The strategic value of blockchain to local governments in developing the Internet economy

In the future, data will become a fundamental resource in economic operations, just like land, oil and capital ^[1] . International reports predict that global per capita Internet traffic consumption will increase 1,000 times in the next decade.

The prospect is very good, but wait, let me ask you a question first? Is it possible for a local government to develop the Internet economy, take advantage of the trend of big data, Internet+, and cloud computing, and develop the local economy in accordance with the five development concepts of "innovation, coordination, green, openness, and sharing"? To put it more bluntly, does the development of the Internet economy have anything to do with the development of the local government's economy?

According to the current deployment of Internet facilities, in fact, a centralized and oligopolistic situation has been formed. If the data resources are not in hand, then the local government's desire to develop the Internet economy will always be in the air and cannot land. In fact, this is also true. The result of the choice of the Internet development path over the past 50 years is that the richest and most profitable part of the foreign Internet economy has been concentrated in the hands of Google, Facebook, and Amazon, while the domestic Internet has become Baidu's Internet: it holds search data; Alibaba's Internet holds e-commerce; Tencent's Internet holds social data. Consumers who spend money are all local, but the locations of business and consumption are all in Beijing, Zhejiang, Shenzhen and Shanghai. When the direct access of information erases the comparative advantage, a large proportion of provinces have trade deficits in the field of Internet economy and e-commerce. The more Internet+ is done, the more significant the deficit is. According to the existing model, the more developed the sharing economy with the help of the Internet, the greater the destructive effect on local government tax revenue.

With the current development of the Internet, it is absolutely impossible to grow Internet merchants in the province or local area. Even if we can invite local governments to develop the economy, the tax cost will be very high. If we cannot invite them, local economic entities on the Internet can only serve as consumers and terminals and cannot participate in the value creation link of the market economy. With the development of the Internet, this will also create and continue to deepen the digital divide, that is, "the gap between the information rich and the information poor." The digital divide, an unbalanced phenomenon in information dissemination and acquisition, may be combined with the long-standing imbalance in urban and rural development, the imbalance in development between different regions, and the imbalance in development between individuals, and even promote each other, cause and effect, and form a vicious cycle, increasing social injustice. This is contrary to our country's strategic policy of comprehensively deepening reform and balanced development.

Moreover, this centralized technical condition cannot support the development of the next Internet economy. With the gradual commercialization of self-driving cars and artificial intelligence robots, Internet-connected toasters, Internet-connected refrigerators and air conditioners will enter the Internet, and the existing Internet infrastructure will not be able to support it at all. The offline of a central node means an economic disaster. In 2015, there were major failures: Taobao was offline for several hours because an optical cable was dug up, and a large tourist ticketing website was offline for nearly a day because its customer data was deleted, etc. I won’t list them one by one. Of course, the most unimaginable thing is what kind of disaster will happen when a self-driving car with a speed of 120 kilometers per hour suddenly loses the connection and cannot connect to the Internet. Blockchain technology will rebalance the Internet and restore it to a safe and reliable state.

The solution of blockchain technology is to recreate a distributed Internet. Based on the human nature of each person, it uses economic incentives to keep big data in the local area. The users who obtain services and the enterprises and individuals who provide services are all in the local area, and the sharing economy can be localized. It can also make full use of price tools to attract data from other places to local governments. Blockchain is a distributed accounting technology, a database technology, an Internet information publishing technology, and a big data storage technology. Just as humans already have a set of social legal systems that can confirm the ownership of physical objects, thereby promoting the development of the market economy, the expertise of blockchain technology lies in the ability to confirm the ownership, measurement, transaction, and permanent storage of each byte of information. Blockchain technology can promote the rebalancing of infrastructure, keep the data generated in the digital society in the local area, and rebalance the Internet economy through distribution, making the Internet safer.

What does it mean to stay local? First of all, it takes electricity to record and store big data. At present, the electricity used by IT and Internet industry operations has reached a high proportion of the national social electricity consumption. In the future, the amount of data will increase by 1,000 times or even 10,000 times, and the demand for electricity will be even greater. We all know that data is processed by silicon chips, calculated, and stored in local cloud computing data centers. Most of the secondary energy electricity is converted from primary energy coal.

Localized Internet economy means: after a huge amount of big data is left in the local market, big data mining and big data industry chain will follow. Building cloud computing centers can promote the economy. Internet finance, new energy vehicles, driverless cars, artificial intelligence, virtual reality, computing law, computing finance, film and television Internet, Internet of Things, government big data disclosure and archiving, smart cities, etc. based on big data can all be developed. If it is a province rich in energy, it can make full use of its energy advantages and transform the coal economy into the Internet economy. Using the local regional cost advantage can also attract data from other places, which makes full use of regional and energy advantages. Even if it is a very inaccurate estimate, according to the current situation, 100 million tons of coal can be used a year. In other words, through the blockchain technology, the market means have been found in the governance of cyberspace. When blockchain technology makes all parties equal again, it will greatly inspire everyone's sharing spirit and take the Internet economy to a higher level.

The current situation is that the blockchain is used as a tool to develop the economy. Only the financial industries in Beijing and Shanghai have made some progress. However, large international companies such as IBM, Cisco, Accenture, ANZ, CLS, Credits, Deutsche Börse, Fujitsu, IC3, IBM, Intel, JPMorgan Chase, London Stock Exchange Group, Mitsubishi UFJ Financial Group (MUFG), R3, State Street Bank, SWIFT, VMware and Wells Fargo have invested significant resources in the governance of cyberspace and are working hard to rebuild the Internet. Blockchain technology has become a trend abroad.

Whoever controls the data controls the world. Against the backdrop of the vigorous development of blockchain technology, local governments are back on the same starting line. Local governments that can fully utilize their advantageous resources will be able to effectively develop their own Internet economy and enable the local economy to develop effectively, becoming the strongest competitor in the new round of economic development.