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The Rise of Virtual Insurance in Hong Kong

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Virtual Insurance, also known as “Internet insurance,” is a branch of the rising industry Insurtech, a crossover between insurance and technology. Virtual insurance specifies companies or products that operate without the need of a physical branch – the entire experience starting from application, getting insured, and claiming coverage, can be done via an online system. Virtual insurance has been around as early as 2013 in countries such as the US and Germany but is still considered a new field of insurance in Hong Kong that has yet to be widely exposed to the public.

The insurance industry in Hong Kong is expanding at an unprecedented pace. In 2017, the total gross premiums of the Hong Kong insurance industry had increased by 8.3% to $489.2 billion[1], and Hong Kong residents has the highest insurance premiums-per-capita (17% by GDP percentage). Driven by income growth and broader old age provisions, InsuranceAsia sees an 8.2% growth per year in the Hong Kong insurance market for the next 10 years[2], providing lucrative opportunities for insurance companies. Among the players include multiple virtual insurance companies that are authorized to provide online products by the Hong Kong Insurance Authority (HKIA).

Bowtie Insurance is the first company to acquire a virtual insurance license in Hong Kong. HKIA gave the nod in December 2018, taking a big step in embracing the era of Insurtech in Hong Kong. Bowtie currently offers medical plans under the Voluntary Health Insurance Scheme (VHIS) by the Hong Kong government, claiming to offer some of the best rates in Hong Kong.

Bringing the whole insurance experience online is beneficial for both the company and the customer. Unlike traditional insurance companies that overwhelm customers with various products and numbers, Bowtie’s website is simple and extremely user-friendly. Rates are available on the website and dynamically priced by taking 3 metrics from the user: gender, age, and smoking habits.  

The application process requires customers to fill in personal information, medical history, and HKID for verification. Customers can be can finish the form and get insured in under 10 minutes, compared to weeks of waiting time with traditional insurance companies. Coverage claims are also processed online, simply file an application online and a coordinator will follow up and guide policy holders through the process. Payments will be transferred into the designated bank account within 3 days once alld the required documents are uploaded.

The founder and CEO of Bowtie, Fred Ngan believes that this simplified process and digital approach will attract younger consumers to purchase insurance under the VIHS. “We do not plan to compete with traditional insurers,” said Ngan. “We want to target a younger generation of customers who are tech savvy and like to do everything by themselves.”

The digital platform allows company agents to handle multiple application cases at the same time. Files and data are stored digitally, which saves up tremendous time and manual work compared to paper-based traditional insurance providers. Bowtie has a small team of less than 50 employees for technology development and customer services.[3] By eliminating unnecessary middlemen such as agents or banks, Bowtie is able to effectively cut down personnel costs and promise its consumers zero-commission fees for all of its products.

Some people might worry about the legitimacy or safety of these virtual insurance companies. But Clement Cheung, CEO of the HKIA assured that “virtual insurers still have to follow the same high-capital and conduct requirements as traditional insurance companies.”[4] To further protect the  interests of policy holders, HKIA listed out principles for virtual banks, including conditions and restrictions on products that are offered. Currently, online insurance providers are restricted to more simple services while sophisticated products remain only available in major insurance companies as they believe that not all insurance products are suitable to be sold online.

Following Bowtie, 3 other companies have also received the virtual insurance license in March 2019, namely the Chinese company ZhongAn Insurance, local startup OneDegree Global, and traditional insurance player Asia Insurance Company. This rising trend implies the digitalization of the insurance industry and manifests the growing interest in the Insurtech industry. Aside from virtual insurance companies, there are also startups like imSure and gobear democratizing the insurance industry and make information accessible. Another company, GenLife is using AI and Machine Learning to intelligently price risks for personalized insurance products.

Despite these developments, the Insurtech industry in Hong Kong is still in its primary stages compared to other developed markets like London or San Francisco, where more complicated fintech products are introduced to optimize insurance processes. Examples include using blockchain to speed up the underwriting process and to prevent fraud, and AI to calculate real-time risks based on multiple parameters. With the growth of Fintech and support for innovation from the HKIA, the outlook of Insurtech in Hong Kong is optimistic and will hopefully bring more benefits for end-customers in the near future. 

