That is probably the scariest part about the current Bitcoin community. Many of the big names are simply "playing a role". We have no idea of their technical expertise, the viability of their software, their USD/Bitcoin reserves, how they plan to address disputes like this, or even whether they are skimming of the top.
That's really the weird part. This is a business that does money in, money out. They should be balancing the books and checking inventory every day.
It can take Amazon a while to realize a mistake because it takes time for somebody to go around the warehouse and count all the boxes to discover they're holding excess inventory. But how long does it take for Coinbase to compare the number in column A to the number in column B?
I actually work for a startup selling reconciliation software as a service to the financial industry, so it's something I'm learning about myself. Lack of it suggests Coinbase are a little bit clueless.
No way. Not on fin-co ops.
That's like a car tire store without a pressure guage in shop.
In fact it seems that most Fortune 500 companies, regardless of industry round things to the million. It's pretty easy to lose a few hundred thousand if you are doing that.
Bitcoin is great, but the exchanges still suck.
Is this a reference to MySQL, pre-InnoDB, not being ACID compliant? InnoDB's been around for a decade and has been the default database engine for years.
Many banks are powered by duct tape and loose Excel spreadsheets. That's why things like Basel exist.
Excel was over-used in many places, but was not used for day to day transactions and operations.
Yet again, bitcoin apologists inaccurately claim (lie) that banks are actually worse to excuse failings by "their" services.
No-one is an expert on every part of a bank's infrastructure -- its too big for that. But definitely, we had software requirements, as a matter of IT policy, that kept stuff like MongoDB out of production.
Does Coinbase have external auditors?
For this reason I switched to Bitstamp and the experience is night/day different. Bitstamp withdrawals/deposits have so far never taken more than 4 working days, sometimes 3, for me.
This is literally an economy of "shut up and take my money," but no one wants to play ball.
If I could post on yc and quickly get a response from my bank, I'd be a happy customer.
1. Let's suppose I employ an old gambit: process a large transaction through CoinBase, receive the coins and say "I never received them." I'm sure they have at least enough controls in place to avoid double-credit fraud.
As a coinbase customer and someone who manages a team and large complex distributed systems, this is an oversight I would not expect from an industry leader and makes me nervous to continue doing transactions with coinbase.
How can we be made comfortable that this won't happen again? $50 isn't the root cause fix and could have cost the OP $15,000 due to the delay. What if those BTC was going to be used to make a purchase? He is left holding the bag, leaving a sour taste.
I've had to deal with micropayment reconciliation for a minor handset mfgr (multiple currencies, payment processors, timezones, products, on and on). Sometimes the credit card processor up and changes the API without notice, and a whole slew of payments have to rerun. This is where fields in the local reconcilation db start to creep in and all sort of weird flags get made. What the heck is flag F? (IOTW, document the heck out of the db schema AND have lots^10 unit tests.)
Complaining about the complexities does not instill faith that you have a solid grasp on your product. Tell me you dont work at coinbase, please.
why, we do - a team who could quickly build a rails app and connect it to third party payment processor.)
There may not be a well-developed specialized regulatory system in place with authority over some bitcoin firms, but in most of the places that bitcoin firms operate there is a legal system in place, and entering into a sale contract, accepting payment, and then failing to deliver the product is the kind of thing that is well within the scope of competence of most of those legal systems.
PG's reply in the thread is very telling: https://news.ycombinator.com/item?id=5428372
Q: Does MongoDB support transactions?
A: MongoDB does not provide ACID transactions.
( http://docs.mongodb.org/manual/faq/fundamentals/#does-mongod... )
It is crazy to be doing financial stuff in a DB that doesn't provide transactions. It completely blows my mind that anybody would do this.
We know all financial companies use databases running on tandem or tuxedo. But that's not cool sounding. How are they supposed to get fun jobs doing nothing with catered lunches? HOW, HOW I ASK!
