From developing the assembly line to creating eco-friendly cars to the emergence of electric vehicles (EVs), the automotive industry continues to be at the forefront of new technology.
Yet, the demand for an expansion from a supply chain based industry to a software-based one is challenging. In the previous blog post, we spoke about the importance of trustful data provenance for the future of connected cars.
Similarly, today's blog post focuses on why the automotive industry must take advantage of the impending arrival of Web 3.0 to secure the infrastructure needed to process critical mobility data. The industry must give way to Web 3.0, or they risk being left behind.
What is Web 3.0?
Web 3.0, as the name suggests, is the third evolution, or generation, of the internet. The first version of the internet, or Web 1.0, refers to the early years of the internet since its inception in 1989. Initially, the internet was simply a way to gather information. Web 1.0 is also called the "Internet of Information." Most websites were read-only, and users could not interact with them much.
Web 2.0, or the "Social Media Era," began in the early 2000s, gaining momentum significantly after the creation of Facebook. The goal of Web 1.0 and Web 2.0 was similar: to freely move information from one place to another. However, Web 2.0 took it a step further by allowing users to access information, directly communicate with one another and, in turn, provide data about themselves.
Both generations of the internet have heavily focused on providing information in the quickest way possible, usually through a centralised system. The idea of a decentralised internet has recently started to evolve.
Web 3.0 is the latest internet technology that leverages machine learning, artificial intelligence, and blockchain to achieve real-world human communication. The aim of Web 3.0 is to allow individuals to own their data and be compensated for their time spent on the web.
Why Shifting to Web 3.0 is Necessary
The need to shift to Web 3.0 is both existential and necessary. As internet companies expand, we have seen an increase in dependence on mobile applications, which have made their way into vehicles.
Tesla, for example, has an intuitive user interface that provides access to information about the car itself, from its EV battery management system to its external surroundings and more. BMW's user interface (UI) screen has access to similar information and a fully integrated navigation system as well. This is also the case for Mercedes-Benz, Ford and many other car manufacturers.
However, the common theme between these companies is that they use entirely different interfaces to show the same products with some variations.
As we approach the era of Web 3.0, these subtle differences can mean a lot. Today's consumers tend to be less brand loyal. Instead, they care more about convenience. They flock toward services and products that are easy to use and widely available. The industry must adopt a standard infrastructure that easily integrates Web 3.0 and its benefits.
The Arrival of Web 3.0
In recent years, we have seen steps taken by governments and corporations that have helped pave the way for a decentralised, transparent internet. There has been an increase in the acceptance of cryptocurrency. The United States, Canada, Australia and many others have done this. Companies such as PayPal and Microsoft accept cryptocurrencies for payments too.
The emergence of NFTs as digital assets has paved the way for digitising many real-world objects. While their potential may still warrant debate, NFTs have created the framework necessary for a digital space where transactions can be made safely without any centralised authority.
It took ten years for Web 2.0 to be adopted by the masses. While with Web 3.0, the rate is expected to be even faster due to the sheer number of corporations that have expressed an interest in adopting this new technology.
How the Automotive Industry Can Benefit from Web 3.0
Any new disruptive technology is often initially met with scepticism and reluctance. However, the automotive industry shouldn't resist Web 3.0 and what it brings: the opportunity to establish an ecosystem where trust and transparency are guaranteed.
If the automotive industry does not embrace Web 3.0 soon, it risks losing shares to big tech companies such as Google and Apple, which are developing their own autonomous vehicles. The need to accept Web 3.0 is existential. It is up to the industry to decide whether it wants to maintain its prominence by adapting earlier or lose it by doing so later.
The automotive industry has made various attempts to welcome Web 3.0. Initiatives such as Gaia-X and Catena-X show an interest in developing a standard data-sharing infrastructure.
However, there is still a lot that has to be done.
By understanding Web 3.0 as it is currently, automotive companies can benefit from leading the transition and have a chance to shape it. The automotive industry can take advantage of smart contracts to create a more efficient method of keeping track of car ownership as it is passed from one owner to another. It can enable supply chain transparency, provide CO2 mobility certificates, perform predictive maintenance via EV battery management and also provide critical mobility data for further insights.
Allowing customers a platform where they can pay without hurdles is an excellent idea for the automotive industry. Today cash flows are necessary for businesses. Having a payment system that consumes no time in delays is needed. There are also plenty of mobility data monetisation opportunities awaiting. The global market size for Web 3.0 is expected to reach $81.5 billion by 2030. The automotive industry should start taking advantage of this as soon as possible.
Tokenization and Its Role
As we move towards a more decentralised economy, the importance of tokenization is expected to grow. Tokenization divides the ownership of an asset into digital tokens. These tokens are fungible, and the value is tied to the asset. Thus, transforming the way we invest in physical assets.
It can diminish the obstructions around elective and actual resources, bringing even more opportunities to the table. For the automotive industry, tokenization is an essential aspect of Web 3.0. From ownership history to critical mobility data, much can be achieved from tokenization.
In the next blog post, we will look at tokenization in more detail and explain how it is the answer to some key issues faced by the industry today.