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Virtual Banking——The Combination of Traditional Banking and Internet

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Back in early May 2019, the Hong Kong Monetary Authority (HKMA) has issued all eight virtual banking licenses which means that the revolution in Hong Kong banking industry has officially begun. As the world-renowned financial center, Hong Kong has a thriving banking industry and meanwhile in a city of only 7 million people, it has attracted over 160 traditional licensed backs, with an average of 21.43 bank branches per 100,000 people which is way higher than the global average of 12.6[1]. In light of the fierce competition within the industry, questions arise concerning where will virtual banking be heading towards?

The uniqueness of virtual banking

A virtual bank is defined as a bank without a physical branch in which all services or transactions such as loans, deposits etc. are conducted online. In fact, the trend of electronic banking services has existed for a long time and major banks have already launched their own mobile phone applications to advance their services. However, the reason why virtual banking is at a highly-advantageous position is not about its focus on pure electronic; but to further enhance banks’ operational efficiency by applying new financial technology (FinTech). For instance, loan procedures are often very complicated for traditional banks. Instead of using traditional credit rating, virtual banks will use technologies like the big data to quickly assess the credit rating of customers and the process is much faster and comprehensive.

The impact of virtual banking on financial markets

Since major internet companies had begun to actively expand their FinTech businesses, it rendered the status of traditional banking untenable by launching various upgrade programs to embrace the internet, including the launch of virtual banks. Hong Kong as a financial and international center, influenced by the development of FinTech in the mainland, the introduction of virtual banking will undoubtedly bring revolutionary impacts into the local banking industry. Meanwhile internet and smartphones technologies which also play major parts in advancing financial payment are gaining popularity, the core nature of the bank has not changed. Yet the payment patterns and tools have been different: from the traditional paper-and-coin trading to the use of computer and mobile phone network. These new transaction methods can complete actions such as fund transfer and financial flows within a short period of time. Therefore, where traditional banks are no longer capable of fulfilling customers’ ever-growing demand for efficiency, virtual banks come right on the spot by providing round-the-clock services and meeting customers’ individual needs, thereby changing the current landscape of Hong Kong banking industry.

Potential problems of virtual banking

Although virtual banking can bring transformation and a new way of thinking into the traditional banking industry, small and medium-sized banks may not be able to withstand such a huge impact, thereby posing immediate threats to their operations. To ensure that traditional banks can still retain customers after virtual banks come into the market, they must update their technology products from time to time. Because small and medium-sized banks usually lack the funds and fast response to cope with the challenges, they will inevitably be phased out sooner or later.

On the other hand, as the development of virtual banking demands astronomical research costs, major banks are not willing to pioneer for the development because of the great risk that comes with it, let alone other small and medium-sized banks. As a result, the immensely high threshold of applying virtual banking is also one important factor that will hinder its development. Therefore, it may not be feasible to apply virtual banking widely in various areas in the short term, and the immaturity of relevant technology will eventually blow customers’ confidence.

Besides, as virtual banks do not have physical branches, customers’ confidence will solely depend on their trust towards the bank. In addition to the worry of cybersecurity, the short-term launch of the plan may deter most customers. For the older generation, the fear of electronic will also render them reluctant to accept virtual banking that may cause inconvenience. Therefore, physical banks are still irreplaceable and it will take some time for virtual banks to be accepted by the general public.

The security of electronic finance is still questionable. Although the launch of virtual banking can offer more choices for us to manage our assets, if personal data is not adequately protected, it may intensify the problem of data leakage which encourage illegal activities and financial crimes and finding the way to solve this problem is not something that could be done within a short period of time. As long as the problem remains unsolved, it may deter banks from developing new technologies and consequently, hinder the development of FinTech as a whole.

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2019-04-15 Decoin Hong Kong Meetup

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On Monday, April15th, Decoin and 8Blocknews successfully co-organised <Decoin Hong KongMeetup> in Admiralty, Hong Kong. In the meetup, Decoin announced their keyproject development and the D-Bot features demonstration. Also, Decoin exchangewill be officially launched on April 30th, 2019. Decoin with its own developedD-bot arbitrage bot, will allow investors to have a stable return on their investments.There is zero commission to trade on Decoin and it has a shared revenue scheme.

Mr. Shay Perry, Founder and CEO of Decoin, Ms. LilyNoriko, CCO of Decoin, Mr. Rex Wong, Chairman of the Hong Kong BlockchainIndustry Association and Executive Director of Blockchain Investment Fund, andMr. Mass Wong, Founding President of the Guangdong HongKong Macau Bay AreaBusiness Association of ASEAN attended and gave their sharing during the event.Leading professionals from the blockchain, technology, finance and otherindustries, and various business chambers.

