NFTs on Wheels - Alfa Romeo Launches the First Car With NFT technology

There’s a surprising connection between cars and NFTs. NFTs of cars have been around for a while, but the first real-life vehicle with in-built NFT technology is just rolling into the showrooms. On June 4, 2022, Alfea Romeo will give Alfisti (fans of the Alfa Romeo car brand) and crypto enthusiasts alike something to celebrate. The new Alfa Romeo model “Tonale”, a sleek SUV from Turin, the first car with an NFT feature aboard, will be launched in Europe.

Alfa Romeo CEO Jean Philippe Imparato has promised not only a transformation but a revolution (“la metamorfosi!”). He wants to offer Tonale buyers “a brand experience that extends seamlessly from the digital to the physical world and back.”  To do this, the engineers of the traditional Italian brand dug deep into their digital bag of tricks and turned to cloud computing, artificial intelligence and machine learning.

The big marketing claims raise a few questions: does the buyer of an Alfa Romeo Tonale get a digital copy of their car to cruise through the Metaverse? Does he automatically become a member of an exclusive Alfisti club? Or is he only allowed to wear a cap with the Alfa Romeo logo on his avatar? We wanted to know for sure and asked Alfa Romeo’s top product manager, Daniel Tiago Guzzafame, what the Tonale’s NFT was all about.

“The buyer of an Alfa Romeo Tonale receives a tamper-proof, blockchain-based certification of the status of their vehicle,” Daniel explains. Among other things, the VIN (Vehicle Identification Number), vehicle version, mileage, driving modes and cycles as well as the battery status in hybrid versions are stored on the blockchain. 

“The Tonale-NFT is a token that can be used to reliably read whether the vehicle is still in the same configuration as it was right after production – i.e. in its original condition,” says Daniel.

So no club membership, and no digital vehicle for you to race around in the metaverse. However, the tonal NFT does offer genuine added value in real life, especially when the vehicle is resold. On the blockchain, the current mileage and the car’s services and repairs history are documented in a forgery-proof way. This creates trust among prospective buyers and undoubtedly increases the value of the vehicle.

The great used car scam

In every third car on the used car market, the speedometer has been manipulated and shows a mileage reduced by tens of thousands of kilometers – according to German automobile club ADAC as part of a study published in November 2021. The fraudsters increase the value of each car by an average of €3,000. The estimated damage adds up to around €6 billion each year in Germany alone.

Using three current vehicles, the ADAC technicians demonstrated that falsifying the mileage is child’s play, even with current models. They connected a handy diagnostic device to the OBD (On Board Diagnose) connector of a 2019 Ford Kuga, a 2020 Opel Grandland X and a 2019 Peugeot 208. Such devices are offered legally on the Internet for around 150 euros. They called up the correct menu on the screen and typed in the desired value with the input keys – done. After just a few minutes, the fake odometer reading appeared on the vehicle’s display. In criminal practice, this is often reduced by a factor of 100,000 below the actual value.

If you want to buy a used Alfa Romeo Tonale, you can’t be ripped off, at least in this way. “If someone were to change the Tonale’s odometer reading, the NFT would still display the image with the correct odometer reading,” explains the Alfa Romeo Product Manager. Other illegal manipulations such as chip tuning or the removal of an exhaust filter to increase performance can also be read from the data stored on the blockchain. “We expect the used car certification market to move towards NFT/Blockchain,” Guzzafame said.

When creating the vehicle-specific tokens, the car manufacturer, which belongs to the Dutch Stellantis Group, relies on the Polygon network, which is based on the Ethereum platform. Polygon describes itself as “Ethereum’s Internet of Blockchains” and uses Layer 2 technology, in which a second level and sidechains relieve the underlying Ethereum blockchain.

By combining the Plasma Framework scaling solution and a proof-of-stake architecture, decentralized apps and the associated smart contracts run on a second level (“Layer 2”) provided by the Polygon architecture. This allows Polygon to process over 65,000 transactions per second on a single sidechain, instead of the roughly 15 transactions per second that Ethereum manages, while confirming new blocks in less than two seconds.

NFTs in the crash test

Anyone who would rather indulge their passion for cars in the virtual than in the real world already has several options for acquiring their dream car as an NFT. Three current examples show that this not only offers the chance of increasing collector value, but also the risk of a total loss.

Earlier this year, Mercedes-Benz commissioned international crypto art collective ART2PEOPLE to create a series of NFTs for its G-Class, the iconic SUV it has been building for 43 years. The artists Roger Kilimanjaro, Charlotte Taylor & Anthony Authié, Antoni Tudisco, Klarens Malluta and Baugasm participated in the project, aptly named “NF-G”.

