Bitcoin & Crypto & NFT News
“Maybe it’s not as big a problem as we think it is.”
That sentiment, summed up by bitcoin lending startup founder Shawn Owen, was one of the more notable threads to emerge yesterday at the third annual Satoshi Roundtable, one that followed nearly six hours of debate on challenges facing the technology.
A gathering for well-connected early adopters, top technical minds and institutional evangelists in sunny Cancun, Mexico, the event played host to discussions on a diverse set of issues (token sales, regulation, policy, etc). However, scaling, or the means by which the open-source technology’s rules could be altered to accommodate more users, was high on the agenda.
Though short on conclusions (perhaps owing to issues with this approach in last year), the discussion was notable for its range of approaches to the topic.
Far from just a technical problem, though, there seems to be a sense among bitcoin’s avid supporters that the current challenges are more philosophical and social, made worse by entrenched interests who have an economic incentive for their opinions.
Chief among the topics up for discussion was the state of industry dialogue itself, with advocates from bitcoin’s main technological camps – those in favor of solutions such as Segregated Witness as well as so-called ‘on-chain’ scaling initiatives – agreeing perhaps only that the issue is now almost completely mired in disagreement.
Yet, opinions on the state of industry discussion are evolving in unexpected ways.
For example, one acknowledged area of disconnect is increasingly the question of whether or not bitcoin even has a problem. Even without scaling, the reasoning goes, the price is high and interest in the platform and its security remains strong.
As put forward by BitGo software engineer Jameson Lopp, perhaps bitcoin’s biggest issue isn’t really one at all.
He told CoinDesk:
“Some people see problems around transaction fees and usage, others see problems around scalability and other people see no problems at all. Some see a robust and secure system that is in fact so secure, it can’t even be changed, even if that is potentially for the better.”
At stake here is which version is likely to contribute to a stronger platform, and which one adheres more to its original espoused values – some of which many network participants have devoted years of their life to achieve.
“You have ‘decentralized and secure’, and then you have ‘buy a coffee’,” one participant said.
‘Mired in politics’?
Equally notable were the attempts by discussion participants to understand the motivations on either side of the aisle.
Much thought, for instance, was put into SegWit (a proposal authored by bitcoin’s main technological working group) and why it has yet to be adopted by the network’s miners.
In attendance was one representative of China’s mining community who framed the problem as one that was nearly all political, suggesting that miners were blocking the proposal purely out of a distrust of its technical working group, Bitcoin Core.
Of note is that major miners, he said, have enough stake in the network to block advancements of the proposal – in almost any form.
One idea – that SegWit first be tested on the alternative blockchain platform litecoin as means to showcase its benefits – was met with similar obstacles. While some argued litecoin has perhaps a better chance of adopting the measure, many of its miners are also bitcoin miners who could just as easily impede progress there.
Also discussed was whether China’s miners even perceived there to be any problems with the network itself, and if their continued receipt of rewards would incentivize this group not to pursue any action out of a lack of obvious need.
Yet, there was a minority view that bitcoin’s inability to achieve any technical consensus on a change was perhaps a ‘feature not a bug’, to use an industry analogy.
John Carvalho, a marketing manager at bitcoin livestreaming platform Xotika.tv, for example, argued that the dialogue itself is perhaps misguided, and that bitcoin is simply proving itself at defending complex social and political attacks.
“Everybody here is projecting their own commercial interests onto bitcoin saying that it’s stagnating or failing,” he said, adding:
“All along, bitcoin is just sitting there, the fees are very affordable and they will continue to be affordable.”
Lopp argued that BitGo, for example, is onboarding more users, and that it is ultimately this growth that should define the conversation.
However, Justin Newton, CEO of digital identity startup Netki, offered a different take.
A veteran of the dot-com days, he argued that the view that bitcoin’s inability to achieve any bottom-up decision-making isn’t one that should be necessarily lauded.
“Saying you don’t have a governance model, doesn’t mean you don’t,” he said. “It may not be a transparent process that is auditable and repeatable, but the process exists.”
Compromise and no compromise
Elsewhere, there were signs that there was an increasing appetite for a discussion that would break the months of indecision on how bitcoin could be improved.
There appeared some interest in bridging the gap between the two camps with a compromise that would find bitcoin’s developers committing to increase the network’s block size, a long-contentious technical attribute that mitigates transaction volume, to 2MB, a change that would accompany the approval of SegWit.
Still, there was not broad agreement that consensus could be achieved.
Amidst a backdrop of egos battling egos, others cautioned that even the idea that the ‘scaling debate’ was a finite issue to be solved is impeding progress.
As reasoned by Kraken employee Yifu Guo, all scaling solutions are temporary fixes for battles that will continue on until the technology goes mainstream.
“Maybe scaling is a good problem to have.”
Image via Pete Rizzo for CoinDesk