Decoin CEO and Founder, Mr. Shay Perry, a serialentrepreneur, has created four successful start-up companies. This time heintroduced his fifth start-up project, Decoin. Decoin COO, Ms. Lily Noriko alsointroduced how Decoin exchange works and its advantages.

Decoin is an innovative digital assets tradingplatform and cryptocurrency investment tool. Decoin is developing its own,Arbitrage Bot, the D-bot, built by Decoin’s team of experts that connects (viaAPI) and continuously monitors different crypto exchanges looking for variousindicators to recognise trends and automatically execute trades. Advantages ofthe D-bot include: zero commission, shared revenue, and three level of tradingrisk. Decoin will initially be listed on the Decoin Trading & ExchangePlatform. As the number of Decoin holders increases, Decoins will register andbe listed on additional digital asset exchanges.

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Blockchain Will Reshape the Commercial Real Estate Industry

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The core operations of commercial real estate include purchase, leasing, sales, financing and management. For a long time, commercial real estate (CRE) has been carefully keeping data on rent levels, property prices and valuations confidential. This has cause the CRE core business process very inefficient. Blockchain technology has the potential to increase the transparency, efficiency, yet saving costs for CRE owners.
There are enormous opportunities for CRE in the following aspects.

  1. Efficient and reliable property search process
    In CRE transactions, most individuals or brokers use multiple service providers to obtain relevant data, such as property information, rent, location, etc., but these data are subject to problems of human intervention, outdatedness and incompleteness. MLS, the housing resources sharing system based on blockchain technology, allows data to be distributed in a peer-to-peer network. Housing resources can be viewed in anytime. It can also provide more accurate and detailed information on ownership issues and historical leases, meaning market participants can get more accurate information at a lower cost.
  2. Reduce investigation costs before transaction
    Before completing a CRE transaction, a lot of time is spent on financial and legal due diligence, so as to make sure the rent or selling price is reasonable. This involves a lot of verifications of document authentication, where errors might occur, incurring high commission expenses. According to a survey conducted by Statistics Canada, Canadian residential and commercial real estate transaction fees and commissions account for about 2% of GDP. If blockchain technology is implemented for the development of digital identities for real estate, a lot of issues on documents and physical identities authenticity can be avoided. The digital identity of the real estate and the related transaction parties constitute a complete and secure online transaction record, which greatly improve the convenience and accuracy of due diligence.
  3. Smart contracts increase transparency of property management and asset management
    The relationship between property, tenants, homeowners and developers is complex, not to say the complexity of property management. The need for continuous execution, tracking and recording is costly. Blockchain technology brings a simplified solution to CRE management. The smart contract clearly records the agreement and the responsibilities of both parties in a digital form, making the transaction more transparent. The smart contract can also make the first payment of the lease or sale to be done in real time, thus no longer being subject to geographical and working hours limitations.
  4. Process financial and payment more efficiently
    The traditional commercial real estate payment process and transfer model are often complex, cumbersome and opaque. Blockchain can simplify the financing process for loan applications. The digital identity of real estate saves time and effort for due diligence without suspecting data integrity. Moreover, in cross-border transactions, a number of intermediaries are involved, generating a large amount of foreign exchange charges and delaying the delivery time. The blockchain can record the trading objects, fees, exchange rates, trading hours and other information of the buyers and sellers in the smart contract. The transaction is completed through the network. Fast and accurate settlement process minimize the settlement risk and payment delay.

Blockchain technology has great potential for commercial real estate, providing an efficient and reliable property search process, reducing the investigation costs before the transaction, smart contracts also can make property management and asset management more transparent, and the process of financing and payment more efficient. Blockchain technology greatly enhances the efficiency and operational transparency of the industry while reducing costs and creating more industrial value.

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How to distinguish between virtual currency, digital currency and cryptocurrency

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Virtual currency is a non-real currency. It includes digital currency and cryptocurrency. Virtual currency is invisible relative to the physical currency. Also, it is intangible, hence it is so-called virtual currency. For example, online game coins, such as SNDA’s coupons, as well as Tencent’s Q coins, Q points and so on. Even the fictional currency in comics is considered virtual currency. Virtual currency contains digital currency.

