The market of used cars today is civilized and technological. However, the issue of trust between the participants of a bargain has existed at all times. The seller has incentives to hide anything that might hint at the car being in poor condition from the buyer, which would allow him to sell the car at a higher price. This problem was even analyzed by George Akerlof, a Nobel Laureate in Economics. He wrote a well-known article in 1970 about the market of lemons (cars with defects discovered only after purchase).

Using bank and IoT technologies, BANKEX offers a solution to this problem.

How does the technology work?

In Tokyo, an owner of a car / Client / decides to buy a new car and sell the old one urgently. He refers to the company X / product_owner /, which specializes in car digitization / product / using IoT-sensors.

The car is delivered to the / product_owner /, where the body is scanned to identify what condition the car is in. Next, they attach an IoT-device, which scans the engine as well as checks the history of mileage and the list of car owners. Finally, as a bonus, the IoT-air sensor determines if the previous owner / iot_crawler / used to smoke in the car.

After all the signals from the IoT-sensors have been processed, the data goes through the smartcontract_1. Then the cost of a particular car is determined according to the formula unique to cars / formula_1 /.

Next step: the car is checked by different institutions (insurance companies, police) / Escrow /.

The end result is a CarToken / asset_bankex / in the blockchain system / ethereum /.

Smartcontract_2, accepts the cost of the car and forms a bid / order_bid /.

Next, the car, now outfitted with an IoT location sensor, is placed in a parking lot. Hence, smartcontract_3 / formula_2 / is formed. Now, since the car is in a certain location, smartcontract_4 is formed, which contains the bidding rules, i.e. data on state regulations, on delivery and legal aspects / formula_4 /.

And we can have many such parameters. Some of them will be the same, and some parameters, of course, will differ depending on the country and local characteristics.

Why won’t there be any problems at the car dealer in Mexico?

Congratulations, now the client’s car has a smartcontract_final / hard_commitment / and it has become globally liquid, but how to minimize the risks encountered by the buyer from Mexico?

The / bid / commitment goes in the blockchain-gateway (it is structurally similar to the TCP / IP gateways) and then goes in the blockchain-network / ethereum /, where the contract / proof_of_asset_bankex / is confirmed / and then it meets the request of the / ask / dealer from Mexico, where the exact same IoT-garage for cars is installed.

This dealer from the suburb of Mexico City is guaranteed, that the car he’s interested in and which is located in Tokyo, is in the state described by the CarToken / order_bid / with a fair estimate / smartcontract_2 /, with the right availability / smartcontract_3 /, with transparent delivery conditions / smartcontract_4 /. Therefore, if the security guard in Tokyo tears off the location sensor, then the smartcontract_3 fixing this parameter will be canceled, if the car goes for a test drive, smartcontract_2 will be canceled to adjust its technical condition and the CarToken will switch to “not relevant” mode and if the government changes export conditions, then smartcontract_4 is cancelled.

This amount of information in the form of conditions that must be met, when certain events occur, is the code of the smart contract, and the history of transactions is stored in a public and unchangeable blockchain.