Digital Solutions & Data Responsibility
3 Disruptive NFT Automotive Industry Applications
NFT automotive industry applications are coming!
Non-fungible tokens or NFTs are usually associated with the hype of crypto collectibles selling for millions of dollars. But they might revolutionize industries in unexpected ways: data storage, ownership, marketing, and royalty generation. Now NFT automotive industry applications are coming!
In fact, NFTs have already been applied to the automotive industry. Not only that but there is a real possibility for further utilization. In this article, we’ll take a look at three ways NFTs will disrupt the automotive industry.
What are NFTs?
Need a tutorial? Check out our previous article on NFT basics.
In short, NFTs are deeds for goods. They trace the ownership of a digital or physical item.
These deeds are minted by smart contracts built on a blockchain. They record the terms of an agreement and execute them automatically once they are fulfilled. For example, if I pay you for an item and you receive the money, the contract executes and the ownership changes hands. This information is stored in a digital wallet.
That’s how it works!
There are many NFT marketplaces for creating, buying, and selling. Some of the most well-known of these include Open Sea, CryptoPunks, and Raribles among others. Most NFTs are stored on the Ethereum blockchain.
Let’s look at three ways NFTs will be applied to the automotive industry.
3 NFT Automotive Industry Applications
1. The future of vehicle ownership: NFT deeds
While NFTs are currently more of a fringe concept used for buying and selling digital assets like art, the secret of the innovation is the way it is revolutionizing ownership.
Since NFTs digitally record the ownership of assets, they could replace a vehicle’s paper deed or electronic title stored on a centralized database. Since the blockchain that stores an NFT is decentralized, it is extremely secure. There is no limit to how they can be applied.
“You could tokenize almost anything if you have a legal structure that would have a formal guarantee for something that isn’t living in the digital world that can be linked to a token,” said Andreas Park, a professor and blockchain specialist at the University of Toronto.
In fact, real-estate NFTs have already been bought and sold.
Silicon Valley-based real estate innovator, Propy, sold the first known real-estate NFT in 2021 for an apartment in Kyiv, Ukraine owned by startup founder, Michael Arrington. And this year they sold another property in Tampa, Florida.
With a regulated legal framework in place, NFTs could be fast-tracked to wider implementation for ownership of cars, trucks, and real estate. This could also be applicable to shared ownership of a vehicle, especially with autonomous vehicles where a driver might not need full-time possession.
This could be especially timely as crypto car markets are bubbling up all over the world.
2. Recording Vehicle Data with NFTs
In modern vehicles, there are an increasing number of devices sending and receiving data. With the advent of the “smart car” concept, data is gathered, processed, and used from a variety of sources, which include the driver, the vehicle itself, and its surroundings.
There are two main types of vehicle data. One type is personal data associated with the driver, including GPS information, driving style, and cloud data.
Another type is non-personal data recorded by sensors including road conditions, as well as maintenance and repair information.
Italian carmaker Alfa Romeo announced earlier this year that it will implement NFTs to record and store vehicle maintenance records on a blockchain for its new SUV. This implementation would make it the first automaker to utilize NFTs in such a way.
This could “bring transparency and efficiency to a car market that often relies on third parties to track car records,” according to Coin Desk.
Alfa Romeo claims a vehicle’s NFT will generate a certificate of its maintenance data records.
In this way, NFTs can contribute to the further digitizing of the industry.
3. Brand promotion, the metaverse, and beyond
While NFTs have real-world applications for vehicles, the automotive industry is not immune to the massive interest in tokenized graphics and art.
Many manufacturers are beginning to explore the use of digital imagery NFTs for brand promotions and campaigns. Some are even going so far as to create metaverse-like platforms for elevating brand experience.
Hyundai launched what it is calling a “metamobility universe” along with a slew of NFT images released for promotional giveaways and sales.
Considered cutting-edge marketing by some, companies are increasingly utilizing NFTs as a new way to engage with customers who are spending increasingly greater amounts of time in the digital world.
For those outside of the NFT bubble, it’s all a bit head-scratching.
But the list of automotive manufacturers investing in NFTs for digital marketing is growing. This includes Bentley Motors, Lamborghini, and Chevrolet among others.
The future of NFTs in business
NFTs are currently in their infancy. They are just beginning to gain traction since the first known NFT was sold in 2014. Ethereum launched its first blockchain in 2015, generating 457 hexagonal tiles that remained unsold until 2021.
The public is beginning to get a glimpse as to what they’re all about. Popularity and utility will dictate how these digital tokens will be applied in the future.
NFTs are part of a broader trend for the next iteration of the world wild web known as Web3. This version incorporates decentralization, blockchain technology, and token-based economics.
What remains to be seen is how great swaths of industry utilize or resist it.
The automotive industry, for one, is just starting to get its feet wet. Nft automotive industry applications will bubble out more and more.
The big question Mitsubishi Fuso would like to ask is what is the most practical application of NFTs to the commercial truck and bus industry?
Drop us a comment below.