Digital currency, which is the currency that emplements digital technology and is generated by computer programs and circulated on the Internet. In general, for example, the gold coins in online games, Q coins by Tencent, Bitcoins, are all digital currencies.
Cryptocurrency, that it is included by virtual currency or digital currency and has the smallest range. It should only be based on blockchain technology (including cryptography, encryption algorithms). Therefore cryptocurrency are the blockchain currencies such as Bitcoins and Ethereum. The key to determine whether a currency is cryptocurrency is to identify if it applied blockchain technology and decentralized. For example, the Q coins issued by Tencent, which is a kind of virtual currency in terms of its imvirtuality. It’s also a digital currency because it was generated by computer programs and can be circulated on Internet to buy products. However, it is not belong to cryptocurrency, because it didn’t implement any blockchain technology.

If a currency adopts blockchain technology, but it is not decentralized, it is only a virtual currency; if blockchain technology is adopted and decentralized, it is cryptocurrency; if it is still centralized, it is only digital currency, such as a country has issued a national digital currency, which is under the control of this nation.

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Blockchain Revolution: How the Technology is Impacting the Education Industry in Four Different Ways

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In an increasingly globalized society, the number of people studying abroad is increasing, and the Internet is also gradually shaping education and learning in the form of massive open online courses, webinars, online Q&A platforms. Thus, the education industry is increasingly in need of global sharing of data and optimization of network architecture.

Blockchain can help the education industry achieve the following (but not limiting to): degree certificate record-keeping, institutional cluster cooperation, data management and sharing as well as virtual currency trading. All this helps in preventing seniority falsification and achieving global certification from the underlying technology infrastructure.

Degree Certificates on Blockchain
The use of blockchain to record students’ academic achievements, reward certificates, degree certificates etc. can prevent counterfeit certificates. At the end of January, Sony disclosed that the company had developed a centralized, blockchain-based modern ledger to store educational materials, share them online, adopt new records and evaluate learning methods. In February 2016, Sony had announced the adoption of blockchain technology, applicable in the field of education. The company had developed a sharing technology that enables open plus secure academic and progressive records. MIT has been using blockchain to authenticate digital badges and open source code.

Cluster Cooperation in Educational Institutions
Boston University, the Australian National University, the University of British Columbia, etc., have formed a code-sharing certification agreement to form a federation of universities; Open class providers can also adopt the same agreement, both to ensure the security of certification, but also to allow different platforms to provide the same certificate, which is recognized globally.
Qing Dynasty Education has collaborated with an enterprise engaged in the underlying technology of blockchain to build a new educational medium, which will apply blockchain technology to cover educational institutions, realize media sharing resources and provide O2O advertising. For instance, a K12 tutorial school can co-advertise in a piano tutoring organization to avoid competition to some extent within the same industry, and to achieve live information sharing.

Information Authentication Management Database
Educational institutions can use blockchain to build an information certification management database in order to achieve global synchronization of the academic qualifications among various institutions data stored in the chain. For say, if students change their educational institutions, switch into new jobs, or move to new countries, their academic qualifications data can be obtained and modified by those in need of it. This helps to avoid cumbersome clerical exchanges and accreditation between different databases in different countries.
If blockchain can continuously crawl data from various forms of learning, such as attending meetings, courses, and store these experiences and learning opportunities in the system, continuous professional development can be tracked more easily and no longer be as fragmented as it used to be.

Education Currency
The use of virtual currency as a trading currency can further enhance the efficiency of the online education industry. Educoin, a digitally encrypted virtual currency for online educational content sharing, opened its recharge business in February last year for selling educational services, the sharing of educational products and technologies, along with the disclosure and evaluation of teaching quality.

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Potential Value of Blockchain in Advertising Industry

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The World’s First Blockchain Advertisement On-Blockchain Conference and Seminar was held in China in November 2018 and it has reflected the gradual development of the application of blockchain in the advertising industry. In the context of traditional advertising business models, customers enter contracts with digital advertising companies to pay for production costs, distribution costs and the purchase of ad slots. This process lacks transparency and is lengthy, leading to risks such as process clutter and fraud. The risks though can be mitigated through blockchain application. The advertising industry can be benefited in a number of ways: structural optimization, process transparency, fraud prevention, user portraits, and user incentives.