I've heard of somewhere like ADP using it but they are using it as an analytics database, not for actual payroll processing.
I feel bad for someone that can't put a finger on his 30K, but I can't feel that bad if he didn't do a little research here first.
Hopefully on the next bubble people will be a little more enlightened.
As PG wrote:
> Strictly speaking I should have killed the post entirely
Now, it's possible that other complaints on HN were nuked by PG or some other moderator, making it difficult for someone to find it.
As PG wrote:
> Strictly speaking I should have killed the post entirely
That's not why he said that. He explains further down thread:
HN is a news site, not a customer support forum for companies funded by YC, and in fact the site guidelines explicitly ask that it not be used that way
If you bothered to read the other thread, you'll see parallels to the current situation:
- transaction delays on the order of 1 week
- Coinbase is blaming technology (last time it was a database migration, this time server upgrades)
- Customer support has been silent (znowi described it as "information vacuum" https://news.ycombinator.com/item?id=5427985)
- Online account system called into question, users unaware of current positions (e.g. https://news.ycombinator.com/item?id=5428090)
If this were the first time, you can cut some slack if Coinbase responded appropriately and took steps to prevent this from happening in the future. Based on what played out recently, it's not clear if Coinbase actually learned anything from the previous issues.
And in the future, if you ever do decide to start a company and find yourself in a similar situation, I hope you would be a bit more communicative and proactive than Coinbase was in this case.
You said that the standard approach on HN is to silence criticism -- a stupefying statement, given that at the time you posted it, this conversation had maybe 100+ comments and had been on the front page for a while. Also, in that same comment, you linked to another voluminous thread criticizing Coinbase. Amazingly, the existence of your comment strongly mitigates against your thesis being true.
I think you must realize this at some level, as you have chosen to employ the age-old tactic of the inescapably wrong: quietly change subjects and hope nobody notices.
> Strictly speaking I should have killed the post entirely
And this was 9 months ago. We are left to assume that the policy was enforced (after all, if the post were killed, it wouldn't show up in a search).
And even in this thread: https://news.ycombinator.com/item?id=6931168
> I've been keeping my mouth shut here about Coinbase after starting that thread 9 months ago.
I wouldn't be surprised to hear others echo the same sentiment (concern about expressing grievances about Coinbase) especially after PG's responses in the original conversation.
Others in the original thread refuted the argument you are presenting, so I recommend you start https://news.ycombinator.com/item?id=5428757 before rehashing arguments that have already been addressed
Given that many defenders of coinbase, including PG, are seeing support requests as criticisms, (threads that criticize coinbase = threads that seem like support requests) in their heads.
Therefore, (pointing to the statement that HN is not a support forum) + (commenting that PG should have killed the thread) = (PG is likely to kill all threads that may seem like support requests) = (PG is likely to kill all threads that criticize coinbase)
Sounds like they need some people who have actual practical experience building financial systems.
You're not being hyperbolic at all. You're just used to the standard Hacker News "only haters expect businesses to be competent" type of handwaving response. But this thread is about money, that makes it different.
And which just ate $25MM in Series B.
Perhaps CoinBase (or a rogue employee) were doing some proprietary trading and screwed up badly?
Maybe they were trying to quietly recover their losses and weren't expecting a customer to cause a public outcry and force their hand?
1) stopped replying to support emails even though there was a clear issue
2) only addressed the issue when the victim decided to submit his issue to HN (and only after it sat on the front page for nearly an hour
3) blamed a server upgrade and offered $50 of BTC when the actual loss was well north of $12K
4) only made the customer whole after many HN comments pointing out that the offer was paltry compared to the loss (and that they may potentially be pocketing the difference)
I applaud them for resolving the issue in a way that the victim wanted: "deliver the coins at the exact market price that they are at the moment you are crediting the account". However, this and similar issues in the past have raised red flags that haven't be adequately addressed:
A) why did customer support go dark? I suspect the reaction would be different if they were more proactive
B) as mentioned in https://news.ycombinator.com/item?id=6930748 , why doesn't Coinbase have the infrastructure to detect these issues? This is really basic accounting, and if they can't get it right on a small scale why would anyone trust them with more money?
