Two cryptocurrency startups are working together to create a blockchain database of second-hand cars. This could ultimately change the way vehicles are sold, insured and financed in the US. The blockchain pilot will roll out with the DMV.
The ambitious blockchain project is the brainchild of the Automotive eXchange Platform and the not-for-profit Fusion Foundation. There are plans to list the over 10.5 million used vehicles in the AXP database on the platform.
Max Kane, CEO and founder of the AXP, said the model would therefore help reduce the scope for a lack of transparency in used car sales.
“There’s a million vehicles on the road that have ‘washed’ titles, which means there is fraud there.”
In fact, the insurance industry handles billions in fraud claims due to “missing information, drivers providing the wrong information and inaccurate reporting”.
The same technology that powers cryptocurrencies like bitcoin also powers the platform. Unique, immutable information about vehicles will be recorded on the platform. Meanwhile, it will allow access to the database throughout the supply chain to improve the quality of information available about vehicle history. This includes access to insurance and financing data.
The blockchain pilot system is proving to be a success. The platform is now rolling out in the first half of 2019. So far, the strong interest reported comes from the the Department of Motor Vehicles (DMV).
John Liu, chief product officer at the Fusion Foundation, said the platform would run on similar technology to bitcoin and ethereum.
“We don’t need the government or dealers to worry about running a node yet. We want them to use an application that they are familiar with. The number of nodes will be as much as we need to support a secure blockchain.”
The AXP network already connects with 25,000 car dealerships across the US. In the process, bringing together the most comprehensive data set available for second hand vehicles.
The new platform is the latest example of the multitude of ways blockchain technology is disrupting industry. However, one of the most significant beneficiaries of the technology is the automotive sector in particular. Nevertheless, blockchain is also already making an impact on a wide range of sectors.