Structural Optimization

Excessively complex ecosystems and the multitude of industry players have led to a gradual decline in the industry’s transparency, making the system ever more complex and bloated. Blockchain can directly connect advertisers and media, skip intermediaries such as advertising platforms; thereby improving efficiency and reducing the number of middlemen. More importantly, it can better price the user’s attention value and reduce the expenditure on services provided by middlemen.

Transparent Procedures

Since all operations are recorded and cannot be tampered with, the transparency of the advertising business process will be greatly enhanced. The use of blockchain for auditing can easily enhance buyer transparency through data collection and media contract validation, while for sellers, blockchain can provide certificates to provide publicly audited log and view counts. This allows transparent disclosure of actual clicks or views of data while information such as ad delivery effects, data, and pricing can be better executed.

TruthAgency, a marketing group based in the UK, is helping to mitigate transparency issues in programmatic advertising by quickly reviewing ad transactions. TruthAgency aims to provide a single view across the value chain and a single clear fee for advertisers.

Fraud Prevention

According to the audit reports of advertising agency companies, The&partnership and Adloox, in 2017, advertisers suffered up to 16 billion dollars in losses due to advertising fraud (robots, using back door of advertising service network, etc.). The existence of Blockchain makes the tampering and mass production of false IP more difficult, avoiding false traffic counting methods such as robot clicks and IP spoofing, thus reducing advertising fraud and its losses.

User Profiling

User profiling collects and analyzes consumer attributes and abstracts a user’s business overview. The traditional advertising network uses different metrics, making the cross-checking by advertisers very difficult. Blockchain can improve the situation with respect to data dimensions. To achieve cross-contrast analysis of multi-dimensional data, each user will have a profile on the chain to accurately describe their preferences, social attributes, lifestyle habits, consumer behavior and other key information. The improved quality of data can uplift the accuracy of user profiles and investment conversion rates.

User Motivation

In order to solve the existing bloated digital advertising market, Basic Attention Token company has issued the BAT token, a digital currency asset used by advertisers and users to solve advertising display and user incentives problems. The company’s ‘brave’ browser uses the ANONIZE algorithm to analyze user behavior, such as which links are clicked the most, or which sites do users stay on the longest. These behaviors can be quantified using the “Attention” unit by embedding the blockchain ledger system in the browser, and the token that this system circulates is BAT token. Usually, when ‘brave’ users watch advertisements or high-quality content, they will be rewarded with BAT tokens because of the attention paid by them. The website owner will attract users’ attention with advertisements and high-quality content while the system will work to reward them. Both the user and the website owner receive BAT tokens from the merchant’s advertising expenses.

The wide application of blockchain technology is changing the traditional media industry and triggering a new round of changes in business processes, organizational institutions, governance systems and business models.

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The Integration of Blockchain and Government Affairs Chain

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The Chinese government has introduced policies to encourage the adoption of blockchain technology throughout different levels of government. The government affairs chain can make use of decentralized blockchain to provide automated departmental and government services to citizens, civil servants, etc., and to create a public space in combination with various fields of state affairs. This can help to achieve information sharing in various fields along with transparency, efficiency and reliability of data management.

Governments at all levels in China have issued policies to encourage the application of blockchain technology to transit to an “e-government”, which has made progress over recent years. Through decentralization of blockchain technology, the government aims to provide automated departmental and government services and to create a public space in combination with various fields of state affairs. The sharing of data and information in various fields raises transparency, efficiency and reliability of data management.

At present, the application of government affairs chain is mainly focused on data storage and sharing. As the technology matures and adoption increases in the future, there can be multiple areas for research and development, such as digital identity, intelligent law, electronic invoices, e-certificate and ecological security.

Digital identity
The registration management department can use blockchain to carry out related services. For each registration item, when provided with the digital identity, it can be managed in combination with the blockchain system. This allows more convenience in terms of control for reading, modifying, and adding permissions such as attributes and entries. Through the multi-level authority system, the interaction and division of labor between different departments, industries and organizations can be seamlessly connected in the application.

Intelligent law
Intelligent law is part of the government chain ecosystem that regulates documents and modifies interface permissions through smart contracts. It can determine the conditions and restrictions stipulated by national legislation, improve the speed of verification of registry regulations, and guarantee accurate enforcement of the law. When faced with legal ambiguity or other special circumstances, the wisdom law will be forwarded to the authorized personnel for digital signature to make a decision to confirm.