C) what steps were taken to prevent this from happening in the future? I imagine that there will be more server upgrades as Coinbase expands.
D) What is their future policy regarding similar issues? Based on their initial reaction, one should not expect much if any compensation.
E) Will it take an HN post in the future to get their attention?
And looking back at some of the comments in a conversation from 270 days ago (https://news.ycombinator.com/item?id=5427985) it seems that Coinbase hasn't actually learned from the previous issues.
I think joezydeco said it best: https://news.ycombinator.com/item?id=5427985
> You have a company trying to start up in a very tough space where you need to be super-reliable and super-transparent. Coinbase's actions this entire week were neither.
That part only happened after many people criticized the original response: (https://news.ycombinator.com/item?id=6930109)
> Edit: your bitcoin credit has now been processed. It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. We should have certainly caught it and responded sooner so that was our fault. My deepest apologies for the delay and trouble on that. We've credited $50 worth of bitcoin to your account for the trouble, as a small way of saying thank you for bearing with us.
This was understood to mean that Coinbase would honor the original price (868.91) and not the current price. The general impression was that Coinbase made the purchase at the current price (roughly 550) and is honoring the other price (868.91), which would mean that OP lost about (868.91-550)*40 = 12756.40 (and Coinbase would be pocketing the difference).
People correctly noted that Coinbase's move was entirely inappropriate, and they were forced to change course (note the "Edit2"):
> Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part.
The general policy with most financial firms is that firm errors should be resolved in a way that benefits the customer (so in this case, if BTC actually increased in price, Coinbase should honor the original trade price)
Rather than refunding the dollar value ($35,104.11) of the original, clearly botched transaction, you ended up giving him the 40 BTC at their current trading value (about $560), that is, for net a loss of $35,104 - $22,400 = $12,704?
And you think $50 plus a thank-you note(!) is enough to make him whole on this loss?
For now its swings are like the Zimbabwe dollar
Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. Current market price has been very far from that.
Bitcoin market right now is pretty much the definition of a bubble. Beware. In a "bubble" market, your money can disappear overnight.
But again: that's not Bitcoin's fault. It's the fault of idiots vastly and irrationally driving up market prices.
This is really a textbook lesson in why Wall Street does not represent the "real" exonomy.
The current cost of mining is a rough replacement cost of bitcoin (and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying), but since mining isn't inherently reversible its not an intrinsic value.
Modulo time preferences...
But yes, bitcoin's intrinsic value is that it is the only method to pay transaction fees to have work done on your behalf by the bitcoin network. I don't know how to price that, though.
It IS "value", because the resources used for mining have measurable value, and can be traded for things other than Bitcoins.
It may be an indirect measure of value, but it's still a measure of value.
It is value, but its not value of bitcoins. It is the value that would need to be sacrificied to replace the bitcoins by mining, but its not value that can be recovered from the bitcoins, so its not intrinsic value that supports the market value of bitcoin.
Intrinsic value, as the term is used for currency, is value that you can recover from a currency without trading it -- e.g., the use-value of gold for ornamentation or industrial uses is intrinsic value.
You can trade Bitcoins directly for more hardware to mine Bitcoins. So it IS a reversible transaction, and Bitcoins are DIRECTLY (not indirectly) valued at approximately the cost of mining and distribution.
Don't confuse "indirect value" with "indirect measurement of value". They are different things.
The value for which you can trade a currency is its extrinsic value. Insofar as "intrinsic value" is meaningful, it refers to the value you can derive from a thing without exchanging it with someone else.
> You can trade Bitcoins directly for more hardware to mine Bitcoins.
Yes, you can buy things with Bitcoins. That's the definition of a currency's extrinsic value.
