Why you should care about Blockchain
Blockchain technology grew up as a support system for cryptocurrencies. It’s now poised to change the face of fleet management - including ‘smart contracts’ and FMaaS (Fleet-Management-as-a-Service) where everything is done automatically, without human involvement.
Conceptualised in 2008 by Satoshi Nakamoto, blockchain is a decentralised, highly secure, distributed database, updated in real-time and easy to monitor.
Blockchains are ledgers open to anyone involved in a transaction, in which blocks hold batches of encoded, validated transactions.
The advantages of blockchain
Business transactions take place every day — orders, payments, account tracking and much more. Ordinary contracts are vulnerable to fraud and human error. Each participant has their own separate ledger, which means one record may differ from another. They rely on intermediaries for validation which is highly inefficient and time consuming.
Members on a blockchain share a common view of the truth. It’s possible to see all details of a transaction end-to-end. Blockchains also minimise complexity by creating a single, shared, tamper-evident ledger that, once recorded, cannot be altered.
Managing contracts and vehicle assets - from procurement to remarketing and beyond - can be paper-intensive, time consuming and prone to human error, fraud or mis-management. Many of the processes involved in managing a fleet can be automated and incorporated into a blockchain. This means inspection and maintenance information could travel with the vehicle throughout its lifecycle and be accessible to stakeholders.
Smart Contracts
Blockchain-based smart contracts can be partially or fully executed or enforced without human interaction. One of the main objectives of a smart contract is automated escrow. Some blockchain implementations could enable the coding of contracts that will execute when specified conditions are met.
The disadvantages of blockchain
Blockchain networks have had bad press in terms of energy consumption. Digiconomist estimates the whole of the Bitcoin network will use 42TWh of electricity in 2018, placing it ahead of New Zealand and Hungary. The CO2 emissions from this will be equivalent to 1 million transatlantic flights.
Must fleet operators looking to invest in blockchain networks kiss goodbye to green aspirations?
Not necessarily. Cryptocurrencies rely on the process of data mining (performing billions of calculations per second to win the deal). Managing a finite number of transactions and assets, such as with smart contracts and FMaaS, will not require intensive data mining. Plus, Ethereum (the operating system behind blockchain) is developing a solution that could potentially use 90% less energy.
Blockchain has the potential to change the face of fleet management but only time will tell if it can do so before the next big thing usurps it. We’re publishing more articles on Blockchain over the next few weeks.
