Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Coinbase down for maintenance

coinbase.com

Post reply on HN
Print view View original

211–220 of 252 posts

Re: Coinbase down for maintenance

#211

Post by tome »

heartbreak wrote: post #207
Beejeepa wrote: post #191

Earlier quoted context omitted.

Bank runs are bad when there isn't a full reserve. Coinbase should carry a full reserve. Fractional reserve banking is a prisoner's dilemma, we all marginally benefit from the status quo of credit/debit/interest, but in a crisis, the first people to pull out win, and everyone else loses.

Coinbase isn’t a bank it’s an exchange. Why would they carry a reserve of anything? It stores your shares for you, but it’s not loaning them out. The only way you get money out of Coinbase is if someone buys your shares.

They presumably have on hand the full amount of cash and Bitcoins that their participants have given them and don't loan any of them out. That means they have a full reserve.

Re: Coinbase down for maintenance

#212

Post by ewjordan »

nawitus wrote: post #145
wonderwonder wrote: post #124

Just my opinion but I think the conspiracy theories are not realistic. Coinbase is essentially a startup that is dealing with monstrous traffic. They are still scaling their infrastructure and when the price starts moving quickly everyone logs in to either get in on the action or take a look. This cranks the traffic up and the servers cant handle it. I am not excusing their behavior as they need to be able to handle…

> They are still scaling their infrastructure and when the price starts moving quickly everyone logs in to either get in on the action or take a look. Are they not using cloud, which should enable easy scaling? Or is their architecture not designed for good scaling?

No architecture scales infinitely, you merely shift at each step what the next bottleneck will be. Even with small scale sites you'll see this: first, you need to move from everything on one server to a load balancer plus app servers talking to a single database. Then you need to share your database. Then you need to move to multiple load balancers. Then so on and so forth, depending on the specifics of your service, mixed in with various rounds of local optimization at the application level that buy you just a little more time before having to ship another architectural change.

Most distributed systems don't really scale ass you add nodes beyond a factor of 10 to 100. If they did, you wouldn't need to hire super expensive people to handle those systems.

Re: Coinbase down for maintenance

#213

Post by thedragonslayer »

Beejeepa wrote: post #192
ceejayoz wrote: post #144

Earlier quoted context omitted.

A run on one bank frequently has knock-on effects on other banks.

Bank runs are bad when there isn't a full reserve. Coinbase says it has 100% reserves. Bank runs are how fraudulent exchanges are caught: Bitcoin is self-auditing, and either you have it or you don't, there aren't IOUs or paper receipts. Fractional reserve banking is a prisoner's dilemma, we all marginally benefit from the status quo of credit/debit/interest, but in a crisis, the first people to pull out win, and eve…

What if Coinbase is the one buying large amounts of bitcoin? Then using reserves so they can buy/sell on both sides. See where it gets risky?

Re: Coinbase down for maintenance

#214

Post by yueq »

pcf wrote: post #163

My friend thinks the exchanges also go down when assets "flash-crash", because it means normal users can get in to sell their assets. And when they can't get in, they also can't cancel their stop-loss orders, so it means a TON of assets are available to buy cheaply (by the exchange and/or certain VIP users/collaborators) as the value goes down. Then these are bought up, and the price quickly increases again, before t…

why would they cancel the stop orders when the sole purpose for stop order is to protect profit?

Re: Coinbase down for maintenance

#216

Post by sctb »

igorgue wrote: post #182
tome wrote: post #160

Earlier quoted context omitted.

Right, "only 8%" is rather a lot.

You guys really don't have experience in the space huh? Bunch of douchebags in this forums that like to talk like they know what they're saying :D

Please read the guidelines and then start commenting civilly and substantively. We ban accounts that won't.

https://news.ycombinator.com/newsguidelines.html

Re: Coinbase down for maintenance

#217

Post by viraptor »

gist wrote: post #195
viraptor wrote: post #151

Earlier quoted context omitted.

You can't easily pull a scam like that using credit cards. Wire transfers could be potentially easier as we know the union transfers are hard to revert (but there's work being done there as well). Essentially, if you interact with banks and have too many chargebacks or complaints, you'll be dropped. Or your fees will get massive. And that's if you find a payment processor who's happy with you taking money for cryptoc…

True but if you are running a ponzi and you have enough money coming in then you can handle redemptions if you need to.

It's not about refunding the customers though. It's the payment gateway that will drop your as a customer. Neither them nor Visa/MasterCard want anyone running scams via them.

Re: Coinbase down for maintenance

#218

Post by pertsix »

Florin_Andrei wrote: post #158
wonderwonder wrote: post #124

Just my opinion but I think the conspiracy theories are not realistic. Coinbase is essentially a startup that is dealing with monstrous traffic. They are still scaling their infrastructure and when the price starts moving quickly everyone logs in to either get in on the action or take a look. This cranks the traffic up and the servers cant handle it. I am not excusing their behavior as they need to be able to handle…

I've used Coinbase on and off for a while. The service always felt exactly as you describe it: startup busting their collective ass to keep up with demand. Given the recent increase in news about cryptocurrency I've expected "technical difficulties" with Coinbase. Heck, most mining pools are sweating bullets right now. Hypergrowth = hyperpains.

missed opportunity to say:

hypergains = hyperpains

Re: Coinbase down for maintenance

#219

Post by freen »

tome wrote: post #211
heartbreak wrote: post #207

Earlier quoted context omitted.

Coinbase isn’t a bank it’s an exchange. Why would they carry a reserve of anything? It stores your shares for you, but it’s not loaning them out. The only way you get money out of Coinbase is if someone buys your shares.

They presumably have on hand the full amount of cash and Bitcoins that their participants have given them and don't loan any of them out. That means they have a full reserve.

You aren't buying the bitcoin from Coinbase...

Re: Coinbase down for maintenance

#220

Post by netsharc »

viraptor wrote: post #217
gist wrote: post #195

Earlier quoted context omitted.

True but if you are running a ponzi and you have enough money coming in then you can handle redemptions if you need to.

It's not about refunding the customers though. It's the payment gateway that will drop your as a customer. Neither them nor Visa/MasterCard want anyone running scams via them.

If I were running a scam, I'm pretty sure at the moment I would have a positive cash flow: a lot of people are transferring their USD/EUR into my bank account because they want to get on the Bitcoin train. If a few people are cashing out, I'm pretty sure I would be able to manage to give them their payouts. Exchanges also have a withdrawal limit of a few K's per day, in my ponzi scheme if someone wanted to withdraw 100K it would take maybe 10 days, and one hopes there are enough new suckers that each day I'm able to pay out, out of my official bank account, my slush fund. The rest of the money can be transferred out where no one can touch them...

And when the whole thing blows up, I disappear. My payment gateway will drop me, but what do I care?

Post reply on HN