> So it IS a reversible transaction
No, if mining was reversible, you could recover the resources expending in mining bitcoins without trading the bitcoin to someone else in the market, the way you can make industrial or ornamental use of gold in your possession without trading that gold to someone else for industrial tools or ornamentation.
> and Bitcoins are DIRECTLY (not indirectly) valued at approximately the cost of mining and distribution.
"Direct value" isn't a well-defined phrase, and isn't the one that was under discussion. Intrinsic value of currency is better defined, and is what was being discussed, and bitcoin doesn't have any of that traceable to its mining cost.
The "value" here isn't "indirect". Only the method of measurement.
This is economics, not quantum physics. The method of measurement (as long as it is rational and consistent) does not change the value being measured.
So what? That is about the farthest thing from a valid analogy I've seen in a long time.
The difference between it and Bitcoin here is that no one is claiming that automotive exhaust has intrinsic worth due to the resources expended to produce it.
The VALUE is not indirect (i.e., extrinsic). The METHOD OF MEASUREMENT is indirect. Those are two different things. One does not imply the other.
If I measure the "worth" of your automobile in units of "old Chrysler convertibles", that doesn't mean your automobile has any more or less economic value than if I measure it in helium balloons. The method of measurement (if it's done properly) does not affect the actual value.
In the case of Bitcoin, it CAN be traded directly for goods, not dollars. There is nothing REAL distinguishing it from any other commodity, such as rice. The value is roughly equivalent to the cost of production + distribution.
I take that back. There IS one difference, but (at this time) it is minor: that is the ultimately limited supply, but that isn't even remotely close enough yet to affect a RATIONAL market.
An EXTRINSIC value, on the other hand, and to use Wikipedia's example, is like the "value" of a song played on a guitar. It has its own subjective and economic values, but that is completely separate from the cost of manufacturing the guitar. This is NOT even remotely the same situation as Bitcoin.
Here some cases where coinbase uses the original price even after a price increase:
http://www.reddit.com/r/Bitcoin/comments/1qlvgj/psa_rest_eas...
http://www.reddit.com/r/Bitcoin/comments/1qlvgj/psa_rest_eas...
http://www.reddit.com/r/Bitcoin/comments/1cxmuf/bought_5_btc...
And in this current case, coinbase used the new price even though the price decreased. So whether the price increases or decreases, coinbase is taking a loss and gives the money to the consumers.
Look for an increase in this kind of whinging in the very near future, and it won't be fun for anyone.
Kudos to Brian and team for getting on top of this and solving the problem quickly. They executed the order as originally promised, admitted their mistake, and gave him a credit for the inconvenience.
I've executed many transactions with Coinbase and although one of my transactions was delayed briefly, I've been very pleased overall with the service.
They are go much farther than most other Bitcoin exchanges and services, which barely have any support channels and have frequently stolen user money entirely.
With that much spread and at prices as high and fluctuating as much as they currently are you cannot expect to take 10 DAYS for a transaction of this nature.
Honestly, looking at this from the outside what is the difference between this an actual larceny? A large purchase comes in while the commodity is priced high, the commodity is not purchased but instead funds are held on to while the price drops and then the bitcoins are purchased at the lower price and the company pockets the difference...
Not even saying that foul play truly happened, but instead saying you cant run a business whos actions LOOK indistinguishable from foul play and expect to stay in business...
If you're in a business where you can tell customers i lost 30% of the value of your transaction due to a mistake on our end its eventually going to turn into a scam, even if that wasn't the initial intention... its just too much temptation
This is not good for coinbase, even if it was an accident.
I agree this is not good for Coinbase, but I am also far less surprised or indignant than many posters here seem to be. This is what the early stages of most markets look like, with fuck-ups and manipulation galore. Read a book on the history of the NYSE (and later, Amex, which was called the "Over the curb" market because it consisted literally of people shouting orders at each other on a street corner in NYC) - this is far milder than the stuff that went on then. At least Coinbase seems to be exhibiting incompetence rather than the naked greed and malice that characterizes many other nascent markets.