Electronic invoice
In August 2018, blockchain electronic invoices were implemented in Shenzhen. In November, the Shenzhen branch of China Merchants Bank acted the first blockchain electronic invoice. Electronic invoices have the advantages of uniqueness, non-deformability and mutual participation. The whole process of ticketing, billing, accounting, and reimbursement can be fully recorded and traceable. The tax bureau and the billing party can participate in the bookkeeping. It is convenient, fast and can effectively solve existing problems of using traditional electronic invoices, such as unlimited copying, repeated printing, difficulty in authentication, tax evasion and other issues.

Electronic certificate of deposit
In September 2018, the Hangzhou Internet Court confirmed for the first time that the blockchain electronic certificate of deposit carries legal validity. As of January 2019, Beijing has built 17 judicial blockchain nodes. All qualification certificates can also be recorded using blockchain. Since the beginning of 2018, educational institutions such as the Massachusetts Institute of Technology have also begun to award blockchain digital degree certificates to recent graduates.

Ecological safety
Using blockchain technology, executed transactions cannot be tampered with. Data on all nodes can be updated synchronously and authority management is clearly defined. These features can better protect the security of the government affairs chain ecosystem. The uplink data forms a de-personalized data fingerprint through an algorithm. Permission is required when we want to access the data storage to read stored information. Putting into context, the data on the chain is “meaningless” without having permission, therefore we do not have to worry about privacy leaks. Blockchain provides a secure transmission channel, and the government blockchain can be accurately tracked.

“In the future, we will go through a process of government chain-up,” said the Director of Institute of Industrial Economics of CASS, Information Center, Ministry of Industry and Information Technology and the Director of the Editorial Board of ‘China Blockchain Industry White Paper 2018’, Mr. Yu Jianing. He also suggested that governments at all levels should actively coordinate and open up more application scenarios. He said, “some good examples are needed for the better industrialization of blockchain,” and to welcome the era of digital government.

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Practical application of blockchain in smart cars

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Under the acceleration of the smart automobiles, the puzzle of extracting valuable insights from massive amounts of big data is the focus point of today’s era. With the intervention of blockchain technology, the extraction of big data will have a revolutionary development opportunity in the automobile industry. This article focuses on the analysis of blockchain application in the automotive industry and its potential for development.

Practical application of blockchain in smart cars

As the development of smart cars accelerates, discovering valuable information from massive amounts of big data is the focus point in today’s era. From the industry’s perspective, the effective use of big data will not only lead to more precise services along the entire life cycle of a car, but also aims to replace the automobile itself as the main profit point. With the introduction of blockchain technology, it will provide revolutionary development opportunities for automotive big data.

Recently, VISA and DocuSign announced a partnership program and will use blockchain technology to create specific solutions for the car rental industry. Under this partnership, car rental procedures can be simplified and be more secured. The customer only needs to select the car that he wants to rent, and the transaction is sent through the public account in the blockchain ecosystem. The customer then signs a lease agreement and insurance agreement, which will be uploaded to the blockchain network for confirmation. The application of blockchain can further simplify the process of car rental and expand its application to other businesses in the automotive industry.

Application of blockchain in automotive industry:

The modern nature of blockchain can optimize the overall operation of the automotive industry. The possibilities for application are very broad, including the following:

  1. Vehicle Maintenance Procedures

Through the application of blockchain technology, the procedures for car maintenance and repair can be simpler and more secure. The blockchain’s network database not only records the parts used in automobile manufacturing, but also helps us distinguish between automotive parts manufactured by humans and robots. This large database can systematize the entire vehicle maintenance program and reduce the occurrence of counterfeit cottage vehicle components; increasing the overall safety of vehicle maintenance. The dealers can also safely transmit the data to the owner through the large database in the blockchain network, thereby improving the transparency of the entire vehicle maintenance process. This increases the owner’s trust in the vehicle maintenance process.

  1. Car permits and registrations

The smart contract enabled by blockchain can change the entire operation of car licensing and registration. Technically, the blockchain enables the registration and tracking of all valuable human items while smart contracts can improve the security and transparency of the entire process. When car manufacturers record registered vehicles on the blockchain, we can also use the system to track vehicles. This integrated system will reduce incidences of car thefts and increase consumer trust in the trading of second-hand cars.

