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Coinbase says buying and selling temporarily disabled amid price rout

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Re: Coinbase says buying and selling temporarily disabled amid price rout

#81

Post by Klathmon »

dopamean wrote: post #2

> "Investigating - All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience," Coinbase said on its status website at 11:11 a.m., ET. What exactly is broken that needs to be fixed? Is there just a ton of trading volume and their system cant keep up ? Edit: I ask because the headline just says that prices are falling quickly and so Coinbase halted trading. This soun…

I have heard that since coinbase keeps all but 2% of their crypto assets in "cold storage" (offline storage that requires a physical trip to somewhere to spend), there are semi-frequent times where their "hot wallet" runs out of money, and they need to go and retrieve it from cold storage in order to continue.

Naturally this would happen when there are large spikes in usage (which happen during swings in price) and people are trying to move cryptocurrencies out of coinbase.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#82

Post by ceejayoz »

AndrewUnmuted wrote: post #73
ceejayoz wrote: post #58

Earlier quoted context omitted.

It's pretty terrible advice to tell non-technical users to manage their own wallet. Keeping it secure is a non-trivial (understatement!) task.

What kind of non-technical person is trying to buy and manage a bitcoin wallet in the first place? If the user is only willing to learn enough to keep the coins in Coinbase, then this person has no business dealing with Bitcoin at all.

> What kind of non-technical person is trying to buy and manage a bitcoin wallet in the first place?

I've had half a dozen non-technical friends ask me about getting into Bitcoin in the last month or so. Media attention, get-rich-quick, scams, etc. are all attracting hordes of people, to the point where the Coinbase app was #1 on the App Store for a while.

Even the people running exchanges are getting hacked. What chance does a normal user have?

Re: Coinbase says buying and selling temporarily disabled amid price rout

#83

Post by amenghra »

blhack wrote: post #17
wu-ikkyu wrote: post #9

Earlier quoted context omitted.

What advantages are there to storing BTC on Coinbase vs. your own wallet

A few days ago it felt so much easier to answer this question, haha. Coinbase puts a lot of work and effort into their security models. Storing coins yourself means that you now have to: 1) Physically secure your private key 2) Secure the machine that you use to interact with that private key 3) Ensure that that private key was generated in a secure way 4) Ensure that the ways that you interact with that private key…

If you have small amounts of crypto currency and want a secure machine and don’t want to buy a hardware wallet:

You can take your old phone or tablet, apply any available upgrades, factory reset it, use it only for crypto currency stuff.

Our mobile operating sysmtems are pretty secure (in the grand scheme of things)

Re: Coinbase says buying and selling temporarily disabled amid price rout

#85

Post by AndrewUnmuted »

matt4077 wrote: post #53
AndrewUnmuted wrote: post #48

Earlier quoted context omitted.

But why were you ever telling people to store anything on coinbase? That is downright terrible advice to be giving anyone. One of Bitcoin's selling points is that it's decentralized. By keeping coins in a cloud operated wallet that you don't fully control, you're willfully giving up control over your own wealth, and needlessly putting your coins at risk.

You're comparing coinbase to an idealised version of a private wallet–which doesn't exist. In reality, a lot of money was probably lost to hard drive failures and other human errors. We just never read about it in the news, because each individual case is too small to warrant news coverage.

There are several reputable apps for both iOS and Android that provide secure, easy to use wallets, which do not centralize the storage of a user's coins whatsoever.

I've told friends for years about Bread[0], a wallet app for both smartphone platforms that I've used before with great success.

[0] https://breadapp.com/

Re: Coinbase says buying and selling temporarily disabled amid price rout

#86

Post by Blackthorn »

thisisit wrote: post #64
blhack wrote: post #3

There is something that feels extremely fishy to me about what has happened at coinbase over the last few days. For years I've told people to just store their coins on coinbase. I've been a big fan of their "vaults", and I've been saying that they are the shining beacon of legitimacy in this whole thing. I honestly don't know that I still agree with that. This whole rollout of BCH has made me honestly start questioni…

I posted my comment before I read this. So repeating from here: https://news.ycombinator.com/item?id=15988939 It seems Coinbase's go to strategy every time markets are volatile. In case people are wondering why is this a recurring problem - this simply perils of Market Making in a volatile market. As a market maker for customer orders Coinbase needs to fulfill both sides. So to make money they buy from customers at l…

Coinbase is market making the exchange they run, seriously? That's one hell of a conflict of interest.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#87

Post by makomk »

dahdum wrote: post #66
chollida1 wrote: post #8

Coinbase does a number of things that seem strange from a market perspective. There doesn't appear to be an auction to open/close or restart. Instead they seem to lock their markets and allow post only orders. The other things this screams is that 1) stop loss orders are useless in volatile markets. I've harped on this alot from the US Cash Equities side but it appears to be equally valid. YOu'll only end up getting…

They lock, other than scaling issues, because of liquidity. Bitcoin cash opened with a thin market and ran up to $9,500 in 4 minutes before they halted the market. Was still trading at ~$3k elsewhere at the time. An open/close or restart isn't needed because all assets are being heavily traded elsewhere. If they switch to post only the arb bots will fill their book over time. Leverage will rip your face off.

The Bitcoin Cash fiasco is a good demonstration why their approach to opening markets doesn't work - if the correct market price at open is different from the initial price people start placing orders around, no-one can place orders on one side of the book for anywhere near market price, which means there isn't enough liquidity at open, which causes chaos. Apparently they've given up on opening the BCH-EUR and BCH-BTC markets altogether until January after this looked like it was going to happen again with those.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#88

Post by ceejayoz »

slg wrote: post #56
frgtpsswrdlame wrote: post #12

Earlier quoted context omitted.

You think it's fishy and you have no way to know if something is going on behind the curtain at coinbase but you don't want regulation? Regulation is what lets you peek behind the curtain and know that Coinbase is or isn't doing something fishy.

I can't help find it funny as the libertarian cryptocurrency fans slowly realize why we have all these dang laws. There are plenty of financial regulations that could use updates or tweaks, but an overwhelming majority are put in place to protect people and try to ensure transactions are as fair as possible. Cryptocurrencies too often throw the baby out with the bathwater.

Yup. The last few years has basically been a real-time history lesson on how the modern financial and regulatory systems came to be. Must be fairly fascinating for economists and historians.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#89

Post by cma »

matwood wrote: post #84

Regular markets have circuit breakers [1] that stop trading for a period of time. Coinbase should just define and implement these to let their systems catch up. [1] https://en.wikipedia.org/wiki/Trading_curb

Coinbase is unintentionally the circuitbreaker. It crashes every time there is a lot of volatility.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#90

Post by qeternity »

thisisit wrote: post #27

It seems Coinbase's go to strategy every time markets are volatile. In case people are wondering why is this a recurring problem - this simply perils of Market Making in a volatile market. As a market maker for customer orders Coinbase needs to fulfill both sides. So to make money they buy from customers at low price and sell back at a high price. So they are collecting spread between bid and ask to make money. But w…

Coinbase are not market makers...
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