The high-profile digital currency bitcoin may seem far removed from a dealership's body shop. But the technology that makes bitcoin and other cryptocurrencies possible is poised to become an everyday part of collision repair.
That technology is called blockchain. Mitchell International, a collision industry software provider in San Diego, is developing a blockchain-based network for securely sharing the data of body shops, insurers and repair customers. Mitchell says the system is the first application of blockchain in automotive repair.
"We've been trying to drag everybody to blockchain for two years," says Scott Biggs, CEO of Assured Performance Network in Laguna Hills, Calif. Assured administers the certification of more than 3,000 collision repair centers for a variety of automaker repair networks, including those of Fiat Chrysler Automobiles, Ford and Hyundai.
Body shops compile customer names and addresses, account records and insurance reporting data, all shared with many parties during a claim. Such information is often the target of identity thieves. Consequences of a data breach at a shop can range from settling with customers whose information has been stolen to losing its Direct Repair Program status.
Blockchain, Biggs says, "provides data accessibility" while making it hard to hack.
"Think about replacing a windshield after an accident," Biggs told Fixed Ops Journal. "Somebody repaired it, but using what technique? Was the windshield new, used or aftermarket? What tools did they use?"
Such information tends to be stored in the records of a single body shop, dealership or insurer, but is unavailable to other repairers. Blockchain could log all of that information, Biggs says, helping with recall and repair compliance.
- Copies of the ledger are stored on every computer that has used it -- the "distributed" network.
- A new, encrypted block is written every time a transaction occurs between two of these computers. The transaction requires both ledgers to match.
- Each new block continues the encryptions — a series of random letters and numbers identifying an individual block — of all previous blocks, maintaining the chain. Breaking the encryption is virtually impossible.
- The technology not only can verify transactions for digital currencies such as bitcoin, but also can transmit and store sensitive information.
- Because ledger copies are constantly compared, none of the records can be forged or changed.
- Because the ledgers are stored on many computers, they are not held by a single server or company that could be hacked.
"Any time you can find out information about a prior repair, it's going to be beneficial," says Randy Sattler, body shop manager at Rydell Cars, which operates Chevrolet-Buick-GMC- Cadillac and Honda-Nissan dealerships in Grand Forks, N.D.
A permanent electronic "receipt" of logged repairs, Sattler says, would reduce a shop's potential liability by allowing insurers and shops to identify previous substandard repairs.
Mitchell International's blockchain initiative seeks to help body shops transact information more securely than under current file standards created by the Collision Industry Electronic Commerce Association, an industry trade group.
‘Trusted partners'
Those standards, says Olivier Baudoux, Mitchell's vice president for global product strategy, "have been left nonencrypted." As a result, he says, body shop data have "been left at the discretion of individuals who have access to the files, to do whatever they want with it."
Blockchain, Baudoux says, "is a strong departure from one gatekeeper controlling the data and potentially charging for it." Its encryption, he says, makes attacks on individual computers more difficult. The Collision Industry Electronic Commerce Association did not respond to requests for comment.
In 2011, a ransomware attack on a computer at Rydell Cars' body shop eliminated months of data from its Mitchell-sourced estimating system. "It was 11 miserable weeks of trying to piece everything back together," Sattler says, requiring the company to rethink its information technology standards.
Data stored on a blockchain are backed up by copies on thousands of computers. At the same time, Mitchell's system allows users to filter out items they don't need for specific transactions — for example, parts orders don't require the name of a repair customer.
Data can be made to expire from the system forever after a set period. And only "trusted partners" can see the data, Mitchell says.
Dealerships and body shops are often wary of sharing data because they have little control over what other parties do with it, says Kye Yeung, chairman of the Society of Collision Repair Specialists and owner of an independent repair shop in Costa Mesa, Calif.
Some automakers and suppliers require body shops to share a broad range of information, Yeung says. They harvest data from collision repair estimates and orders, he adds.
The automaker Tesla collects "everything from how much margin you made on the parts to how long it took to place the order," he says. "We don't know what they do with it, but whatever information they get from us is being utilized somewhere."
Mitchell's blockchain initiative, he says, "gives shops a reason why they shouldn't worry about sharing information."
Unlike bitcoin's blockchain, which is public, Mitchell's network is based on a "permission" blockchain. It will technically be "owned" by everyone connected to it, with no central gatekeeper.
"You can think of it as trusting a council of members," Baudoux says. "The members are known entities and they can decide who has access. Mitchell does not take full control."
This permission-based approach helps foster a secure, distributed network that can be integrated with existing files and work flows, Baudoux says.
Rydell Cars repairs an average of 650 vehicles a month, Sattler says. He worries that if the system proves popular, it may run slowly when thousands of users encrypt and transfer memory-intense files such as estimates with dozens of photos. Adding several minutes to the time needed to process each estimate would quickly add up, he says.
Such delays have afflicted networks for cryptocurrencies such as bitcoin, but Mitchell says its permission blockchain doesn't require the kind of computing power, or time, needed for transaction verifications on a public chain such as bitcoin's.
Mitchell will make the blockchain application part of the company's existing systems, beginning with its estimating software. Current Mitchell clients will get first crack at the service this fall, with an application for nonclient users to follow. For now, Mitchell says it does not plan to charge a premium for the blockchain technology.
No free lunch
Sattler, whose company is a Mitchell customer, is skeptical about that offer.
"They have a great product, but I'd like to hear their 24- to 36-month plan for people who aren't Mitchell clients," he says. "Technology is not free."
Still, blockchain seems likely to become an inevitable component of vehicle repair, both collision and mechanical. Autonomous vehicles will require a higher standard of maintenance and repair accountability, Biggs says. Automakers are developing blockchains to track factory scrappage, he adds.
"The chain itself is almost the public utility of the vehicle of the future," Biggs says.