A decade ago, the thought of self-driving cars was far from reality, but with 2020 looming large, massive strides have been made in the field of autonomous vehicles. Meanwhile, in the space of a decade, Bitcoin has thrust cryptocurrencies and blockchain technology into the mainstream consciousness. The latter has become a tool that is quickly being integrated into the world of finance, governance, logistics as well as the motor industry.

Some of the world’s leading automobile companies have been exploring the applications of blockchain technology and how it can be used to improve vehicles, the systems that operate them as well as how they interact with the world around them.So how is blockchain being used to drive the development of autonomous vehicles around the globe?

Machine-to-machine communications

As recently as August 2019, Daimler carried out a test run in which trucks made machine-to-machine payments using a blockchain platform without any human interaction. Frankfurt-based bank and financial services firm Commerzbank tested payments between the trucks and electronic charging points, which were settled using the blockchain technology.

The banking firm tokenized euros, which were then used by Daimler to test and process the payments using the pilot platform. The success of the project could be a potential driver for the use of blockchain technology to facilitate settlement systems for autonomous vehicles.

While this is the latest instance of blockchain-powered autonomous vehicle interaction, there have been a number of major projects that are leveraging blockchain technology to store and use vehicle data.

Back in May 2018, the Mobility Open Blockchain Initiative (MOBI) was launched by a joint venture made up of over 30 companies, headlined by major automobile companies BMW, General Motors, Ford and Renault.

The principal work of the project was the creation of the MOBI Vehicle Identity Standard, which is looking to create a blockchain-based database for Vehicle Identity Numbers, which goes further than the current system that is used to register newly created vehicles.

By storing data on a blockchain, digital certificates for information including vehicle identity, ownership, warranties and current mileage can be securely stored in an electronic wallet. This data will be immutably stored on the blockchain and cryptographically verified. The vehicle can then communicate with various networks and pay for parking or tolls autonomously.

The data of the vehicle can only be accessed by permissioned parties. This would then allow service providers and government entities to verify credentials and track certain data in real time. This connection with the world around the vehicle will also allow for digital currency transactions to happen autonomously in a cryptographically secure network.

It is an ambitious project but it is easy to see the benefits for the industry. A shared but secure database of vehicles that can interact with the world in real time could be useful to a number of industries, from dealerships and service departments to vehicle insurance companies.

Aside from its involvement in MOBI, GM has been making its own moves to use blockchain technology. In December 2018, the company filed a patent for a blockchain-powered solution to manage data from autonomous vehicles.

The patent builds on an original filing back in 2017 and sets out in detail how the platform would work, allowing the distribution and communication of data between autonomous vehicles and services and facilities on roadways or in cities.

GM’s patent suggests that a blockchain system would be best suited for this type of information sharing. The range of data shared would be anything from navigation, charging and refueling services, validity of licenses as well as recording balances for payable services like tolls and parking.

The American vehicle manufacturer isn’t the only company looking to develop technology in this vein. Multinational IT giant IBM is well known for filing patents for future blockchain-based projects, and it has made some big moves in the field of autonomous vehicles as well.

In April 2019 the company filed a patent for a project that would allow it to manage data and interactions for self-driving vehicles using blockchain tech. This specific patent outlines technology that would allow autonomous vehicles to identify nonautonomous vehicles around it and predict their behaviour based on data from those vehicles’ driving record.

When making use of the blockchain technology, other users data remains secure, but autonomous vehicles can access the information in order to improve their navigation on the road. Only authorized parties would be able to access this data in real time, because it is cryptographically secure.

A practical example would be an autonomous vehicle driving on a highway. As it progresses, it can scan the license plates of nearby vehicles with sensors in order to access the necessary data using a blockchain-based application.

Payment solutions for autonomous vehicles

Blockchain technology and cryptocurrencies have proven their worth as disruptive payment alternatives, and this very application is one that is being actively developed for use by autonomous vehicles.

In July 2019, Daimler announced that it had partnered with a blockchain startup to develop a hardware wallet solution for vehicles. The solution is a blockchain-based platform that would allow for the use of vehicle identities to process secure transactions on a blockchain ledger.

The end goal is to provide a software solution that will power a marketplace for vehicles that goes further than just autonomously paying for tolls or parking. The platform could be used for ride-sharing and secure exchange of traffic information to alleviate congestion.

Alternative solutions

The applications of blockchain technology are seemingly endless, and creative ideas have led to some ingenious use cases. For example, in May 2019, a research project was announced involving Honda and General Motors that would look into the interoperability between electric vehicles and smart power grids. The project is working under the scope of the aforementioned MOBI consortium.

The project will explore the possibility of using electric vehicles to stabilize the supply of energy in smart grids. The parties hope to develop a platform that will see electric vehicle users earn rewards for storing power and exchanging it with the grid when needed.

An academic perspective

The examples of blockchain’s use cases in the development of autonomous vehicles and the improvement of their processes is clear to see. Alejandro Ranchal-Pedrosa, a researcher in blockchain technologies at the University of Sydney, has done significant research in the space.

Having co-authored a published use-case paper on blockchain technology for autonomous vehicles, the researcher told Cointelegraph that the applications of the technology in the automotive industry are plain to see, from payments per transport or unit of fuel, data-sharing for traffic and better transport to insurance.

Ranchal-Pedrosa believes there is one major hurdle to overcome in the use of blockchain tech in autonomous vehicles:

“It is understandable that the industry is taking its time, mainly, in my opinion, due to the scalability problem of blockchains and the latency requirement for autonomous vehicles which is why in most cases the automobile industry would leverage offchain protocols, when possible. We showed how offchain protocols and its fully trustless exchange of infinitesimally fragmentable goods give the possibility of new applications to the industry.”

It is difficult to identify the most beneficial use case of blockchain technology considering the massive potential and variety of possible uses. Various industries will tailor the technology to serve their greatest needs, but Ranchal-Pedrosa believes the most popular use case in the field of autonomous transport will be for transactional exchanges: