e-Governance and Blockchain-based Data Supply Chain for Used Cars

Since the used car market is a representative lemon market due to information asymmetry and moral hazard, the traceability and transparency of information during the life cycle of a used car are necessary for a healthy market environment. This chapter examines whether the blockchain can enable the expansion of the used car business from B2B to B2C and analyzes the possibility through field validation for OEM (Original Equipment Manufacturer). In order to assure the transparency of used car transactions, this study configured a two-level contract to track not only the changes of ownership of each vehicle but also changes of the vehicle components and the driving histories. Layered blockchain architecture and consortium blockchain platform is proposed considering efficiency of service operation management. The contributions of this chapter are proposition of the specific blockchain application in the existing used car market. Based on the findings, we discussed the benefits of applying blockchain to the used car market, including securing traceability and transparency, preventing fraudulent sales, evaluation of dealer’s credibility, and service operation management. We also discussed the barriers and provided strategies to overcome those barriers.