Blockchain and NFTs-Based Trades of Second-Hand Vehicles

Abstract

Recently, the automotive industry has been characterized by disruptive innovations, like self-driving cars or hybrid/electric engines. Despite this fact, some operations, such as the trade of second-hand vehicles, still continue to be carried out in the “traditional” way, in which the buyer has to trust the seller about the state of the vehicle. Several studies highlighted that odometer fraud alone could cost around 8.9 billion euros per year. In order to overcome these limitations, which are related to information asymmetries between buyers and sellers, in this work we propose to exploit blockchain technology to store a previous vehicle’s history in a transparent way. To further explore blockchain advantages, we also present how a decentralized second-hand vehicle market– enabling also automatic transfers of ownership upon monetary transfers– can be built, leveraging on Non-Fungible Tokens (NFTs). We propose an architecture and a practical implementation of a Decentralized Application (Dapp) and discuss the security of the proposed system, its costs, and future developments.