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What Blockchains Mean for Your Shop

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What Blockchains Mean for Your Business
The growingly popular technology aims to ease data exchange between collision repair parties.

Just mere months ago, it seemed like a distant reality to Jurgen Mayntz.

“There are just so many possibilities in the future,” said founder of the connected car company High Mobility. “I could imagine someone who crashes into a car, then the car automatically pays the other one because the information is on the blockchain.”

Back in September, during his interview with FenderBender, he said the idea sounded crazy, but that “this is really where the technology is leading us to.”

Flash forward to January 2018, and Mitchell introduced Blockchain Solution at a Collision Industry Conference (CIC) meeting, where vice president of sales, service and repair Jack Rozint discussed a technology that would allow insurers, OEMs, repairers and suppliers to exchange data at any moment through a secure network—aka a “blockchain.”

Blockchains, essentially, store all information gathered during a transaction. Today, 15 percent of all banking transactions are made through blockchains, and in three years Rozint says that number will rise to 65 percent.

“Blockchains will start showing up in all phases of all our lives,” he says.

Mitchell’s goal is to store all information recorded during the collision repair process and allow various parties to access it, streamlining communication and making the data more secure.

Here’s everything you need to know about the technology.

 

The Formation of Blockchains

Blockchains are inspired by a popular form of digital money better known as “Bitcoin.” Essentially, transactions made within the Bitcoin system are stored digitally without being governed by a centralized authority.

“The way that data has showed up historically is that you have a central server where all the data is housed, and everybody has a secure link to that server,” Rozint says. “And that actually worked 20 years ago, and even 10 years ago, fairly well in most industries.

“The problem is it doesn't work in today's world. We have a distributed data environment where numerous parties have to process data, and there’s no single entity that controls all the data,” because a single entity is too difficult to keep secure in today’s digital ecosystem.

As transactions are stored digitally, they form a “blockchain.” The true appeal of this system is that information added to the blockchain cannot be hacked without going through every component of the blockchain.

 

Blockchains in Your Shop

This practice means different things to different industries, but for collision repair shops, it changes the communication process with insurance companies, OEMs, suppliers, rental car companies, etc.

“The need to share data has never been greater,” Rozint says. “In order to fix today’s increasingly complex vehicles and deal with the myriad interactions necessary to process a claim and deliver a correctly repaired vehicle to a consumer, you need to integrate data with numerous entities.”

A blockchain would allow those various parties to access vehicle data without using the traditional method of transactions, which required going through a central party. For instance, an insurance company houses claims that are private to them and critical to their processes. Then, on the collision side, the shop piles up data from an estimate and its interactions with a customer.

“So blockchain allows for that distributed environment where everybody is part of the chain,” he says. “Then, each party can put data on the blockchain. And as you put data on the blockchain, you can do it in a way that you create contracts with those people you intend to share the data with, and they’re the only ones that can read the data you’ve put on the chain.”

For instance: If your shop performs a parts order, you might only want to include the business message suite (BMS) transaction and not any customer information. You can then create a rule with your parts procurement vendor, so that they can only access the data pertinent to their role in the transaction.

 

Mitchell’s Role in Blockchains

Mitchell aims to enable that freeflow of information with its Blockchain Solution, which is designed to provide a secure, distributed, advanced encrypted-data exchange between parties.

Mitchell would not be an authority over that information, but instead a hub that stores and manages the transfer of said data. Any shop that’s part of Mitchell’s Blockchain Solution would then be in control of its own data. You even have the ability to make transactions expire after a certain period of time.

Because Mitchell is such a staple in the industry and works with so many different parties (shops, insurance, OEMs, parts), Rozint says the company offers a uniquely specific system that works in favor of all stakeholders in a collision repair transaction.

“Data is the key to every business today. That’s why there’s so much focus on it,” Rozint says. “As a business person, I don’t want to turn my data over to a third party running a server somewhere. I don’t think that’s a prudent business decision in today’s world.”

 

A Blockchain Breakdown

  1. A transaction is requested.
  2. The transaction is broadcasted to a network of nodes.
  3. The network validates the transaction using algorithms.
  4. The transaction is unified with other transactions as a block of data.
  5. The new block is added to the blockchain in an unalterable way.
  6. The transaction is complete.

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