The discussion centers on proving that the equation a•b=(a+b)^2 lacks an identity element for real numbers. An identity element, I, would satisfy the condition a•I= I•a= a for all a. Participants argue that to demonstrate this, one must show that no real number I exists such that (a+I)^2 equals a for every a. The conclusion drawn is that such an identity cannot be established within the realm of real numbers. Thus, the equation does not possess an identity element.