Cryptocurrency has seen a lot more adoption by mainstream avenues lately as it becomes more ubiquitous in American culture.
Just recently, Tesla bought $1.5 billion worth of Bitcoin and it wasn’t just the idea of global currency that attracted Tesla, but also the blockchain technology encrypting cryptocurrency.
More automotive manufacturers have been using blockchain technology to manage their operations and Tesla is the latest to join that group; in fact, in April 2020, Tesla partnered with CargoSmart Limited to enact a blockchain pilot program to track shipments coming in from China.
The Pilot Program
Blockchains are used by automotive companies to make the supply chain process a lot more efficient and transparent.
The Shanghai International Port (SIPG) and the China Ocean Shipping Company (COSCO) alongside Tesla held a pilot program for shipping cargo and used a blockchain to allow real-time access to a shared database for all parties.
Thanks to this program, Tesla accelerated its cargo pick-up procedures thereby shortening cargo release time and made their supply chain process more efficient.
The project was a success as it demonstrated how beneficial it is to have this data accessible to all parties and exchanged in real-time. Executive DGM of Operation and Business Department of SIPG Henry Huang said
“The [project] is a key component of our journey towards paperless, trusted, and seamless trade processes at the Port of Shanghai, and it demonstrates the benefits for supply chain stakeholders around the world.”
By utilizing this experience to its fullest, Tesla can take full advantage of this data exchange process to better their supply chain as well as avoid miscommunication by making things more transparent for all.
Mother of Invention
Tesla isn’t the only automotive manufacturer to take advantage of blockchain technology. According to a report by Allied Market Research, the automotive blockchain market generated almost $428 million in 2020 alone and research suggests this amount could climb up to $5.6 billion by 2030.
And there are two reasons for this large growth: better efficiency as we’ve already discussed and security.
Rearing its ugly head again, the COVID-19 pandemic showed how vulnerable how digital institutions can be as cyberattacks and hacking incidents saw a big increase in 2020; in fact, a big attack happened to a video game studio not that long ago.
#Cyberattacks are increasing, both in scope and frequency. The pandemic has highlighted this challenge as organisations adapt to remote work. How has this influenced #dataprotection landscapes? Read report > https://t.co/8dGcj7lwNL via @WhatsApp pic.twitter.com/eDV4aF9IoA
— The Economist Intelligence Unit (@TheEIU) February 10, 2021
Blockchains offer a secure method for transporting data that is well known to be tough and almost impossible to crack.
Tesla certainly recognizes the potential of blockchain in its supply chain, but whether or not the company will utilize blockchain in other ventures beyond moving cargo remains to be seen.
Ahead of the curve
Other automotive companies see the potential of blockchains like BMW who is planning its own blockchain called PartChain and French automobile manufacturer Groupe Renault might be doing the same as well.
The future of the automotive industry is furthering international connections with each other; the main obstacle was the logistics.
The technology wasn’t really there, but now blockchain is bridging gaps. BMW and other leading technology companies have founded the Mobility Open Blockchain Initiative (MOBI) to create a blockchain network for automakers, public transportation, and others like them to use.