Montana DMV Update: 9 April 2020 - Plus, Vehicles on the Blockchain

Bringing vehicles onto the blockchain creates exciting new possibilities.

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February 3, 2021

The ongoing Covid-19 epidemic has forced Departments of Motor Vehicles (DMV’s) around the country to suddenly change many of their processes - Montana is no exception.  This shakeup has created an opportunity to re-think those processes with 21st century solutions.

On March 20, 2020, the Gallatin County Motor Vehicle Department (our local DMV) closed its doors to the public to protect its employees (and everyone waiting in the lobby) from exposure to Covid-19.  At last check, all Montana DMV’s are closed to the public.

However, Montana registrations are still being processed.  Gallatin County created a contactless registration process that went into effect on March 30, 2020.  Applicants seal their paperwork in an envelope and drop it in a lockbox set up in front of the office.

I processed two registrations this week, and I’m grateful for the ability to continue to doing business contact-free.

However, the experience made me hope that DMV’s around the country (and around the world) are re-thinking more than the drop-off / pick-up process.

21st Century Solutions to Old Problems

Here’s an old problem: car buyers have an informational disadvantage.  The seller usually knows way more about the car - how often the oil has been changed, whether it’s been in any unreported accidents, whether the engine has ever overheated, etc.

You’d love to buy a car with a complete service history, but paper booklets are easy to lose and easy to fake.

Another old problem is the time lag between the vehicle sale and the new owner’s receipt of registration, plates, and title, which can take several days or weeks, depending on the state.

Vehicle records, from oil changes to ownership changes, can all be handled elegantly using blockchain technology.

Bitcoin is the most famous blockchain application, but blockchain can be useful for more than financial transactions.

Vehicles on the Blockchain

Think of blockchain as a database that lives in the cloud, is accessible to anyone, and (most importantly) is made up of entries that are absolutely unalterable after have been made.  That database can hold records of everything that happened to a vehicle: what options were installed on the assembly line, its complete service history, whether an airbag has ever deployed, etc.

A vehicle’s owner would hold a key to de-encrypt a vehicle’s records that he could share with prospective buyers, who could then inspect the records for themselves.  (I don’t know about you, but I would probably pay more for a vehicle with complete information, so I can imagine owners being incentivized to adopt such a system.)

Ownership transfers, currently recorded on bits of paper that take time to handle, could be processed in a fraction of the time.  This would make life way easier for lenders, law enforcement, and others.

The video below helped me imagine the possibilities that open up when you bring vehicle records onto the blockchain.

The idea of putting vehicle records on the blockchain is not new (IBM published this video in 2018).  Regulators (i.e., the DMV’s) are a key stakeholder - their buy-in would be essential for any move in this direction.  Absent a crisis, regulators tend to perpetuate the status quo.  American DMV’s haven’t had any reason to revisit processes en masse, until now.

So as the Montana DMV and DMV’s around the US revisit their processes, I urge them to consider what’s possible with vehicles on the blockchain.

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