  1. Car sharing
    The transparency and security of smart contracts has opened up a wide range of development potential, with Porsche already testing to lock/unlock cars through smart contracts. In the process of unlocking a car with a smart contract, the customer first needs to pay the deposit through a digital wallet. Through the interconnection of blockchain network and the confirmation of the store’s contract, the customer can then unlock and drive the car directly. With the help of IoT technology, store owners can track car locations during the car leases and automatically provide insurance through smart contracts.
  2. Artificial Intelligence (AI) and self-driving cars

Blockchain can help artificial intelligence in achieving more value. As AI is using milliseconds to undertake massive decisions, blockchain can assist in tracking AI’s decision-making and prevent tracking accidents.

From the above, we have learnt that blockchain has a wide range of applications in the automotive industry. As long as the applications are rolled out with appropriate timing, the automotive industry will go through a transformative developments.

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Opportunities for Automobile Companies in Capitalizing on Blockchain

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Automakers are currently investing considerably in blockchain technology. In the competitive automobile industry, companies are actively developing blockchain technologies, with ambitions to become market leaders. GM Global Technology Operations LLC proposed stored data can be shared among blockchain users, including the location and density of vehicles. The system is expected to develop route navigation, toll collection and gas station services through appropriate data management and analysis. In addition to this kind of service while driving, blockchain systems can also be used for sharing resource and legal records, so that various services in the automobile industry can receive technical support where appropriate.

When mentioning car manufacturers and blockchain, it is impossible not to mention the automobile manufacturing alliance organized by the world’s four major car dealers in 2018. Volkswagen believes that the gold alliance of the automobile industry: BMW, Ford, GM and Renault, will combine to introduce dynamic industrial innovation and push for the Internet of Things (IoTs) revolution. The use of blockchain in the car industry will also become more extensive and complex with the establishment of this alliance. Not only does the collaboration aim to promote a specific type of distributed ledger, but it also focuses on establishing a standard application programming interface in the field of payment and data transmission in automobiles. For example, after the blockchain system is bound to the vehicle, the system would record different charges, such as parking fees, car wash fees and toll charges. Bringing all the expenses together raises convenience for car owners/drivers. This technology can also be synchronized to verify the effectiveness of driving licenses, reduce workload of government departments and increase road safety.

Without doubt, blockchain plays a much bigger role beyond the conventional automobile industry, furthering its influence on the development of driverless technology, car sharing/pooling and car insurance. First of all, regarding driverless technology, which has been under public scrutiny, it is absolutely necessary to bring blockchain technology into practical use. It should connect the surrounding sensors in one piece and obtain instantaneous environmental information, so that the driverless car can operate effectively. In addition, smart contracts (enabled by blockchain) are characterized by auto-execution and high credibility, making this technology a “guarantor” between the platform and the user. As for car insurance, blockchain can save all driving records efficiently, and insurance companies can use the reliable data to set more accurate insurance premiums. Blockchain also has a crucial role in auto insurance in discovering and avoiding fraudulent behaviour as the data stored is unlikely to be changed by the owner.

Drivers maybe concerned about the safety of the technology and may fear that driving data can be stolen or illegally exploited. Yet, the underlying technology of blockchain can effectively improve the security and privacy of the system through the decentralized consensus mechanism but at the same time, provide data exchange services.

At the same time, the alliance is facing a lot of competition. As the market for driving data contains at least 1 trillion of dollars in business opportunities, the major platforms are looking for opportunities to study relevant technologies and plan different policies to capture more driving data. Of course, this alliance also has its corresponding methods, they are expected to use distributed books to control another data for sensor data. With this technology, the amount of data will increase significantly, but the prerequisite is that in the future, both automatic and general vehicles should have remote sensing capabilities and LIDAR Light up technology.

At the same time, this alliance is also facing fierce competition. Since the market for driving data contains at least 1 trillion dollars of business opportunities, the major platforms are looking for opportunities to research related technologies and plan different policies to capture more driving data. The alliance also has its own corresponding method; participating players are expected to control another type of data – sensor data in a distributed ledger. With this technology, the amount of data collected will increase significantly, but the prerequisite is that both automatic and general vehicles must have remote sensing capabilities and LIDAR optical technology in the future.

Summary:

Under the rapid development of the blockchain, the automobile industry has also been driven by its influence. The market for driving data contains at least $1 trillion in business opportunities, so many companies are scrambling to develop technology in this area. Among them, the most eye-catching must be the alliance of the world’s four major auto companies. They are looking to use blockchain technology to develop specific types of distributed ledgers, promote driverless technology, auto insurance, and other related industry developments.