Last week at the VeChain Summit in San Francisco, Cihan Albay from BMW Group outlined the new blockchain-based VerifyCar app built with VeChain. VeChain was part of the BMW Startup Garage, and the companies have been working together for more than a year.
VeChain has a public blockchain VeChainThor focused on enterprises. It was initially founded in China, but the umbrella foundation is in Singapore. It has several enterprise clients, including Chinese auto company BYD, government-owned People’s Insurance Company of China (PICC) and shareholder DNV which is a major global provider of quality audits. The company conducted an ICO, and its market capitalization is around $390 million.
What is VerifyCar?
Mileage fraud is a widespread problem. BMW’s Albay explained that in Germany every third used car sold has a manipulated odometer. The average impact is €3,000 ($3,390) on the price of a vehicle, and the total annual damage is €6 billion ($6.78 billion). The aim of the VerifyCar app is for the car owner to be able to prove what he’s done with the car in a verified way.
Each interaction with the car is stored as a hash on the blockchain. Everything from changing a filter, replacing a battery, and an annual service. Insurance claims would be included as well. BMW cars also have sim cards, and they periodically will send data to the blockchain. So the information sources are both in-vehicle data and external.
The raw collected data is stored on a secure private server, and an indecipherable hash is logged on the public blockchain which can be used for verification.
The app has already been tested with internal cars, and BMW is keen to continue with the project. However, the public is aware that blockchain data can’t be deleted, so that’s an issue they are currently considering before a public roll out.
How VerifyCar fits in
The German car company is currently exploring blockchain in three areas: mobility, supply chain and customer-centric applications.
BMW has existing mobility services such as DriveNow (short term car hire), ParkNow, ChargeNow. Potentially blockchain can enable an Airbnb style service for cars given most owners only use their vehicles for a fraction of the time. Looking forward to autonomous driving, an auto will take itself to be recharged and will need to make a payment using machine-to-machine communication which may be enabled via blockchain, and likewise for parking.
Supply chain is one of the most common blockchain applications for parts traceability and also to verify the authenticity of documents.
Targeting customers, BMW is exploring blockchain for financial services, loyalty programs and to verify data off a vehicle.
BMW’s blockchain use case filtering
BMW starts by selecting a problem and then looks for partners and technologies. Albay outlined four criteria for deciding whether blockchain is appropriate.
- Several different organizations and participants need to share data
- Data must be verified
- Possibly there’s a marketplace and process controlled by intermediaries
- It needs to have clear business value and be in line with strategy
They also assess applications on a value and time-to-adoption matrix. For example mileage verification, supply chain and quality chain are lower hanging fruit and of moderate value. The primary benefits are transparency and efficiencies.
Applications that take longer to roll out include financial transactions and value exchange. For example, paying for charging, p2p car sharing and a parts market.
And in the more distant future, blockchain can be layered onto other technologies such as autonomous driving, AI or data markets and robo taxi fleets.
Neither the author nor members of the Ledger Insights team own VeChain tokens
