Bitcoin Industry Takes On Security Challenges

 Bitcoin News

TNABC 2015

Day two of The North American Bitcoin Conference (TNABC) was perhaps most notable for an absence of expected speakers, including Blockstream’s Adam Back, Bitstamp COO Jean-Baptiste Graftieaux and GAW Miners CEO Josh Garza, all of whom canceled scheduled appearances.

However, the development may have been fitting given that the event succeeded at highlighting themes in the industry as opposed to individual speakers, though security was the most visible topic of the day.

A number of speeches and roundtables addressed security in both specific and abstract ways. The ongoing issue of how to make bitcoin more secure, whether that means boosting its struggling cloud mining sector, upgrading exchanges and wallets or developing a strategy for existential threats like regulation, seemed present in many sessions.

Dave Ripley, CEO of bitcoin wallet startup Glidera, summed up one of the day’s mostly commonly cited aspects of this conversation, the security of consumer funds on the bitcoin network, telling CoinDesk:

“Security is solved for the very technologically savvy user, it’s definitely not solved for the mainstream user.”

Steven Sprague, whose security startup Rivetz presented at day one’s startup stage, articulated this point more specifically, touching on security with a nuance that is often lost in the mainstream media coverage of bitcoin.

“I think everybody understands that the blockchain is an amazing piece of technology, but there’s another half of it, which is ‘How do I send instructions to the blockchain?’”

This emphasis was echoed by TNABC organizer Moe Levin, who told CoinDesk he believes the big question on display at the event was the ongoing battle between convenience and security. Further, he suggested other topics might have suffered in light of the emphasis on this recently visible challenge.

“I don’t think enough time was given to how mass consumer adoption will happen this year,” said Levin.

In his closing address, Levin provided an appropriate dramatic weight to this conversation, advising the industry:

“We’re at a juncture now, we must make wise decisions to ensure bitcoin’s success.”

BitGo on security in 2016

Will O'Brien, BitGo

“We’ve had too many hacks, too many losses.”

BitGo CEO Will O’Brien issued this statement early in the day’s proceedings in a talk that focused on his company’s multi-signature bitcoin wallet technology, as well as the larger struggles of the industry to provide users better security.

O’Brien notably illustrated how he expects security to advance in the year ahead. His most direct prediction may have been that 2015 will see the industry adopt a ‘multi-institutional’ security standard that will see companies sharing the responsibility of holding and securing private keys.

“By the end of this year, it will no longer be acceptable for one company to hold all the keys to a wallet,” O’Brien said. The statements could signal a trend given that 2014 was framed as the ‘year of multisig’ by many in the industry.

Buterin talks sustainable growth

Vitalik Buterin, Ethereum

Ethereum’s Vitalik Buterin was in attendance for a talk billed as being about the crypto 2.0 industry, though it was geared more specifically toward providing a high-level view of what makes decentralization valuable.

Buterin also touched on the issues inherent with centralization, while framing bitcoin as just one of many already commonly used forms of decentralized technology.

For example, Buterin cited web link rot, whereby older outdate links die when the websites they link to are not longer maintained, as a pressing mainstream issue that could be solved by the community.

“If all these websites were stored on a decentralized network, they would at least live forever or as long as somebody cared about them,” Buterin quipped.

Buterin also outlined his five-layer overview of the crypto 2.0 space, a loose category he said for what has become a “convergence of different technologies”. Though, his talk was able to articulate how these developing parts of the ecosystem intend to work together, even if the specific details have yet to be determined.

Mining at a crossroads

TNABC, Mining panel

Security was also top of mind during a mining panel that included BitFury CEO Valery Vavilov; Bitmain’s Yoshi Goto; Spondoolies-Tech CEO Guy Corem; Aquifer’s Anthony Brough; and developer Luke Dash. The panel was moderated by Tally Capital’s Matthew Roszak.

The talk began ominously with Corem describing the ongoing issues in the cloud mining segment of the bitcoin industry, as pervasive, stating:

”Cloud mining is a real problem for us, there’s lots and lots of ponzi schemes.”

Corem decried some cloud mining companies as “ticking bombs”, making clear that he thinks the issues in the industry are far from over.

Vavilov, whose bitcoin mining company has raised $40m to date, positioned himself as the member of the group perhaps most willing to find solutions to the issue.

“I may be an optimist, but I see the opportunity,” he said.

Elsewhere, Bitmain’s Goto indicated that his company was exploring solutions that would help it provide a stable cloud mining product.

Cloud mining companies aim to allow consumers away to profit from bitcoin mining without the requirements of managing and operating the machines.

GAW Miners Q&A canceled

Perhaps most notably, a much-anticipated Q&A with GAW Miners CEO Josh Garza did not take place as expected.

The event, drummed up by bitcoin’s rabid Reddit supporters, had all the anticipation of a heavyweight bout. For example, on the morning of today’s event, two of the top four posts were dedicated to deriding Garza and the paycion project.

Previously, Garza had agreed to participate in a session to be moderated by a member of the bitcoin community that addressed the controversies surrounding his company’s proposed bitcoin competitor, paycoin.

The project recently became embroiled in scandal for actions related to the launch of paycoin, including the planned market support for the project. GAW Miners has notably launched a buyback program for the altcoin, which seeks to alleviate customer complaints.

GAWMiners was a sponsor of this year’s TNABC.

Startup stage packs surprises

Startup Stage, TNABC

If some main speakers were noticeably absent, day two of the startup stage saw the surprise appearance of some companies not advertised on the TNABC schedule.

This edition of the event featured distributed storage startup Stroj; bitcoin wallet Airbitz; blockchain rewards program Ribbit.me; decentralized prediction market Augur; Zimbabwe-based bitcoin ATM startup Crypto Counter; bitcoin wallet KrypotKit; and crypto 2.0 startup Tether.

The panel of judges, including Roszak, Liberty.me’s Andrew Filipowski, Pantera Capital’s Steve Waterhouse and developer Peter Todd, was sometimes difficult on the startups, asking them pointed questions about their security and market strategy.

One of the more well-received startups was Tether, which seeks to provide users a way to move fiat currencies on the bitcoin blockchain. However, it also showed the limits of decentralized technology in its current state, explaining that it still uses banks to account for fiat dollars.

“Fiat goes into a bank account, it’s audited and the number of tethers in circulation will be audited by the blockchain,” CEO Reeve Collins said.

Overall, the judges seemed split on the sum of the presentations, however.

Todd, a known security advocate, was less impressed, stating bluntly: “Some of this stuff didn’t convince me it would work.”

Roszak, however, was more positive, speaking in his remarks to the excitement that many still feel about the industry despite its recent struggles.

“Love the energy, innovating on the blockchain, we need a lot more of this,” Roszak said.

Images via Pete Rizzo for CoinDesk; TNABC

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