The automotive industry has to open its doors to cryptocurrency to improve customer engagement, financial transactions, and supply chain management. So vast is the potential of crypto, that car insurance, sustainable driving, and vehicle security have started adopting it. This may just be what crypto enthusiasts have been waiting for; they can keep up with the Bitcoin price daily update to determine when to purchase their cars with digital assets. But first things first! We must understand and explore some of the many areas where crypto is making its mark in the automotive industry. 

Exploring the Growing Trend of Crypto and Car Purchase

Gone are the days when people could only buy their dream car with fiat currency (money); today, you’ll find that so many car dealers now welcome digital currencies as payment. The popular electric car manufacturer, Tesla, opened its doors to crypto payments in 2021, but Elon Musk wasn’t the first to see the potential. Christopher Basha, a Georgia Kia dealer, was eager to sell his cars for Bitcoins prior in 2015, after discovering from his roommate that someone bought a pizza with Bitcoin. 

While people weren’t crazy about this innovation back then, the story is different today. Luxury dealerships receive crypto as payments for Ferraris, Lamborghinis, and the like. In addition to these, crypto-based automotive dealers like BitCars are gradually becoming mainstream. But why the growing interest in crypto transactions? You can thank crypto with low transaction fees and seller discounts for it. Plus, buyers can escape cumbersome bank processes and buy any car from any country without outrageous exchange rates. Aside from Bitcoin, some dealers are okay with Ethereum, Dogecoin, and Shiba Inu as their preferred digital currencies for receiving payments for their cars. 

But we must not accept the benefits without checking out the risks involved. Crypto’s value can change in the blink of an eye, which means buyers and sellers can lose if the change is unfavourable. Dealing with high volatility while being scared of the lack of buyer protection and cyber attacks can put people off. Looking at the benefits and risks, it’s safe to say that Crypto as a payment option will be around for a long time, although there is a need for improvement. 

How Blockchain Technology Helps Automotive Supply Chains

Very large and complex, the automotive industry regularly deals with a vast, global network of suppliers of parts and components when manufacturing vehicles. It’s therefore not surprising that tracking these parts can be challenging, as one vehicle contains so many. Manufacturers also have to contend with counterfeit items and waste of time and resources. But Blockchain can be the solution the automotive industry needs. For starters, manufacturers would be able to trace each component back to its source and test its authenticity with a unique identifier assigned to it and recorded on the Blockchain. 

Aside from this, transparency and trust can be as easy as putting smart contracts in place. This is because these Blockchain contracts are such that no detail can be messed with. Plus, this technology can prompt car owners about their maintenance services using real-time data. With these in mind, should it be surprising that the automotive supply chain is interested in this technological innovation?

However, using Blockchain in automotive supply chain processes has some kinks that should be straightened out. For starters, there’s no escaping the disruptions when many processes and legacy systems have to be modified or replaced for it to be used in every area. And there’s no guarantee that it will deliver total data privacy for customers. Although Blockchain technology is a big deal in the automotive supply chain, it’s still not perfect and needs to be worked on.

Beyond Buying Cars: the Relationship Between Cryptocurrency and Auto Insurance Industry

On the other hand, the auto insurance industry is about to get an upgrade, thanks to cryptocurrency. For starters, companies can drop the conventional contracts for smart contracts, allowing every data and term to be stored on Blockchain networks. These smart contracts can immediately reject a claim if the terms aren’t met, and accept a claim if it is legitimate. 

But it gets better! Insurance brokers are beginning to accept crypto payments, as they don’t need to pass through third-party verifications. Moreover, customers can rest assured that their financial data isn’t stored on a centralised platform where criminals can get and manipulate them. Insurers aren’t left out, as Blockchain makes sure that duplicate transactions are stopped. That said, insurance fraud will be more difficult, almost impossible even, to try when transactions are made with crypto. 

In Conclusion 

Cryptocurrency may be more than a trend in the automotive industry, making itself known in supply chain processes, automobile purchases, sustainable driving, insurance, and the like. It may not be perfect, but the benefits shine brighter. But that’s not to say that the challenges should be ignored. The good news is that crypto keeps evolving, and with time, these issues will be addressed, and its adoption will be more seamless. 

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