At first glance, cars and cryptocurrencies might not have much in common. But carmaker Ford Motor Company (F) might beg to differ.
The Detroit-based car maker has filed a patent with USPTO for a “cooperative vehicle” platoon with a vehicle-to-vehicle communication module that uses cryptocurrencies. The patent claims to ease congestion by synchronizing the speeds of individual vehicles in a traffic roadblock. The vehicles, which are equipped with vehicle-to-vehicle communication systems, organize traffic into a platoon formation upon encountering a roadblock or congestion. They do this by positioning themselves at standard locations and traveling at constant speeds.
Their movement also helps adjust speeds of surrounding traffic. “Human drivers normally prefer to maximize individual travel time. However, when a traffic cataract is encountered, to benefit all the drivers on the road, priority switches from individual travel time preferences to group flow rate though the traffic cataract (a reference to the ensuing traffic congestion from blocked lanes),” write the authors of the patent. (For more, see also: Which Industries Will Blockchain Disrupt Next?.)
Cryptocurrency tokens are used in the Cooperatively Managed Merge and Pass (CMMP) system outlined in the patent. Vehicles that are in a hurry can request to pass other vehicles by paying them. “The CMMP tokens are used to validate and authorize a transaction in which, at a consumer vehicle request, the merchant vehicles either occupy slower lanes of traffic themselves, or allow the consumer vehicle to merge into their own lane and pass as necessary,” the patent’s authors write. They illustrate this scenario with the example of a driver paying 60 CMMP tokens for a duration of 10 minutes at a rate of 10-second preferential access per token. (For more, see also: How Ford Makes Money.)
Other Uses for Cryptocurrencies in Automobiles
While Ford’s use case for cryptocurrencies is innovative, it is not the only one. Other carmakers have also hopped onto the blockchain bandwagon. For example, Toyota Motors Corporation (TMC) announced last year that it was planning to use blockchain to collect and analyze data related to driverless cars. Research and consulting firm Ernst & Young (E&Y) announced a blockchain-based platform for ridesharing called Tesseract last year. The platform uses smart contracts to facilitate shared ownership of vehicles for a community through tokens or by using existing cryptocurrencies. According to Paul Brody, Global Innovation Leader at the firm, blockchain would enable true “peer-to-peer interaction between owners with minimal infrastructure requirements” in the automotive industry. (For more, see also: Blockchain Is a Game Changer for Advertising.)
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.01 bitcoin.