“Owning a Mercedes-Benz G-Class is something very special,” says Can Florian Ahegger, the German-born founder of ART2PEOPLE. “To own exclusive art that is really unique and that you can keep in your digital wallet, is also something very special – and the symbiosis of both takes the whole thing to a new level.” On January 23, the limited editions of the five NF-Gs were auctioned on the Nifty Gateway platform at prices between 222 and 1554 dollars . They were sold out in less than an hour.

Barrett-Jackson, the Arizona-based auction house for classic cars and rare horsepower cars, is now also auctioning NFTs of its automotive collectibles on the online marketplace motoclub.io. On the occasion of its 50th anniversary, Barrett-Jackson is offering a total of 18 so-called SparkNFTs on motoclub.io, which are reminiscent of the tin automobiles that came under the auction hammer in real life.

The first series of the “50th Anniversary Collection”, consisting of six dream cars, includes a 1967 Shelby Cobra, a McLaren Senna and a 2019 Ford GT Heritage Edition, a 2015 Porsche 918 Spyder, a 1955 Mercedes-Benz 300SL Gullwing and a Chevrolet Corvette that will be launched in 2023. Launched as exclusive one-offs, each SparkNFT includes three high-resolution digital images and a video of the selected vehicle.

The Motoclub collectible NFTs are minted, sold and traded through the purpose-built platform, allowing buyers to collect them in their own Motoclub digital wallet. The auction of the first six SparkNFTs took place in early April 2022, with the second and third series to follow later this year.

On May 24, 2019, an anonymous bidder bought a virtual Formula 1 racing car from the racing game “F1 Delta Time” for the equivalent of 111,000 US dollars. Game developer Animoca Brands finally revealed the identity of the buyer: a digital entrepreneur operating under the pseudonym “Metakovan” had acquired the virtual racer, dubbed 1-1-1, as an NFT in the hope that the investment would one day pay off. At the time, F1 Delta Time offered its participants innovative blockchain features such as content tokenization, staking, play-to-earn, and digital ownership. “NFTs are all about stories,” Metakovan said, to justify his investment in a podcast by Blockchain Gaming World. “The value is that other people are interested in the secret behind the virtual car.”

Today, almost three years after the sensational deal, the dream has burst, the virtual racing cars crashed against the guardrail and exploded in a virtual fireball. What happened? F1 Delta Time was forced to cease operations in March this year after Animoca Brands failed to renew its Formula 1 license. Conclusion: The tokens are worthless, their owners at least one experience richer.

Revolt against the data monopolies

Back in real life, blockchain technology is being used to tackle the Herculean task of saving our blue planet from destruction. “Mobility Open Blockchain Initiative”, MOBI for short, is the name of a consortium founded in 2018, which not only includes the world’s largest vehicle manufacturers, but also crypto networks such as Ripple, Tezos, Etherum Alliance, Ocean Protocol and the IOTA Foundation. Together they want to develop the Web3 infrastructure for the decentralized mobility of tomorrow, which can be used to protect the climate and earn money at the same time.

For example, Uber currently operates a platform for mobility services that is both for planning trips as well as matchmaking, contract conclusions, ratings for drivers and passengers, and performing payment transactions and other services. In the decentralized ecosystem of the future on the other hand, the driver would hire the platform, and not the other way around. 

According to MOBI white paper would this open access allow for better data rights management and more lead to competition, which ultimately benefits both drivers and customers.

Likewise, the self-driving “robot cars” of the near future are said to use blockchain technology to get their passengers to their desired destination by the shortest route and without accidents. Sensors in the vehicles generate huge amounts of data that are shared with other vehicles and the infrastructure to be replaced. Routes can be planned, traffic jams avoided and accidents avoided and carelessness or distraction of the driver is avoided.

In the race to develop better algorithms for autonomous vehicles, the one collecting the most and best.  Currently, that includes tech giants like Google, Facebook, Amazon and Apple who are using machine learning to evaluate the enormous wealth of information that they get from the users of their applications. 

The MOBI whitepaper quotes author and futurist Michael Casey, who describes the concentration of power in a few hands as the “original sin of the internet”. No wonder, then, that car manufacturers such as Ford, BMW, Honda, Renault, Hyundai, Toyota,

General Motors and Stellantis with suppliers like Bosch, Continental, ZF and Denso, have joined forces with computer giant IBM in the MOBI consortium toto stand up to monopolists. 

They want to use blockchain technology to break up centralization and give content creators back control of their personal data and rights. So, the owner of an Alfa Romeo Tonale can decide freely whether to activate the innovative NFT or if they prefer to leave it switched off. Alfa Romeo Product Manager Daniel Tiago Guzzafame emphasizes: “There is no such thing as an automatic save. The customer must click the button “Create NFT” in the Alfa Connect app to activate the function. If this action is not carried out, no data will be registered.”