We’re trying to make California’s DMV more efficient with Blockchain

Does anyone really enjoy dealing with bureaucracy in the state motor vehicle department? California, which has the highest number of car registrations in the US, may soon use blockchain technology to verify car titles and registrations.

“The collaboration with the DMV [Department of Motor Vehicles] is almost a perfect matchup of a paper-based system that has been crying out for more efficiency,” Andrew Smith, president of crypto infrastructure company Oxhead Alpha, told CoinDesk TV’s “First Mover” on Thursday.

Focusing on advancing protocols, research and development, Oxhead Alpha approaches Tezo’s blockchain to make a “very clear case of better, faster [and] cheaper” to the state, he added.

That was part of the reason the firm chose Tezos, Smith said. It boiled down to three areas: a responsible consensus algorithm, on-chain governance that can reduce forking problems, and an overall robust security model. Tezos currently ranks 40th by market capitalization, according to CoinMarketCap data.

Via Tezo’s blockchain, paper car titles will be reflected as digital assets on the chain, Smith said.

“The digital model that we’ve put together on the blockchain approaches that where you need an attestation from both parties,” Smith said. He said vehicle odometers are one of the ways to verify a driver’s information.

A proof-of-concept test network conducted last week shows how the collaboration with the state agency can be successful, according to Smith. “The administration out there is actually very forward thinking and we should have systems in production this first quarter,” he said. Production, he explained, means “a shadow book, which will be our first step on the road to full distribution.” The ledger will essentially mirror California’s current driver database.

But don’t get your hopes up—moving the information up the chain won’t eliminate the DMV’s role.

“The DMV is not removed from the transaction process,” Smith said. “Even if the end users are able to initiate transfers, the DMV still has oversight because the implementation is very similar to an escrow contract.”

He said certain things still need to be done with a vehicle title “to effect a real transfer,” but with the blockchain-based protocol, it can be done “digitally and asynchronously.”

State lawmakers, he said, aren’t sure what to make of the blockchain plan.

“I think they see very clearly this split between speculation and application. And when you get into the application and you can explain the benefits, they see,” he said. “They see the huge costs of the infrastructure and aging [DMV] infrastructure and maintenance that they have, and they’re looking for ways to bring that into the future.”

In May, Governor Gavin Newsom signed an executive order promoting blockchain technology. In September, however, he vetoed crypto license legislation that would have created a California version of New York’s BitLicense.