If an exchange gives users an SLA stating "orders will be fulfilled within X business hours" then that's a contract between two parties. If the exchange says "yeah, we'll get around to it someday and you agree to deal with that" which is the usual intent language in the small print then you don't have much to go on if there is a delay, other than trying to raise a public outcry in the hopes they will back down.
edit:grammer
My theory? Proprietary trading. The CoinBase guys were probably trading on behalf of the company and screwed up royally, taking a big hit, so they decided to try and pass that loss onto customers or until they balanced the books
They should simply wire back the money to end this matter and blame a back-end gremlin.
As a gesture of goodwill, maybe comp the guy $100 credit, cash, starbucks gift cards, whatever.
They've actually made it worse now by executing the trade but only after a public outcry.
The whole point is that 'comparatively small' players shouldn't be allowed to take up insane amounts of volatility; if you accept consumer's money then it would be reasonable to require to put that $25mm as a bond to pay out your debts, and put a ceiling on how much deal volume you're allowed to hold if you've got only tiny amounts such as $25mm.
I'm an avid user and big fan. I've tried a lot of alternative products, and none compares to Coinbase in terms of reliability and overall experience.
Sure, they screwed up. Brian owned up to that and fixed the issue quickly.
I just think some of the anger at the market swing is being wrongly directed at Coinbase.
You keep mentioning market swing. Market swing is relevant if OP had the bitcoins in his control which clearly was not. So while the market swung, he lost money not because he was sitting on his ass but because he could not do anything about it to minimize a loss. See the difference ?
You clearly have some agenda for saying things you say. Noone is that stupid.
Again, not saying that this is not a major screw up.
I just think Brian and crew deserve more support than they are getting.
Not only that, but I was told that my coins could not be released earlier because "they needed to be removed from cold storage". So now we have 2 different excuses for failures in the same time period. The cold storage excuse seemed completely bogus to me too because we're talking about crediting a number to my account, not getting actual Bitcoins. They don't become Bitcoins till I send them out of Coinbase.
BTW in equities trading I believe this kind of botched transaction would be treaated as a "Failed to Deliver" (FTD), and that's exactly how these things are handled.
They made a promise to deliver bitcoins at a certain price and on a certain date. The original poster's issue is equivalent to Amazon promising 2 day shipping but the book came a few days late.
Unfortunately, for the amounts involved its borderline not worth pursuing. It's too large an amount for most small claims courts, and too small an amount to justify the time and cost of civil litigation (unless it settles at the very early stages). Indeed, based on Coinbase's record (refunding purchases if BC prices increase rather than executing the transaction), it's very likely that they are factoring this arbitrage into their business model.
The value of BTC lies predominantly in the market value.
So the book analogy is ridiculous and patronizing.
As I mentioned in a few other comments, just seems to me that frustration over the Coinbase's error and frustration over the price swing are both being heaped only on Coinbase.
I've had great experiences with the product and company, I would hate for this particular screw-up to be seen as representative of their overall service.
You don't need to be called an exchange or sell currencies in order to be financially liable for delays; and the more perishable/volatile the product is, the larger the possible liabilities.
> Thank you for contacting Coinbase Support! Unfortunately, we are experiencing a tremendous volume of support requests, and have not been able to answer your ticket in a reasonable amount of time.
It goes on to tell me my issue is closed and I can reopen it.
Add to that the fact that their fucking site LIES TO YOU about how you can withdraw 100 bitcoins per day, and then surprises you with how you can't actually withdraw any until you get verified first.
