Application of Blockchain Technology in Optimizing Resource Allocation Efficiency

Jiaming LI, Yihan XU, Li’nan JIN, Nuoya LIN, Xiaofei LI

College of City Construction, Jiangxi Normal University, Nanchang 330096, China

Abstract Based on the existing literature, this paper analyzed and explored the factors that affect the efficiency of resource allocation, and evaluated the current situation of resource allocation in various fields. It is found that with the emergence of the new pattern of China’s economic development, the economic growth rate has slowed down, and the method of large-scale production driving economic growth is no longer applicable to the current economic situation. Nowadays, when structural transformation and upgrading have entered a new stage, to achieve the optimization of resource allocation efficiency, it is necessary to start from three aspects: improving information transparency, upgrading industrial structure, and planning government intervention. Through the adaptation analysis of blockchain technology and the existing problems in optimizing resource allocation efficiency, it explored the feasibility of blockchain technology to optimize resource allocation efficiency, and promote economical, efficient and high-quality development.

Key words Resource allocation, Efficiency, Blockchain technology, High-quality economic development, Application

1 Introduction

Since 2020, China’s central and local governments have issued a series of policies about blockchain. At present, major countries in the world are accelerating the development of cluster technology chains, thus further in-depth research on the application of blockchain technology is of great significance. The economic growth theory shows that the optimization of resource allocation efficiency influences the high-quality economic growth to a certain extent. Some scholars have found that the progress and development of related technologies plays a certain role in the optimization of resource allocation efficiency. Based on the existing research results of resource allocation and blockchain technology, we explored the feasibility of blockchain technology to optimize the efficiency of resource allocation, in order to provide a certain reference for the development of related industries.

2 Literature review

Ehrlic and Seidel[1]believed that the more agglomerated industries, the weaker the information asymmetry in the market, while the information sharing between enterprises can effectively improve the efficiency of credit resource allocation. Using the investment elasticity coefficient model, Xu Keetal.[2]analyzed the efficiency and fluctuation of capital resource allocation in central China in the past ten years, and found that the adjustment of industrial structure would influence the efficiency of capital resource allocation in central provinces. Liu Manfengetal.[3]analyzed the wind power enterprises in the current market by establishing a production factor model and found that improper government intervention may weaken the effect of resource allocation efficiency optimization on capacity utilization. Through the Bootstrap-DEA model analysis, Li Junxia[4]concluded that the Chinese government’s financial investment is too much, and the enterprise’s investment is insufficient, and the weak factor liquidity is not conducive to the improvement of the efficiency of financial resource allocation.

3 Analysis of resource allocation efficiency

3.1 Information transparencyData barrier is a major problem obstructing the efficient allocation of resources optimization. Both inside and outside the enterprise, there is a certain degree of information asymmetry. The circulation of capital information resources in the capital market is weak, which is not conducive to the circulation of capital in the industry. At present, the infringement upon investors’ rights and interests caused by information disclosure in China’s capital market has occurred from time to time, which has seriously affected the enthusiasm of investors. This is also an important reason why it is difficult to improve the efficiency of resource allocation with low information transparency. Therefore, it is an urgent problem how to improve the information circulation mechanism and improve information transparency on the premise of protecting the rights and interests of investors, provide investors with timely and accurate market information, enhance investors’ confidence and rationality of decision-making, and then improve the efficiency of resource allocation.

3.2 Industrial structureIndustrial structure is closely related to the resource allocation efficiency. With the upgrading of the industrial structure of the region, the enhancement of its ability to integrate human resources, capital, communication and big data in the middle and high-end elements, its resource allocation ability and benefits will be further enhanced. Therefore, it is necessary to optimize the industrial structure, gather the most limited industrial resources to develop knowledge-intensive and information-intensive industries, promote the reduction of energy consumption per unit of GDP and the elimination of backward production capacity, promote the adjustment and optimization of the industrial energy structure and the optimization of the internal structure of the industry, so as to improve the overall allocation efficiency of industrial resources[5].

3.3 Government interventionThe fundamental issue raised by microeconomics is how to allocate scarce resources in an effective manner. The reasonable allocation of resources is often completed jointly by the market mechanism and government regulation. However, since the reform of the tax-sharing system, the mismatch of financial rights and powers in some local governments has led to excessive financial pressure on local government. The government promotes regional economic development to compete for financial resources for the region by intervening in the allocation of financial resources to alleviate the economic pressure[6]. Under the circumstance that the local government’s disposable financial resources are reduced, the grass-roots government is forced to find a source of funds due to financial pressure, accordingly bringing about the "land finance". The allocation of land resources basically depends on administrative means and administrative measures rather than economic means and economic leverage, and it is also determined by the fundamental system of China’s public ownership and the actual national conditions of imperfect market[7]. The role of government intervention weakens the role of market mechanisms, leading to relatively inefficient allocation of resources. Therefore, it is necessary to think about how to optimize resource allocation under the current national conditions and provide the government with more reasonable decision-making opinions on resource allocation.

