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Information asymmetry of blockchain,The application of blockchain technology in financial management is developing day by day, and enterprises should seize the opportunity

Time : 27/01/2022 Author : di39zq Click : + -
        Blockchain technology is a synthesis of some technologies extracted from the underlying technologies of bitcoin applications. In essence, a blockchain is a distributed database composed of linked data structures, which are connected by data blocks. The data block is a carrier that can store valuable information in the transaction in the form of data. Then the data block will be added to the existing link in order, and the added time zone block will be encrypted and converted into a unique hash value. 1.2.1 under the decentralized blockchain technology, the transaction is completed in a point-to-point manner, and the data is stored in a distributed ledger without centralized management through a center.
        Each node in the blockchain can store data. When a transaction needs to record new data information, the transaction data will be directly added to the node. After verification and approval, the new data will be transmitted to other nodes in real time, so that each node will have the same complete account information. Once the information in the blockchain is established and propagated, the information on a single node cannot be modified or deleted. Because the hash value of a block on a node is modified, the information of this node is inconsistent with that of other nodes in the blockchain, and this exception will be quickly identified and excluded. Therefore, the inside of the blockchain presents a natural and mutually supervised state. From the outside, hackers can not tamper with the information of the whole blockchain by attacking a node.
        Each new block in the blockchain contains the hash value of the previous block. Only when this condition is met can the new block be added to the link, and each block has its own unique identifier. In this way, the transaction data in the blockchain is not easy to be changed, and it is also convenient to query the data in the blockchain. Information asymmetry means that the operators inside the company can obtain more information about the company's operation than the investors outside the company. Therefore, the party with more information is in an advantageous position, while the party with less information is unable to make accurate and sufficient judgments on the company's business performance and development prospects based on the limited information, so it is in a disadvantageous position.
        Information asymmetry mainly affects the financing and investment process of enterprises. During the financing process, any investor is well aware of the information asymmetry between them and the enterprise operators. In order to reduce the risk, they will evaluate all companies with low average expectations. No matter how good or bad the companies are, they will all be classified as the same type. At this time, if companies with good performance want to prove to investors that they have good operating conditions and development prospects, they need to adopt a high-cost signal transmission method that other companies can not follow and transmit information to external investors. During the investment process, the operator of the invested party can fully grasp the investment situation, but the investor can only obtain some information. Therefore, the invested party may use the funds for other purposes against the wishes of the external investors. If the external investors want to obtain more information, they must pay additional fees, which will also increase the transaction costs.
        In the traditional internal financial network or ERP system, all levels, departments and users can only access part of the information that is open to them, and can only operate within the authorized scope. When processing information, it can only be transferred and reported layer by layer, which is not only inefficient and flexible, but also prone to errors. Information may not be transferred in time, affecting subsequent operations, leading to conflicts in information processing processes, leading to leaders' inability to timely obtain financial information and make corresponding decisions. This phenomenon will be more prominent because of the more detailed division of labor in modern large enterprises. For example, when processing orders, many departments may be involved, such as dealers, planning and dispatching room, finance department, manufacturing division, storage and transportation department and technical service department, which often lead to problems of poor connection between departments and unimpeded information transmission. In the end, the dispatching room may not grasp the information accurately and then send the goods to the manufacturing division with existing inventory. The operation process and procedures are complicated, which makes the customer wait too long, The technical service department failed to timely transmit the collected customer feedback information to the production and other relevant departments, which affected the subsequent updating and improvement of the products.
        In the current financial management activities, the processing, storage and transmission of financial information will mainly face risks from both systems and people. System risk refers to the risk in the generation and transmission of information under the traditional data storage mode. In this data storage mode, all data storage and processing are completed by the host, so the security of the host is critical. If it is attacked by the outside, the financial information of the whole enterprise will be affected or even completely lost. Artificial risk refers to that technical personnel or financial personnel deliberately forge, fabricate or maliciously tamper with financial information based on certain purposes and personal purposes of the company, making the financial information of the enterprise unreliable.
        The traditional financial information processing mode involves a lot of manual processes, which provides opportunities for artificial fraud. The most common is that listed companies use financial fraud to increase stock price, increase income and reduce costs. In addition, listed companies often resort to related transactions, non recurring profit and loss adjustments and other fraudulent means to achieve tax avoidance, financing, listing and other purposes. When the reliability of information cannot be guaranteed, the users of financial information will seriously affect the relevant decisions and judgments based on these false financial information, and ultimately affect the survival and development of enterprises. First of all, between shareholders and creditors, the creditors lend funds to the enterprise, and the enterprise is controlled by each shareholder, which is equivalent to the creditor's money being managed by the shareholders. Therefore, the principal-agent relationship between shareholders and creditors is established.
        Shareholders will get more information about the operation and development of the enterprise than creditors, and the goal of shareholders is to maximize their wealth, so they may seize some opportunities to obtain excess returns. These operations may damage the interests of creditors and increase the risks faced by creditors to a certain extent. Secondly, between the shareholders and the management, the shareholders are the owners of the enterprise. However, there are many shareholders in the enterprise. Not all shareholders have the right to manage, and it is impossible to let all the shareholders with the right to manage the company. Therefore, through the board of directors, the shareholders' meeting of the company selects appropriate management personnel to manage the company instead of the shareholders, thus the principal-agent relationship between the shareholders and the management is established.
        The shareholders hope that through the management of the management, the company can survive and develop in the long term and realize the maximum wealth of the shareholders. The management hopes to make good performance within the limited term of office, and also hopes to meet the personal interests as much as possible. This may damage the long-term interests of the company and the interests of the shareholders. Since the management actually manages the company, it will have more information about the company, while the shareholders generally judge the quality of the company managed by the management through changes in the stock price. Due to information asymmetry, shareholders must take corresponding measures to ensure that the management can manage the company better instead of them, such as forming a good corporate culture, setting up supervision and incentive mechanisms, which will inevitably generate more related costs.
