How China’s Evolving Internet Will Impact Bitcoin Users

How China’s Evolving Internet Will Impact Bitcoin Users

One of the major topics of concern regarding the Bitcoin block size debate has been how the Internet infrastructure in China is evolving over time. With its current data caps and fairly slow speed – compared to the rest of the world – bigger Bitcoin blocks are not something Chinese pool operators and digital currency enthusiasts are looking forward to. But how is China’s Internet developing so far, and what will the future bring?

Also read: Crypto-Counseling: Smart Contracts in Psychotherapy (Part 2: Practical Application in the Sharing Economy)

Internet in China: Surprising Numbers

Some people may think of China as a country where Internet connectivity would be a second nature, but nothing could be further from the truth. In fact, the number of Chinese citizens who actively use the Internet – as of June 2015 – is astonishingly low, compared to the total population of the country.

To put this into some numbers, everyone can relate to: China has 668 million Internet users. While that number is quite high, this translates to roughly 48.8% of the population being Internet-connected. The good news comes in the form of this number being a 0.9% increase compared to 2014. Unlike their US counterparts, Chinese citizens are not steering away from broadband internet.

What may be even more surprising to most people is the number of Chinese citizens relying on mobile Internet connectivity for their day-to-day browsing experience. A whopping 594 million Chinese are using mobile Internet on an active basis, which is an increase of 36.8 million users compared to 2014.  

It is important to keep in mind these 594 million mobile Internet users make up most of the number of total Internet-connected Chinese. As of June 2015, nearly 89% of all Internet users in China consumes web content through a mobile data plan. In the second half of 2014, 85.8% of Internet content was consumed through mobile data.

Some of these numbers might not add in the minds of some people. However, one must remember that China is a very rural country, and broadband Internet connectivity is not as straightforward or widely available as people would like it to be. That being said, 186 million Internet users live in these rural areas, a number that has increased by 8 million compared to the previous year.

Things are Different in China Compared to the Rest of the World

Broadband Internet connectivity in China is a vastly different process from the rest of the world. Online access routers are owned by the government of the People’s Republic of China, and renting bandwidth is a direct contract between the end user and the state. As a result, the government can exercise full control over which content can be accessed by Internet users.

Even though there are several Internet Service Providers active in China, the main four act as the “backbone” of mainland China’s Internet, as they do not offer access to the world wide web directly. Other telecom providers active in the country may offer public internet services although most of them will not offer nationwide coverage.

Earlier this year, an article surfaced on Investors detailing how China has made massive investments in their broadband Internet equipment. There has been a growing demand for Internet access in the country, as the number of active users had increased by 600% since 2011. However, there is still a lot of room left for growth and further improvements.

Chinese Bitcoin Mining Pools Seeking Better Infrastructure

It goes without saying these statistics paint an interesting picture regarding the status of Internet connectivity in the country. Mining pools require more bandwidth compared to most individual users in the country, and as volume has to be rented from the state directly, bigger Bitcoin blocks are not in their favor by any means.

Furthermore, this goes to show how very few people in China are involved in Bitcoin mining, other than hardware manufacturers or exchange owners. With slightly over 70 million broadband Internet connections to speak of, there doesn’t seem to be much room for Bitcoin mining in China right now.

That situation might be about to change, though, as efforts seem to be underway to improve the Internet situation in the country over the next few years. Whether or not the number of broadband Internet users in China will increase spectacularly, remains to be seen. One thing’s for sure, though: mobile Internet access will play a big role in China.

What are your thoughts on the Internet situation in China? How will this sector evolve over the next few years? Let us know in the comments below!

Source: China Daily

Images courtesy of Shutterstock, ZDNet, Etcetera