4 Overview of blockchain technology

4.1 DecentralizationThe bottom layer of the blockchain is a peer-to-peer network (P2P network), and each node in the network has the same rights and obligations[8]. Besides, the distributed consensus algorithm can be used to make the system state of the entire blockchain consistent within and between nodes, while the distributed characteristics brought by decentralization also make the blockchain system more highly available, and greatly reduce the problem of single point of failure (SPOF)[8].

4.2 Non-tampering and traceability of dataThe blockchain system completes the link between blocks through a hash chain. Due to the non-collisable nature of the hash algorithm, once the historical transaction of a certain block is modified, it must also make appropriate adjustments to the hash chain of the entire blockchain system[8]. At the same time, because each participating node in the blockchain network has the same copy of the data, the modification of the blockchain data by a malicious node is also invalid[8]. In addition, using the historical blocks saved in the blockchain, people can also track the historical behavior of any data loaded into the blockchain.

4.3 Partial privacy protectionGenerally, blockchain systems use the public key of an asymmetric system to identify users. Users do not need to reveal their real identity when completing the transaction, only the public key address is required. Only through the corresponding key can the data be obtained, realize the encryption protection of the information, and ensure the security of the user’s information.

5 Analysis of application feasibility

5.1 Policy supportNow, it is in a period of global "great changes unseen in a century". Under the influence of the COVID-19 epidemic, the global economy is quietly changing, and the era of digital economy has arrived. For China, this is both an opportunity and a challenge. China has ushered in an important moment of development. The digital economy needs to rely on technical means to achieve, and the blockchain is the leading technology in the process of economic digitalization. Under the influence of the demand of the digital economy, the layout of China’s blockchain industry has been accelerating.

In 2020, the central government of China and many provinces and cities have successively issued relevant policies to promote the development of blockchain. According to statistics, only in one year, there were 36 national-level blockchain-related policies in China, accounting for 21%. Among them, there were 22 relevant policies included in the government work report, accounting for 13% of the total policies; there were 24 special policies for provincial and municipal blockchains, accounting for 14% of the total polices; there were 90 pieces of information about blockchain mentioned in other policies, accounting for 52% of the total policies, as shown in Fig.1.

Fig.1 Diagram for blockchain-related policy categories

5.2 Analysis of adaptation degreeBased on the above problems found in the analysis of resource allocation efficiency, combined with the comparative analysis of the characteristics of blockchain technology, we found that the information sharing function of blockchain technology can solve the problems of information barriers, low information flow efficiency and low efficiency. The non-tampering and traceability of data can monitor the entire process through information operation records, improve work efficiency, save costs, and ensure the accuracy of information[9]. Besides, its encryption mechanism can effectively protect information security to prevent data leakage. Through matching the problems existing in the process of resource allocation optimization with the advantages of blockchain technology (Fig.2), we found that the information sharing characteristics of blockchain technology can improve the transparency of information and solve such problems as poor information flow inside and outside the industry and decentralization of control centers,etc.The traceability and non-tampering of its data can also effectively improve the accuracy of information, thereby optimizing the industrial structure and providing guarantees for the effective decision-making of enterprises or governments. Decentralized algorithms can ensure information security, improve users’ recognition of technology, and enhance public participation. In view of the above, blockchain technology has a high degree of adaptation to resource allocation, which can effectively solve the problems existing in the pursuit of improving the efficiency of resource allocation, optimize the structure of resource allocation, and accordingly promote high-quality economic development.

Fig.2 Application feasibility of blockchain technology in resource allocation

6 Conclusions and recommendations

Nowadays, major countries in the world are accelerating the development of blockchain technology, while the growth rate of China’s economic development has started to slow down. In this situation, the problem of optimizing the efficiency of resource allocation appears particularly prominent. How to further apply blockchain technology to the optimization of resource allocation efficiency has become a problem that we need to pay attention to. (i) The unique algorithm method of blockchain technology enables the data to be encrypted and integrated effectively, realizing information sharing while ensuring information security and breaking information barriers. (ii) The intelligence and synergy of blockchain technology can effectively improve the allocation capabilities of production factors, especially advanced production factors, and then promote the optimization and upgrading of industrial structure. Blockchain technology, as a technical high-level element, can effectively embed capital, labor and other production factors with the help of the development of digital economy, delay the arrival of the inflection point of diminishing marginal returns of primary production factors, and accordingly promote the optimization and upgrading of China’s industrial structure[10]. (iii) The interference of government mechanisms in the allocation of some resources can not be eliminated. Local governments will intervene in the allocation of financial resources to alleviate financial pressures, including the long-term "land finance", as the relative scale of fiscal revenue changes, which can not be solved overnight. In cases where the impact of government intervention cannot be eliminated, blockchain technology can be used. In the first place, it is recommended to increase the public participation through the decentralization of information sharing. In the second place, it is recommended to provide the government with more accurate information through the overall processing and traceability of data, so that the government can make more reasonable plans in resource allocation to optimize resource allocation and provide a strong guarantee for high-quality economic development.