For bitcoin industry veteran Tom Kysar, the ongoing debate over how the bitcoin network should resolve key technical concerns has, quite literally, hit home.

The former head of marketing for the now-defunct startup Koinify, Kysar lives with two bitcoin evangelists, both of whom he says are on opposite sides of a debate that has so far raged on blogs, forums and through headlines in The New York Times.

“I think it’s confusing the shit out of a lot of people. The house is split. [One] supports Bitcoin Classic and [the other] … he’s with the Bitcoin Core guys,” Kysar told CoinDesk at The North American Bitcoin Conference (TNABC). “I think there’s a big problem with communication with people who aren’t involved in the conversation.”

Kysar is referring to a growing rift in the bitcoin ecosystem following former Bitcoin Core developer Mike Hearn’s decision to depart the project, declaring it dead due to what he perceived as unresolvable governance issues.

Since Hearn’s departure, many bitcoin miners, who process transactions on the open-source blockchain, and industry businesses have announced their intent to back Bitcoin Classic, a proposal that would increase bitcoin’s block size to 2MB, up from 1MB today.

At issue, is that this group has put forth the decision despite a recommendation from Bitcoin Core, the community’s largely volunteer development team that has backed alternate measures for handling the fix.

To Wayne Vaughan, founder of blockchain recordkeeping startup Tierion, the friction between business interests and developers is understandable. Project developers, he reasons, haven’t prioritized marketing, and as a result, are faced with the prospect that a competing team may offer a resolution.

Vaughan, however, isn’t worried about the bitcoin network, though he believes the process of selecting a scaling solution will continue to be divisive.

Vaughan told CoinDesk:

“I don’t know if the process has to be diplomatic and healthy. The [proposals] can compete against each other, but there will be a winner. Coming to consensus doesn’t mean everyone is happy and someone compromises, it just means that the market moves forward with that solution. I think that will happen.”

Given the high-profile nature of the debate, it was addressed during a number of talks and panels, most of which were aimed at highlighting and informing the audience about the still developing discussion.

Mixed response

At TNABC Miami, the first major conference on the industry calendar, many startup executives remain convinced that the same process that has led to negative media exposure and a drop in investor confidence is what will enable bitcoin to persevere.

Many spoke to what they termed the positive qualities of bitcoin and its value propositions, including its decentralized architecture and governance, though they noted it was clear emotions are high and short-term sentiment diverse.

Matt Carson, of Avalon mining equipment distributor Block C, acknowledges there’s a sense of unease in the industry due to what he termed “infighting”.

One concern, according to Carson, is that there is agreement that the block size limit, the rule in the code base that caps blocks on the bitcoin blockchain at 1MB in data, is arbitrary, having been enacted by bitcoin creator Satoshi Nakamoto with the implication it would be adjusted later.

“It’s disturbing that people who have the same end goal cannot seem to compromise on what is to me a very basic issue,” Carson said. “If we were raising the number of coins or changing the block confirmation time it might be understandable.”

He further suggested he believes the issue has at least encouraged industry businesses and developers to begin engaging in dialogue, even if this process has been messy.

“If we can get a solution, that will show how resilient bitcoin is. If we can have this level of people at each other’s throats and go on with business, then obviously Satoshi did something right,” he remarked.

Governance issue

Mixed with overall optimism, though, was a palpable feeling that bitcoin’s current crisis was one not caused by technology, but by people and governance problems.

Brennan Byrne, CEO of security startup Clef, voiced the common view that the problem at hand is unique in bitcoin’s history, but not fundamentally an issue of technology.

“Blockchain tech is going to be awesome and change the world. But, bitcoin is now trying to figure out governance. Up to this point, everything has been coherent. Let’s figure out what we want and the developers will make it for us and now there’s a disagreement,” he told CoinDesk, adding:

”There’s no real way to arbitrate. There’s no authority to arbitrate and say that’s the end.”

But Byrne is convinced a solution will happen, even if the “right answer” isn’t immediately clear.

Should Bitcoin Classic become the preferred solution, Byrne suggested that miners and businesses could be in the driver’s seat on more decisions. On the other hand, he noted, the market could decide to follow the roadmap proposed by developers, leaving processes unchanged.

“The block size debate is not as a big as the fact that we have to figure out how to arbitrate a disagreement,” he continued. “I think we’ll figure out a process and once that’s figured out, we’ll get it resolved and we’ll move forward.”

Will O’Brien, a partner at VC firm Blockchain Capital, agreed with Byrne’s take that the long-term potential of the network remains unchanged.

“What’s been lacking is governance and we’re going through an evolution in that governance right now,” he said. “I believe it is being sorted and that the right people are looking at it.”

Business impact

Still, Carson conceded that there is merit to the efforts by the Bitcoin Classic team, given that there is the possibility continued debate may push enterprise businesses to consider private blockchain solutions as opposed to the bitcoin blockchain.

Such a view was seconded by Shone Anstey, president of blockchain analytics startup BlockChainGroup, who said time was running out for discussions.

“I think we need to just go for the fork,” Anstey said. “If you continue to waffle for another six months, you’re going to put more uncertainty into the industry. Outside people are looking in and are like ‘What’s going on?’, they’ve been talking about it for nine months.”

As for the premise that bitcoin was at risk in an increasingly crowded marketplace, Henry Brade, CEO of Finland-based bitcoin firm Prasos Oy, was less convinced of any immediate or long-term risk.

Echoing statements made during the day’s mining panel, he said that he believes bitcoin will remain competitive, even in the face of private blockchain solutions, given that its distributed mining process provides a higher level of security than these technologies can achieve.

Brade said that while distributed ledger networks could be very useful for banks, but that these groups may eventually want the security that comes from bitcoin’s machine-intensive mining process.

“The private blockchain projects might fail because of a lack of security and they might want to tie other blockchains to bitcoin to tap into bitcoin’s security,” he said.

Building the bridge

Bitcoin Foundation executive director Bruce Fenton went so far as to change the topic of his address from Wall Street’s growing embrace of “blockchain” to the block size debate due to what he called confusion on the issue.

Though the foundation is oft-criticized and has had its recent own battles in the media, Fenton presented an understandable and empathetic talk on the issue, noting that he believes the debate to be an important industry first.

“Satoshi envisioned decisions being voted on by users. What he may have not been envisioned is that where users are now represented by miners and there are heavy influences from CEOs that have received a lot of venture funding,” he said.

Fenton also put forth the idea that, even if the industry amicably decides on a proposal, the impact of pitting industry businesses against developers in a bid for public support would perhaps not be a process without implications.

“The criticism of the miners and CEOs is that the Bitcoin Core developers have not been responsible for the needs of the industry,” he stated.

Fenton went on to liken the rejection of Bitcoin Core’s proposal for an effective if not actual block size increase as akin to a bridge building company rejecting the recommendations of its engineering team.

“This is very much a human problem, internally and externally,” he said.

But he believes the community would be better for having gone through the process, no matter how difficult or damaging.

Fenton concluded:

“There’s a perception this is an argument with no end in sight, that’s not the case.”

Images via Pete Rizzo for CoinDesk; Josh Dykgraaf for TNABC