I agree... but being a market maker is one of those things that requires some reserves, and especially the early exchanges? when bitcoin was under a buck, I can totally see getting together with a couple friends and putting $20-$30K in the reserve pot and giving it a go. But with bitcoin appreciating 1000x? yeah, uh, that got serious fast. Thirty grand is no longer anywhere near a reasonable amount of operational reserves
I sent you an XSS vulnerability to [email protected] according to https://coinbase.com/whitehat almost 3 weeks ago and haven't received so much as a confirmation "thanks we are looking into it" email from you guys.
- This was a relatively minor XSS vulnerability which required a bit of social engineering to pull off, rather than being a traditional XSS that most HN readers would need to worry about.
- Their delayed response was likely due to the relative minor nature of this vulnerability.
- I still feel safe using Coinbase
- They're taking care of it and treating me well :)
What they probably should have done is just reversed the transaction entirely, but if I was deciding this, barring some agreement on delivery time, Coinbase would be mostly blameless.
The reason for this is, they failed to deliver, that is not under debate. But they are assuming that someone who was long on BTC as a speculator, is still long on BTC.
In the latest edit Brian from coinbase mentioned that they are now honoring today's rate, which is a step in the right direction, and has subsequently save the OP substantial losses, but this does not absolve them of the original screw-up.
I doubt the OP will complain. If I were in his shoes I would personally request a complete reversal even if I wanted to buy at today's prices, and manually make a new request.
Any seasoned/experienced business would do this.
Example: If amazon fails to deliver/the shipped item is lost in transit, they reverse the credit card transaction and request you to re-order if you still want to purchase.
This sort of settlement process is a scary thing to throw very much money at.
So he should get $35K worth of BTC at todays price (~60 or so BTC)
He suffered a $12k loss because of price fluctuations most likely tied to People's Bank of China news, not because of Coinbase's error. There are no grounds for a lawsuit here.
It does not even have to be reported.
I have nothing against you or Coinbase and I do sincerely hope I am wrong. This can have dire consequences on your current and future business(es).
It would have been best to refund the withdrawal in its entirety or just credited it, to be used for a future transaction as that would have saved you guys from a world of pain.
For any other service I would have given you Kudos for acting, albeit slowly, and applauded honesty(though not so much due to blaming it on the servers, which in a financial context is unacceptable).
But for a business that a court can deem/classify as a financial institution (regardless if you consider yourself one), this could be considered as a admittance of wrong doing.
edit: grammar
I am purposely not saying 'if'. Because there is no possibility of this not being brought to a judge on the behest of SEC themselves or a consumer complaint.
In layman terms:
(1)they buy and sell BTC on behalf of clients and charge the client for the transaction including their fees.
(2)they are an online payment processor of sorts.
They will need to follow more regulations than Paypal, as paypal is also a digital wallet of sorts, but while it provides a conversion, they technically do not trade(buy/sell currencies) on behalf of clients.
Here's the definition of a security [Securities Act of 1933, Section 2(a)(1)]: The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
1. How many other customers were affected by the server upgrade?
2. Why was this not caught at the time or after?
The customer response bug
1. What steps are you taking to correct the issue it took a front-page HN story to get traction?
2. Will you commit to writing a post-mortem blog post?
If you don't learn from your mistakes, then you are deeply doomed. I don't want you to be doomed :)
The OP thought it was worth it then, and bought them then.
This is a pretty close to being a classic contract law case, except with bitcoins rather than tangible goods. If this goes to trial, the outcome is not likely to be favorable to Coinbase.
Only if Coinbase can prove to the public that they are consistent on matters like this would your assertion be correct. But if Coinbase were inconsistently applying their policies... they can make a very pretty penny on scamming their customers.
Transaction Delays are a serious problem.
Now, according to the edit, Coinbase did the right thing here and are eating the loss. So Coinbase is doing a good job at damage control...
Why does it take a public shaming for you to do your job?
"To not expect some errors from a startup with an emerging technology is just silly. Users should expect some errors, and expect fixes to those errors by Coinbase as properly happened in this case."
Huh?
