If the goal of the second Scaling Bitcoin conference was to highlight an “emerging consensus” on the challenges facing the bitcoin network, the day’s panels served mostly to highlight the sometimes extreme differences in opinion that remain between key stakeholders in the technology’s open-source community.

Held in Hong Kong’s Cyberport district, day one of Scaling Bitcoin found speakers debating more freely the variety of proposals for how transaction processing on the bitcoin network should be increased, with presenters often weighing on their preferred path forward.

Given the venue of the event, however, the cultural divide underlining the debate was perhaps most on display, as panels found bitcoin’s largely Western development community and largely China-based mining industry making awkward steps toward opening up a dialogue.

A much-anticipated mining panel, including typically media-shy China-based companies such as Avalon, Bitmain, BTCC, BW and F2Pool, for instance, took place after a series of technical discussions in which the term “China” was often used as placeholder when describing how participants in the transaction processing process might undermine network security.

Whether this nuance was successfully translated was less clear, though members of China’s mining sector made it a point to state that they hope dialogue between parties improves.

Overall, the mining community largely agreed that they would like to see consensus on how best to scale the network emerge soon, but they feel that decisions should be made by the community in a method informed by research, and not the will of any one group.

Bitmain’s Pan Zhibiao said:

“There are many technical solutions. Every solution has pros and cons. The miners are put on a pedestal to be a jury. Right now there is no lawyer on both side. We need a lawyer, we need more discussion, more evidence. ”

While the conversation succeeded in allowing each side to express a willingness to come together to find solutions, more granular or niche issues suffered due to the language gap.

Questions aimed at allowing the mining community to voice their opinion on scalability proposals that do not increase the block size received only sporadic and largely short answers.

Elsewhere, the day’s sessions spanned from topics such as the nature of how consensus is established on the network to showcasing results from tests of existing blocksize proposals.

Miners weigh in

Given the lack of public dialogue on the subject by its participants, the mining panel, moderated by Mikael Wang of bitcoin mining and exchange provider BTCC, was perhaps most direct in its assessment of existing scaling proposals.

There, BW’s Robin Yao; F2Pool’s Wang Chun; FinalHash’s Marshall Long; Bitmain’s Pan Zhibiao; Avalon’s Liu Xiang Fu; KnCMiner’s Sam Cole and BitFury’s Alex Petrov; answered questions on the most widely cited proposals for scaling the bitcoin network, with most of the emphasis falling on BIP 100, which proposes allowing miners to decide on block sizes, and BIP 101, which lays out a timeline for how bitcoin could scale thorough 2036.

Notably, miners such as KnCMiner’s Sam Cole and FinalHash’s Long indicated that they would like to see solutions that combine elements of both proposals in a sign neither has achieved a critical mass of industry consensus. Still, there was hope this could change.

“We’re getting close to something everyone can agree on, that doesn’t put us in a voting power position, and something that doesn’t scale too quickly,” Long said.

Other mining groups were more direct in their support for specific proposals, with Bitmain’s Zhibiao and BTCC’s Wang echoing their companies’ support for BIP 100.

The panelists also got to fire back on common assumptions made in the community about their behaviors, stressing that competition in mining would mean that, under certain proposals, the amount of voting power they had in the network would always be variable.

They also fought against the idea that all mining businesses are equal – noting the differences between centralized industrial mining operations like KnCMiner and BitFury and mining pools that unite many smaller users like BW.com and F2Pool – as well as the idea that these entities would collude along national lines to attack the network

“Before 2014, over half of the hashing power was in the US. But there was no worry about US committing a 51% attack,” F2Pool’s Wang said.

Miners also revealed they are not particularly enthusiastic about the voting rights BIP 100 would award them, as the panelists largely indicated that they are willing to let the network’s developers make consensus decisions provided they don’t hurt their business operations.

“The core developers understand the network the best, they should be the ones who come up with a solution,” Zhibiao said. “The core developers shouldn’t have all the discussions and debate and then ask us to vote.”

Adversarial thinking

Another pervasive theme of the day was the idea that solutions for scaling the bitcoin network should factor for how individual stakeholders are capable of acting in their own self-interest, and that this possibility should govern architecture.

Blockstream’s Andrew Poelstra was the first to introduce the idea he termed “adversarial thinking”, noting that bitcoin is designed to operate without acknowledging how outside factors such as legal contracts or neighborly benevolence could influence certain actors.

