It has been said that bitcoin is in a crisis as its community attempts to reach consensus on how best to scale the technology to increase its capacity, and the evolving debate was on display at Consensus 2016 today.

Perhaps the day’s most visible panel was one featuring former Bitcoin Core maintainer Gavin Andresen, who just the night before had revealed he believes he has received proof that Australian cryptographer Craig Wright is bitcoin creator Satoshi Nakamoto.

As a result, when Andresen joined Ethereum investor Vitalik Buterin; Bitcoin Core developer Eric Lombrozo; and Neha Narula of the Digital Currency Initiative at the MIT Media Lab to discuss how consensus should be reached in public blockchain projects, attendance was high.

Pindar Wong of Chairman of VeriFi even interrupted the beginning of the day’s session to allow Andresen to address the crowd, at which time he denied claims his account had been hacked or that his statements were part of a hoax.

Andresen said:

“[Craig Wright] signed, in my presence, using the private key from block #1, the very first block mined on a computer. I was convinced.”

Buterin, playing contrarian, however, dismissed the idea with his assessment of the evidence.

“If you have a good way or a noisy way to prove something and you choose the noisy way, it means that you can’t do the good way,” he added.

Scaling challenges dissected

Once that discussion dissipated, the conversation moved to why finding this sort of consensus when dealing with technology protocols can be so tricky, with panelists weighing in on the topic.

Vitalik Buterin, co-founder of Ethereum said:

“I have found that open blockchains in general are this very unique kind of environment in that they’re not like any traditional corporation, country or software system because there is no one group that directly controls it. It particularly becomes interesting because the group that controls it is often unspecified.”

Because of this lack of control by any single source, pushing toward definition around the protocol is an uphill battle, the panelists said. Further, they added that there is the need to find consensus without pulling from compatibility because if two nodes disagree, there’s the potential for a fork.

Andresen argued that “there’s a balance between compatibility and diversity”, but that he believes bitcoin developers needs to get “more serious” about protocol definition.

But the ultimate conclusion from the panel may have come from Neha Narula, who succinctly summed up what many in the bitcoin community have been suggesting for some time:

“What is new and exciting is this open access platform and using rationality and using currency. There is a lot of excitement about moving toward closed and private blockchains and I think you’re missing the point of this entire revolution.”

PoC to Production

Elsewhere on the track, a panel on proof-of-concepts focused on a different tech problem, namely, how can large corporations generate innovative ideas and use blockchain as a tool to solve problems. It’s one thing to have an idea or even a demo on a new use case for the blockchain, but it is entirely different to actually develop it and have people using it.

Meltem Demirors of Digital Currency Group; Scott Mullins of Amazon Web Services; Catheryne Nicholson of BlockCypher; and Eric Piscini of Deloitte, joined Forbes’ Laura Shin for a discussion on this issue.

Nicholson laid out, in clear terms for those that have not been part of the development community, the steps to take from ideation to production. She explained that a proof-of-concept is all about the hacking mentality, with 10 engineers working on 10 projects to see what sticks.

But she explained that when you move from POC to prototype, it’s a complete rebuild.

“A proof-of-concept doesn’t move to a pilot. As Deloitte says over and over again, it’s a complete restart and different environment. You take those use cases and then begin to look at how you put it into production,” Nicholson said.

And only from that complete rebuild can a team begin to move toward an environment where they can scale their product in production, she said.

Still, another challenge, Piscini said, has to do with generating ideas.

He said:

“One of the challenge that we are facing across industry is that people are trying to fix issues with blockchain where there is nothing to fix or we can fix it with something else.”

Demirors explained that what the blockchain allows for is disintermediating the need for trust. She argued that if there are examples of an exchange of paper in one’s organization, that could be a scenario ripe for implementing the blockchain.

However, despite these big-picture ideas, panelists said those looking to harness the technology should understand that things are going to take time.

With this in mind, what the room agreed was Piscini’s advice that users should start small and build on progess:

“Don’t start from the bottom. Leverage what is available already. Build what is important for you on top of that.”

Decentralizing & Disrupting Existing Markets

For those that are particularly bullish on the blockchain, one idea that has taken hold is the idea that its decentralized model of operations can be applied to other business models.

On this panel was Brian Hoffman of OB1, Ryan Shea of Blockstack Labs, Elizabeth Stark of Lightning and Erik Voorhees of Shape Shift, who joined Perianne Boring of the Chamber of Digital Commerce to discuss projects that are applying this thesis to new markets.

The early discussion had to do with OB1, which is the creator of decentralized bitcoin-based market OpenBazaar. Hoffman revealed that since launch, there have been over 110,000 downloads with usage in over 130 countries.

However, on the topic of illicit activity, Hoffman sought to explain why platforms such as OpenBazaar are beneficial despite allowing illicit activities by bad actors.

Yet, he did offer:

“What is important to note is we’re not like eBay or Etsy where we have control of the full stack. We’re a software development team who built an open source project. We created a tool. We encourage positive use, but it’s really up to the actors in the network to determine how it is used.”

Voorhees explained that there was a serious double standard when it came to blockchain technology and other new technologies. Specifically, because law enforcement and regulators understand the Internet, email and cell phones.

But another theme developed as the panelists talked about their projects: each depends on the other for success. Hoffman explained that if they had tried to integrate every altcoin into OpenBazaar, it would have been time prohibitive. Yet, by utilizing the Shapeshift platform, individuals could pay for goods with any currency they wanted and then have it automatically transfer to bitcoin.

And there was also some potential for integrating with large, enterprise clients.

Ultimately, what the panel agreed on was that this technology is still young and that there is a lot of growth coming. While none agreed that a standards body was needed presently, they were open to the idea of having a standards body for the future.

However, they cautioned that when big companies get involved in standards, it can turn into a scenario where the big company ultimately dictates everything.

Law Enforcement & Anonymous Transactions

The day continued with a discussion on finding a balance between the implicit freedom of speech with software and law enforcement needing to enforce misuse of bitcoin and blockchain-based services.

Brian Klein of Baker Marquart; Prakash Santhana of Deloitte; James Smith of Elliptic; and Zooko Wilcox of ZCash discussed this topic in a panel moderated by Jason Weinstein of the Blockchain Alliance, which centered on how law enforcement is constantly playing catch up with criminals.

Part of the reason this phenomenon exists is because criminals are the first to adopt technology, they said. “Criminals learned how to use the Internet before anyone else except Al Gore,” Weinstein joked.

One of the discussions had to do with opt-in or opt-out privacy.

Wilcox talked about how bitcoin is currently opt-in privacy, which he argues is problematic. He explained that most users of software use the out of the box settings, so if those are not secure, there are problems.

He argued that ZCash encrypts everything and then gives the author the decryption key. He argued that this opt-out of privacy could make transactions more secure.

Ultimately, it boiled down to the cat-and-mouse nature of law enforcement. Criminals run ahead with a technology and then the law enforcement catches up, the panelists agreed.

Smith explained that his company has to do two things to ensure that they can help law enforcement. The first is analyzing transactions and data to find how they relate. There was also a research component to it as well. “We gather a lot of data from the dark web to understand how the marketplaces work and the mixing services work,” he said.

More often than not, the problems that people equate to bitcoin are actually ones with cybersecurity. Fix those problems and bitcoin becomes useless for criminals.

Weinstein ultimately said:

“Criminals should run, not walk, away from bitcoin.”

Day two of the conference resumes tomorrow with guests including former US Treasury Secretary Larry Summers, R3CEV CEO David Rutter and 21 Inc CEO Balaji Srinivasan.

Image via Pete Rizzo for CoinDesk