Bitcoin2014 Day Two Roundup: Tackling Bitcoin's Tough Issues

At day two of the Bitcoin2014 conference, attendees learned about the regulatory issues being faced by bitcoiners in China, upcoming technological challenges and bitcoin investment opportunities.

Later in the day, BitPay CEO Tony Gallippi shared plans for his company's expansion, the topic of the mining arms race was addressed and the Startup Challenge awards were won by CoinPrism and Reality Keys.

Troubles in China

Bobby Lee opened day two of Bitcoin2014 with a presentation about the rollercoaster ride bitcoin has experienced in China.

Lee is the CEO of bitcoin exchange BTC China and was recently elected to the board of the Bitcoin Foundation.

He explained the troubles the currency has faced in the country over the past five months, talking the audience through the suppressive actions taken by the People's Bank of China.

Lee outlined the current situation: there have been no written orders from the central bank, but all the major Chinese banks have stopped dealing with bitcoin exchanges, with some closing their customers' corporate and personal accounts. He said:

"It's had a very chilling effect. Due to the verbal guidance over the past few months, people are spooked."

Lee suggested it hadn’t helped that the state-controlled media has switched its stance on bitcoin, now only reporting negative stories about digital currency.

He explained laws in China are purposely ambiguous, enabling the government to adapt or update the rules as and when it pleases. Unfortunately, this means there is no way of telling what the government's next move will be.

Lee doesn't think bitcoin has run its course in China, but he later revealed in a conversation with CoinDesk that he was exploring the potential of moving his business overseas.

Technical challenges

Next up was a panel discussion looking at the technical challenges bitcoin is set to face in the near future.

The session was moderated by Michael Terpin, co-founder of BitAngels, an angel investor group for digital currencies, which has invested at least $7 million into digital currency startups.

Bitcoin 2.0 was the first topic on the agenda, with the panellists discussing the potential merits and pitfalls of adding services other than digital currency onto the block chain.

Maidsafe CEO David Irvine, who has embarked on an ambitious project to ‘decentralize all Internet services, including enterprise data centers’, told the audience that the digital currency community shouldn't "pray to the block chain".

He elaborated by explaining that a number of decentralised systems with different purposes can exist side-by-side, they don't have to all stem from the bitcoin block chain.

The discussion turned to the technological advances that need to be made this year. Irvine said the main priority should be the development of a user-friendly bitcoin wallet.

John Light, founder of Buttonwood SF and PawnCoin, thinks multisig will really take off in 2014, labelling it "two-factor-authentication that is backed up by the block chain".

BitPay's Ryan Charles, on the other hand, said he thinks it is inevitable that hardware bitcoin wallets will increase in popularity.

Alternative cryptocurrencies were praised by panellist number four, Sean Neville, Circle’s co-founder and CTO, whose company finally unveiled its plan to bring bitcoin to the masses this week.

"Experimentation is fantastic," he concluded.

BitPay's expansion plans

“Amsterdam has more per-capita penetration for bitcoin than any other country,” enthused BitPay CEO Tony Gallippi as he kicked off his presentation on driving business adoption, adding that the ability to eat, sleep, pay bills and even medicate yourself with the currency is what makes the conference's host city so unique.

His presentation tackled a wide-range of issues faced by consumers today, including credit card fraud, “It claims 12 million victims each year,” and outdated payments technology:

“Credit cards were never designed for the Internet. They’ve changed [very little] in 55 years.”

By contrast, Gallippi was bullish on bitcoin's future, revealing impressive growth statistics – over 30,000 merchants worldwide and an expanding team spanning three continents – and an appetite for technological innovation.

The CEO emphasised BitPay’s continued commitment to open-source development, citing the hire of Jeff Garzik, as well as the company's Bitcore, Copay and Insight initiatives.

Hailing 2014 as the year of multisig, Gallippi revealed how few users actually use it:

"On [bitcoin's] top 100 rich list of addresses, not one is secured with multisig."

However, he predicted that 10% of bitcoin assets would be stored using multiple signatures by the end of 2014.

Following BitPay's record-breaking funding round earlier this week, Gallippi finished with equally ambitious expansion plans to open an Amsterdam bitcoin centre. “We’ll call it ABC until it has a real name,” he quipped.

The high-tech space will play host to everyone from central bankers to investors, startups and developers. In Gallippi's words: “We all accelerate faster as a group.”

Co-authored by Emily Spaven and Grace Caffyn

Images by Grace Caffyn