Crypto Tyres: How the tyre business is engaging with crypto currencies and blockchain technology

On 1 September 2022, the global cryptocurrency market was valued at a trillion dollars, but that figure actually peaked at $2.8 trillion in November 2021. And therefore, whichever way you look at it, cryptocurrency is now a huge economic entity in its own right. With roughly 38 and 18 per cent market share respectively, Bitcoin and Ethereum are the two largest out there. Digital currencies bring with them two main features that suggest they are the future: Firstly, because they work on highly encrypted blockchain networks outside the established financial system, they offer the potential for greater efficiency and securing; and secondly, the operate as decentralised entities, taking governments and state banks out of the equation and empowering businesses and individuals with the margins that were only previously available to banks.

That’s where the tyre industry comes in. Cryptocurrency technology offers the global tyre manufacturing, distribution and retail busineses the opportunity to uses its own power more effectively in order to meet its economic and sustainability goals. And that’s why we took a look at how crypto currencies are already being used in tyre industry and how they could be used in the future, examining a number of real-life crypto projects along the way.

Perhaps the most obvious way cryptocurrency can be deployed by tyre businesses is in the payment here Zenises was amongst the first tyre business to announce that it was accepting cryptocurrency and that it could be used to pay for its Cartyzen tyre-as-a-service (Taas) style subscription. Latterly Europe’s largest independent retreader, Vaculug, which like Zenises is owned by Harjeeve Kandhari. Across the Atlantic, online tyre businesses such as Crypto Tyres have adopted a similar approach. That is, they are taking payments in cryptocurrencies such as Bitcoin and Ethereum.

“Blockchain technology is not the future, but the now” – Vaculug’s IT manager, Jason Humphries

However, it is worth pointing out that Vaculug’s approach is somewhat more developed that simply taking payment in different currencies. Indeed, as well as acting as store of value, Vaculug will also sign its PPK and PPV fixed price contracts in CPK (Crypto per Kilometre) and CPV (Crypto per Vehicle) formats if customers want to fix or link their contracts to the price of Bitcoin or Ethereum.

Announcing this new currency option, Vaculug’s IT manager Jason Humphries commented that “Blockchain technology is not the future, but the now.” That may be the case, but it must also be said that there are only a limited number of companies offering such options. However, were more to offer it, there are obvious connections with B2B fleet cost-per-kilometre contracts and TaaS B2C subscriptions.

Burning end-of-life tyres to mine Bitcoin

Other innovative integrations of tyres and cryptocurrency include the burning of end-of-life tyre waste in order to generate electricity for the relatively power-intensive process of mining Bitcoin. US-based business Product Recovery Technology International reports that it has discovered a way to “demanufacture old car tyres, turning them into sources of energy, some of which is then used to mine bitcoin on-site.”

The idea is that, with up to 300 million tyres being discarded in America each year, rather than wasting final end-of-life product that cannot be otherwise recycled, when not recover value from the raw materials that have been put into the tyre.

PRTI was founded in 2013 to try to solve the global problem of waste tyres. The company came up with a patented Thermal DeManufacturing process that gets rid of waste tyres by transforming them into valuable sources of energy and steel.

PRIT CEO, Chris Hare, told Bitcoin magazine that the process uses 30-foot tall vertical cylinders to heat tyres up enough to turn the materials into a gas. PRTI collects the gas, condenses it and turns it into oil. The whole demanufacturing process takes 11 hours and results in solid fuel, oil, gas and steel. Hare explained, “The essence of PRTI is we have a solution to a problem that most don’t even know we have.” Specifically, the company reports that it is able to harness the stored energy in these “round batteries” and utilize it by creating a microgrid with 8 to 10 MW per site. And that’s where the crypto mining comes in. Following the advice of former CEO, Jason Williams, PRTI built a small datacenter to mine bitcoin using the energy produced from the waste tyres.

As of May 2022, PRTI has processed 50 million pounds of tyres, which is about two million tyres. Now, the company is focusing on investment to build out their next site in Virginia. In addition, the company is in discussions with Australia, countries in southeast Asia, the Middle East, Western Europe and the Americas. Indeed, executives report that they are “in the planning stages of developing 171 additional plants throughout the United States with international opportunities in parallel”.

And yes, you read it correctly, the plans include Europe. In 2017, PRTI and PRTI Europe founded PRTI European Assets to build and operate plants across Europe. The firm’s partners in this venture are AtlasInvest, a private energy investment group. The initial target is to build a further 10 plants (each with 9 processing chambers) by 2023. In addition to executing the business plan, PRTI European Assets will be responsible for raising additional capital in European markets.

According to the company, the first nine-chamber European project will be developed in two stages. Due diligence is said to be underway in the Rotterdam area as the nearby port is geographically well-positioned to receive waste tires from target countries. The port is also a key port for ultra-low sulphur bunker fuels, an ideal outlet for the oil produced by the PRTI Thermal Demanufacturing process. Although, with one year on the clock of its expansion goals, it is not entirely clear how close to the market PRTI Europe is.

Re-tyre token approaches ICO

In addition to utilising existing cryptocurrencies for tyre-related purposes, there are also a couple of tyre-specific crypto coins being developed specifically for the tyre sector. Probably the foremost of these is called Re-Tyre, which is known by the abbreviation RTR. According to its founders, the purpose of the RTR token is to “address the internationalization globalisation, the widespread availability, and support for commercial processes provided by the blockchain”. Specifically, it aims to build “a stable, secure, cost-efficient relationship between trading partners and gives the community the opportunity to protect the global environment.” The idea is that “If the blockchain is implemented in the supply chains, it becomes easier to establish trust.”

So far, more than 3.3 million RTR tokens have been bought part of the first phase of the token’s development (seed sale). The next stage is the pre-sale before the officially ICO, the cryptocurrency equivalent of an initial public offering or IPO.

As well as outright currency deployment, other current uses of blockchain technology in the tyre business include Project Tree, which sees natural rubber supplier ABP as well as Itochu-owned tyre retailer ETEL plus Pirelli, Hankook and Continental to leverage the traceability potential of blockchain technology. Here, blockchain technology is used to identify the volume of raw latex produced by an individual farmer and the location source of this rubber. This can then be tracked all the way through the supply and processing chain to the point it is delivered to the tyre manufacturer.

However, these are not the only manufacturers involved in crypto and blockchain technology, Linglong reports that Jilin Linglong is a world-class intelligent plant that utilises industrial cloud solutions, big data, artificial intelligence, blockchain, 5G, and other advanced technologies in order to fully integrate tyre design, production, management, logistics and marketing.

Taken together, while many projects are in their early stages of development, Vaculug’s IT manager Jason Humphries suggestion that “blockchain technology is not the future, but the now” rings true. However, rather like the move towards autonomous vehicles, the technology might be out there but transition to that endpoint will no-doubt take place in stages.