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The Automotive Sector and Blockchain — Part I

Is trust what we need to enable the next generation of mobility services?

Blockchain technology is highly beneficial for mobility industries in some areas. We shall see that decisions need to be prepared and made sooner rather than later. A limited understanding of this multi-dimensional new technology and inadequate scoping of projects have led to some frustration for early adopters. Additional research and operational trials are still needed for Blockchain technology adoption. Regulators should accept that Blockchain technology increases transparency and trust, much needed after technology scandals in various industries and a global ‘trust recession’ that is more and more affecting our societies.

However, now is the right time to take a close and thorough look at this space.

A Car Wallet to secure V2X Financial and Data Transactions

The vehicle of the future can still have a driver or be autonomous, carrying only passengers. However, in all cases, cars will have more autonomous behavior including payment processes. Some payment use cases already have many solutions, for exam- ple, for parking payment (contactless, credit card, apps) where the advantages of DLT may seem less apparent. But they are nev- ertheless important. Combining the car and the driver or passen- ger’s identities means that personal or financial data need only be entered once, simplifying the multiple app issue. When a driving licence is required, that too will also only ever need to be entered once into the user’s Blockchain identity, and personal data will not be exposed, it will just be confirmed as existing and having been verified. 9 For all vehicles, but especially for AVs, there will be cases where settlements happen automatically — within smart- contract-defined parameters — without the driver or passenger needing to know or having to trigger it.

For this to work, the vehicle should have a built-in industry-grade wallet that is fully integrated into the cars’ infrastructure and be totally secure. For specific niche business models, such as trucking or rental car fleets, also a stand-alone car wallet form factor can make sense as a retro-fitting device. Only then can the V2V com- munications be trusted, primarily when road safety may depend on it — for example, if vehicles automatically share road conditions.

To sum it up, M2M transactions between vehicles and smart (city) infrastructure will contribute to:

Efficient Vehicle-to-X transactions
New Business Models based on automated settlement options Road safety
Traffic and route optimization
Exchange of sensor data (air pollution, temperature, …)
Toll payments
Local news and information
Location-based services and
Incentivization schemes (for desired behavior or loyalty schemes)

Interacting with authorities

Blockchain promises to do away with many central bodies. How- ever, local authorities that manage car registration processes are here to stay and must have seamless access to information from Car Wallets. Once the vehicle’s ID and fingerprint are validated and available on the DLT, the Department of Motor Vehicles (DMV or ‘Kraftfahrtbundesamt’ in Germany) can check against these transactions and co-sign to officially registering (or revisioning) a vehicle and — in the mid-term — issue related documents. In the long-term, paper documentation will probably become redun- dant. In the case of the DMV, the secure chip can sit in a signature device that the department uses to verify and sign related trans- actions. The hardware car wallet described here is Blockchain- agnostic. The final selection of underlying Blockchain platform is not something that needs to be fixed before commercially launch- ing a wallet project. Chapter 4 describes some projects that are DLT agnostic.

Tamper resistance — fraud detection

A Car Wallet also creates a more tamper-proof environment. It can check the vehicle’s integrity after an offline period, even if the battery was disconnected. At every start-up, a secure boot mechanism checks the drive-worthiness and availability of all components and IDs that are part of the defined cyber-physical fingerprint. The car then compares its own internal state with the last verified and accepted cyber-physical fingerprint. An age-old issue with vehicles is mileage fraud. Car Wallet can help here. The device securing the vehicle identity is connected to one or several of the vehicle’s data bus systems from where it collects telemetric data like mileage or battery levels. This guarantees that the mileage data comes from a trusted source. Periodically such telemetric data gets signed with the vehicle ID and attested on a ledger such as IPDB 10 . We use IPBD as an example ledger here, many others could be suitable. IPDB has the benefit of storing only the hashes of data or transactions on the public ledger, not the data itself which can be kept in a permissioned environment. This means that one can attest mileage levels without making pri- vate or sensitive data public. Typically, the public ledger will hold relevant mileage data without providing open access to location data. Other data, like service and maintenance work, can also be linked so that mileage fraud can easily be detected when check- ing the data history on the ledger.

Read or Download White Paper here.

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