        Blockchain is a distributed database that is recorded and maintained by various nodes. For open users, when a node records modification information, the recorded modification information will be immediately transmitted to all nodes, so that all participants can obtain the same amount of information, realizing the transparency of information, and greatly improving the asymmetry of traditional financial management information. Between shareholders and creditors, creditors can obtain more business information of enterprises and strengthen the supervision of shareholders. Shareholders will also restrict their behavior according to the provisions of the loan contract, so as to better protect the rights and interests of creditors and reduce the risks faced by creditors. Between the shareholders and the management, the shareholders can obtain more information about the decision-making of the enterprise and realize effective supervision of the management.
        The management also tries its best to consider the interests of shareholders from the perspective of the long-term development of the company, so as to meet both the interests of shareholders and their own interests. As a result, the related costs incurred by solving the agency problem will also be greatly reduced. Capital is the foundation for the survival and development of enterprises. Only when enterprises have sufficient capital can they ensure the smooth progress of enterprise activities. When the enterprise is short of funds, it must be replenished in time through financing, otherwise it will affect the business activities of the enterprise. The difficulty of financing has always been a problem faced by enterprises. This phenomenon is more obvious in small and medium-sized enterprises, because they lack core competitiveness and their capital chain is weak.
        The emergence of blockchain technology can alleviate this phenomenon to a certain extent. Lending to commercial banks is an important channel of traditional financing for small and medium-sized enterprises. However, due to the imperfect financial information of small and medium-sized enterprises, the credit relationship of enterprises is worse than that of large enterprises, and banks cannot obtain sufficient information to evaluate the credit and repayment ability of small and medium-sized enterprises. Therefore, when enterprises lend loans, banks should improve the loan requirements on the one hand, and reduce the loan amount on the other hand, so as to reduce the risk of banks. Under the blockchain technology, the financial information of small and medium-sized enterprises will be truly recorded on the blockchain, so that banks can make judgments on the business situation of enterprises and evaluate the repayment ability of enterprises based on these information.
        On the blockchain, there will also be previous loans and repayment of enterprises, and banks can judge the credit level of enterprises based on this. In this way, the possibility of commercial banks lending to small and medium-sized enterprises and the amount of lending will be greatly improved. In addition, the smart contract of the blockchain adds a layer of insurance to the bank. A smart contract is a piece of code numbered in advance, and then the execution conditions of this code will be set. When the execution conditions are met, the code will be automatically executed. Therefore, when an enterprise applies for a loan from a commercial bank, the loan related information, including the collateral provided by the enterprise to the bank, the repayment date, the repayment amount and other loan related information will be stored on the blockchain. When the repayment conditions are met, the system will automatically repay.
        The bank can receive the repayment on time and reduce the possibility of non-performing loans. Even if there are non-performing loans, the smart contract can automatically stop the operation and stop the loss in time to help the bank reduce greater losses. Therefore, the risk faced by the bank will be greatly reduced. According to the capital asset pricing theory, if the risk faced by banks is low, the financing cost of enterprises will be reduced. Blockchain technology also promotes supply chain finance, a new financing mode. Supply chain refers to a complex chain composed of manufacturers and their upstream suppliers, downstream distributors, retailers and even end users. Each entity in this chain must have business dealings with its adjacent entities, and other non adjacent entities are also connected with each other because of the intermediate entities.
        Supply chain finance is to focus on a core enterprise, then analyze the supply chain where the core enterprise is located, evaluate the whole supply chain, and then provide financial services to multiple enterprises in the supply chain to ensure the smooth supply, production and sales of the whole supply chain. However, the actual situation is that the transactions and information generated between the entities in the supply chain are stored in the systems of the respective entities, resulting in the opaque flow of information between the entities and the inability of the entities to accurately know the transaction matters, which will affect the operation of the supply chain finance. The blockchain technology can improve this phenomenon. First, under the blockchain technology, the transaction business of each participant will be completely recorded and transmitted to other participants, ensuring the liquidity and transparency of information.
        Secondly, all the recorded data under the blockchain technology are tamper proof. The timestamp technology ensures that each record is well documented, which can avoid the possibility of data fraud and disputes between the participants. Finally, the smart contract of the blockchain reduces the risks of both parties, simplifies the transaction process, improves the transaction efficiency, and reduces the related costs. The application of blockchain technology has greatly improved the effectiveness of the market. It can not be tampered with and has the function of mutual supervision, which will restrict the investment behavior of the management. Before making investment decisions, the management will comprehensively consider the results of various choices from the perspective of rational people, and will also weigh their own goals and the overall goals of the enterprise, ensure the consistency of the two, and try to achieve a win-win situation between the interests of the enterprise and their own interests.
        Therefore, with the support of blockchain technology, some irrational investment behaviors such as over investment or under investment will be avoided. In addition, the traceability feature of the blockchain enables the management to obtain not only the information of the invested enterprise's projects, but also the relevant information of the business dealings with the invested enterprise on the chain. In this way, sufficient information can be grasped horizontally and vertically, and the possible problems in the investment process can be predicted in advance, reducing the uncertainty of the investment, thus greatly improving the success rate of the enterprise's investment, Effectively promote the survival and development of enterprises. The application of blockchain technology in the field of financial management has had a positive impact on many problems existing in the current financial management, and has improved the efficiency of financial management to a certain extent.
        At present, the application of blockchain technology in financial management is still growing. Enterprises should seize this opportunity, strengthen the research of blockchain technology, promote the integration of blockchain technology and enterprise financial management, and bring more positive impacts to enterprises.
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