“A lot of society is about limiting adversarial behavior,” Poelstra said. “Online things are anonymous, pseudonymous and difficult to trace. If it’s possible to hurt the system, someone will do it. We can’t assume they’ll be caught.”

In his remarks, Poelstra discussed how, under these conditions, even variables that are statistically unlikely need to be considered seriously given that it is expected that the systems in place today will be built on in the future.

“When we move from traditional cryptographic assumptions to more nebulous region of incentives, economics and trust … you assume people know each other or won’t try to screw each other. This is not the world bitcoin lives in,” he continued.

The remarks were continued by developer Peter Todd who talked about the perception of the technology among major banks, which he suggested see the inability to rewind potentially fraudulent transactions as a liability.

The mix of hypotheticals may not have translated well to the international community, as Todd fielded a tough question from a prominent representative of China’s mining sector who argued that none of these participants want to “destroy the system”.

Todd maintained, however, that such sentiments can’t be factored into network design.

“We need to design a system where, if that very friendly, very helpful mining community doesn’t exist for some reason … the system is resilient,” he said, adding:

“We have a community of people that behave more altruistically, but we can’t rely on this assumption.”

Privacy and its relation to security was a larger focus during the day’s earlier talks, including panels by Blockstream president and Hashcash inventor Adam Back and MIT’s Madars Virza, which focused on Confidential Transactions and zero-knowledge proofs, respectively.

Great Firewall of China

Also discussed were scaling issues inherent in the design of the bitcoin mining network, which became another conversation to divide along national lines.

Often evoked was the “Great Firewall of China”, a term used to denote China’s restrictive Internet policies and how they cause communication issues across the distributed bitcoin network.

In his talk, Todd presented this issue as one where self-interested parties on the network could use gaps in information access to their advantage, though its notable that both sides agreed that latency in this messaging system is an issue.

“I personally think that the blocksize topic has conflicts with the Firewall of China,” Zhibiao said. “I think the current BIP 100 proposal would be good, but we need a better solution for the Great Firewall of China.”

Data was also given to support the notion that this issue could affect block size proposals, with developer Jonathan Toomim presenting research on how BIP 101 would be affected.

Should the block size increase to 8MB, Toomim’s data suggests nodes based in China would struggle to relay transaction data.

“Most of the rest of the world can handle large blocks,” Toomim said. “China, though, cannot. We need to get Chinese pools to take their block transactions outside of China.”

Toomim argued that this issue can be alleviated should the community optimize the block verification protocol, but he maintained that having 65% of the total hashrate based in the region was a “problem”.

“The purpose [of The Great Firewall] is to censor and control information, and that has some problems for bitcoin. It makes me uncomfortable to have so much hashing power subject to that system,” he said.

FinalHash’s long, however, noted that this was a matter of perspective, as if the majority of nodes were based inside China, the situation could be viewed differently.

Scope and goal

Though the conversation often veered toward specificity, many presenters sought to stress that all members of the bitcoin community are working toward common goals.

Poelstra encouraged the community to think big with its ideas, noting that, to compete with payment systems such as Visa, the amount of transactions the network can handle needs to expand by “orders of magnitude”.

Elsewhere, Todd advocated for smaller, more immediate steps that seek to alleviate the concerns of the startup community, but push back major decisions about network design until testing can be done to avoid outcomes commonly believed to be negative.

“I don’t have a good way of scaling immediately without taking risks I don’t think are acceptable,” he said. “My proposal is we wait and see. We should not make hasty steps to push bitcoin into a new trust model.”

Todd suggested the community pursue a small block size increase, while voicing his belief that payment channels enabled by the Lightning network should also be deployed.

Blockstream’s Jorge Timon introductory speech also aimed for unity as it illustrated the differences between hard forks, in which the majority of network participants must update their software, and soft forks, which can be updated more gradually.

Overall, Timon sought to propel the audience to work toward non-controversial decisions that could be implemented swiftly, noting that any schism of the network would hurt its value, which would negatively affect all participants.

Timon noted:

“With a hard fork, you’d have an economic balance between two forks in trading. That’s an important point for the pressures for unification. One could fall in price, one might not. You can cannot predict demand for two chains.”

Disclaimer: CoinDesk received a subsidy to attend to Scaling Bitcoin Hong Kong from the event’s organizers.

Images via Pete Rizzo for CoinDesk