehicle inspected by the authority; pay taxes and registration fees. It is only after you manage to undertake these Herculean labors, that will you be eligible to receive your unique ID number and registration!
If this is the process that is supposed to be followed, you can imagine what problems are bound to come up every step of the way. Here are some of the scenarios you will probably find yourself stuck in if you are setting out for the labyrinth of paperwork.
· The verification takes up to 2 months!
The more intense the paperwork, the more time it takes. Once you get started with the process, there is no getting out. You will be running around from one office to the next, with a bundle of papers tucked under your arm. And even then, there is not saying what a little clerical error in one of the forms will cost you.
· Overspending on the Intermediary Agencies
To save yourself some time, you will end up hiring an intermediary agency to do all the work for you. The thing is they will get it done for you, no doubt about that. But the quality of work that you can expect form them will he highly unsatisfactory. Apart from the additional funds that you will be spending on them to get your paperwork done, you also have to be skeptical of them or else they will trick you by their fraudulent practices. It might so happen that the intermediaries might play around with your documents, falsify them or purposely displace them for their own vested interests.
· Fraudulent practices
When records are being manually prepared on paper, it makes them prone to mishandling — whether intentional or out of negligence. Clerical errors are to be expected in paperwork. Double entries might also cause more harm than good. There will also be frauds making false entries and tempering with the records for their own benefits. Manually-managed records of vehicles are open to all these fallouts.
So, how can the automobile dealers expect to solve these problems?
One solution that seems probable based on the technologies currently at large in the market is Blockchain. Blockchain is a distributed ledger to record any and all kinds of transactions. Blockchain is inherently a decentralized, open-source platform. It operates through multiple nodes working from multiple locations, and thereby enabling all stakeholders to access the data through a shared database.
Imagine a car. And then imagine a diary that is set apart for recording everything about that car. So, when a car is manufactured, the manufacturer will take down everything about the spare parts and assembling of the car. When that car is sold, the seller will make an entry in that diary, with the name of the new owner, date of the transaction, etc. If that car has been in any accident and has undergone some repairs or maintenance work, it too will be reflected in the diary entries. If it has to do with any criminal incident, it will be recorded too for future reference. On reselling the car, all these information will be made available to the new buyer, so that full disclosure can be achieved and a fair value of the car evaluated.
In terms of Blockchain, this diary will be replaced by a ledge account that will be the sole source of data to be accessed by all parties involved. Only the authorized personnel with a private key will be able to record the transaction. And even if somebody goes on to alter a transaction, it will be recorded as a new transaction and it can easily be traced back to them. Therefore, eliminating the space for tempering with the records or indulging in fraudulent practices. And since, it is open-sourced, everybody can access it as and when required.
How can Blockchain be used to create a solution for the Paperwork Conundrum?
One way is through a mobile application. The basic idea behind this mobile application is that as soon as the sales takes place, the seller uploads the purchase details of the buyer together with his/her photograph on the Blockchain through a mobile application. The data that has been entered includes all information about the vehicle (such as engine number, chassis number, model, color, etc.) and about the buyer (name, address, etc.). An authorized personnel with the private key, will make a blockchain registry from the available information.
Certain apps will, for instance, also allow the police on the roads to run a recognition test for the owner and the vehicle just by uploading a photograph of the vehicle owner through his/her smartphone application.
How will Blockchain benefit the Vehicle Registration process?
· Data-integrity: Blockchain enables all information to be accumulated into one place so that it can be easily accessed and managed. Vehicle Registration, Citations, Insurance Details and everything else accruing to the vehicle in question is integrated on this platform. So, that when you log in to find out something about one particular vehicle, what you will find is everything there is to know about it. A comprehensive, all-encompassing history.
· Keeping a check on fraudulent practices: Anybody who is even remotely aware of the Blockchain technology will tell you how authentic it is. It is structured in such a way that only authorized personnel can make entries or change records. Hence, there is no need to worry about any kind of tempering with the data or falsification of information.
· Considerably reduces the time needed for registration: It is estimated that using the Blockchain technology will considerably bring down the time required to get vehicle registration done — from 60 days to 3 days. This means that not only will you get quicker services, but also better services.
Blockchain has made its way to many industries — banking, accounting, oil and energy supply — and now it has begun to impact the automobile industry as well. Just like in every other industry that it has affected, in this regards to it has made the process of Vehicle verification easy and more secure than it was before. It is only a matter of time before it is incorporated into other aspects of this industry as well.
Sagar Arora is a freelance writer and working for the past 4 years. He is from a technical background and have expertise in domains such as fintech, AI, and programming languages such as C, C++, python, Php, java etc.
Blockchain Business Review from Apla provides high-quality educational material from the world of blockchain to inform the business community of the competitive advantage that can be gained by integrating distributed ledger data storage within organizations. Our mission is to promote knowledge about blockchain and its uses in both the private and public sector and demonstrate the value of blockchain integration.
