A recent report suggests that the application of blockchain technology will grow exponentially in two major industries, the automotive industry and the aerospace industry. According to the report published by the market research project Reportlinker, the blockchain market in automotive and aerospace fields is likely to reach over a whopping $20 billion by 2029.
The analysis also predicts the technology’s application in both the sectors will witness tremendous growth in 10 years time, between 2019 and 2029 at a compound annual growth rate of 60.35%.
Per the report the heavy application of blockchain in both the automotive and aerospace industries is majorly driven by factors like transparency, removal of risk and fraud, cost efficiency and the speed of transaction settlement. The report reads:
The finance, payments, and insurance services for automotive industry and manufacturing and supply chain for aerospace and aviation industry is dominating the blockchain in automotive and aerospace and aviation market and is anticipated to maintain its dominance throughout the forecast period.
The report accredits this phenomenon to the complex supply chain in the case of automotive industry. Since the automotive ecosystem is highly connected, complications arise in the supply chain which, according to the report, increases the threat of cyber issues.
In the case of aerospace industry, issues such as lack of transparency and high cost of operation arise mainly due to an increase in the demand of aircraft, courtesy the growing aviation industry. Nonetheless, the set of problems encountered by both the industries are similar. Which is why the implementation of the distributed ledger technology is mostly in the areas of manufacturing and supply chain.
Per the report, the currently dominating private blockchain segment will be holding its ground throughout the predicted period, which is majorly because of all the advantages that private blockchains offer, like high security, permissioned networks and speed, over public or even hybrid blockchains.
Furthermore, the report also projected that in terms of regional adoption, North America is likely to take the lead when it comes to blockchain application in the automotive, aerospace and aviation market. Additionally, it mentioned the regions of Europe and Asia-Pacific as key players, following North America.
The report, though highly positive for blockchain tech, did mention the issues that could stunt the adoption of blockchain in both the industries that include lack of regulatory framework, standardization, and lack of technical expertise and awareness among the industry players.
Applications of Blockchain Tech in Automotive Industry
There is a plethora of use cases that the blockchain technology can offer the automotive industry including the following:
Supply Chain Transparency
One of the key features of blockchain is transparency. In the automotive industry, the transparency offered by the technology can help thwart the injection of counterfeit parts into the supply chain by ensuring that manufacturing, shipping, and suppliers see the same supply chain
When it comes to manufacturing, there are several opportunities for blockchain implantation throughout the process. Since blockchain can hold sensitive information all the while keeping it secure, separate blockchains can be made containing specific information of each vehicle from start to finish. For example, one blockchain might contain bills of lading for vehicle components, another blockchain could contain quality-inspection records.
Efficient Data Storage
Due to its decentralized nature, it lessens the burden of maintaining a database from any single party. There is no need for expensive backup servers and remote storage. The data exists on multiple “nodes” and cannot be damaged, accidentally erased, or corrupted.
All this is more than mere speculation as there are automotive companies that are experimenting with blockchain. In fact, the French multinational automobile manufacturer, Renualt is leveraging the blockchain technology. Back in the July of 2017, the company announced a prototype for a digital car maintenance book by using blockchain technology. The goal of the project was to enable their customers to save all vehicle information in a streamlined, tamper-proof and secure digital car maintenance book.
Applications of Blockchain Tech in Aerospace Industry
The aerospace industry can potentially benefit tins by incorporating blockchain in different parts of it ecosystem.
Supply Chain Tracking
Being decentralized, the shared database that blockchain provides would make it easier to track quality and compliance for products and components from manufacture to implementation in the industry.
Support in Procurement
Blockchain creates joint, trusted and tamper proof records of exchanges between partners, thus helping in increase the efficiency and transparency, all the while greatly reducing costs and improving the overall procurement process.
The aerospace industry consists of many moving parts, all working in sync for the industry to function properly. However, with many moving parts, cooperation becomes highly necessary. Blockchain provides secure, verified data that can be viewed by multiple parties and is extremely difficult to change or corrupt.
There are several aviation companies that are implementing blockchain technology in their ecosystem. Lufthansa Industry Solutions has started the Blockchain for Aviation (BC4A) initiative in order to bring together software developers, manufacturers, MRO service providers, logistics providers and regulators. In addition to Lufthansa, Airbus also wants to leverage blockchain technology specifically in supply chain tracking and purchasing, per its website.
All the evidence so far seemingly proves Reportlinker’s projection about the excessive use of blockchain in both the industries to be true. However, we will have to wait 10 years in order to see to what extent the report is accurate.