A startup dealing in financial instruments doesn't just get to say "Startup!" "1.0!" "Beta!" or "MVP!" and wash its hands of responsibility.
If I do $10,000 worth of damage to your car due to my (in-)action, and throw $50 at you "by way of apologizing", your losses are somehow mitigated?
My statement was that any users of a startup should understand that there are risks that come with using any new service/technology/etc. That's not to absolve a new company of their responsibility, it's just prudent business sense from a user perspective.
I just think that too much blame is being put on Coinbase. There is anger at the delay mixed with anger from the price swing, and too much is being directed at Coinbase.
Now, care to take a guess at whether I'll ever be a customer?
I started my career as a "customer service superhero" at ZeroCater and was the only employee for a while. There was a staggering amount of work to be done at times, most of it non-customer service related. I'd never leave without making sure every customer email was addressed - and this was a much more trivial issue (lunches). This is not just human decency, but its good business practice. I wanted to speculate (yeah it's speculation :P) on bitcoin using your service, but no longer will, and will no longer refer your service to others (unless something changes, of course). It is not a question of ethics, but a question of me making a good decision - why would I trust my money with a business that doesn't feel the need to address customers on time (especially those who trust them with significant sums of money)
This issue would have cost you a maximum of 2 hours of free time/sleep to fix - now its costing you a customer (I'm sure the cost is actually far greater, judging by the exposure of this thread). Was it worth it?
Is this an actual policy of Coinbase, or restricted to times when you get bad press?
Because when I saw this post I could swear that it was about me. I gave you $467 about 24 hours after the OP for 0.5 BTC, with the promise that I would have the coins 5 days later (when they were still worth $450 or so). See this screenshot from earlier today
Since I took that screenshot 8 hours ago, the coins have been credited to my account (finally) and are worth about half what I paid for them.
Now my problem was a couple orders of magnitude smaller than that of the OP here, which is why it hasn't been worth my time to send a lot of emails about it or post on HN (and the market looked OK until 24 hours ago). I had chalked it up to the risk of performing financial transactions in an unregulated marketplace.
But I feel compelled to provide another example given your assertion that this only occurred with a 'handful' of orders.
Coinbase US understaffed, running fast and loose, and can't handle the spike in attention. This proves bitcoin isn't ready. Coinbase has a long road ahead of it.
Sloppiness like this wouldn't fly in actual finance. It would get you fined and possibly more. Lacking any sort of internal controls, even something as simple as balancing your books and verifying all transactions... It's shocking and negligent. Even more so for a YC company. Shame on you.
Oh? Did that also cause some kind of downtime in your customer service operations, considering you sure took your sweet time in getting back to him? Funny how the front page of Hacker News makes things run a bit smoother, huh?
I am certain that the Coinbase TOS allow significant discretion as to the timing and cancellation of orders. However, systematically delaying orders and then cancelling or forcing people to buy based upon which will be most profitable for Coinbase, which seems to be occurring, could certainly be construed as fraud.
What is coinbase doing to prevent this from happening in the future? Both from a customer service perspective, and from a technical one. I want to assume good faith, but I'd also like to verify before doing business with you.
Having a customer service that actually responds to issues meaningfully would be a first step, but that's only the beginning.
There's a technological solution to this. If you know that for whatever reason some transactions might never complete on your end, one of several obvious solutions would be to introduce a timeout after which the transaction is rolled back automatically. That means introducing a batch process to at least trigger a manual review of these cases, and possibly even an automated cancellation with repayment. Doing that within a business day of receiving the money wouldn't be out of order, maybe even make it an hour or so (this is supposed to be a fast medium, right?)
You got a +1 here.
-1 for the cavalier, "looks like were were performing server upgrades last week..." That is a startup excuse. I'd love to hear Chase Bank use this excuse and see how that flies with banking regulators.
We should have things squared away for you by end of day.
Edit: your bitcoin credit has now been processed. It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. We should have certainly caught it and responded sooner so that was our fault. My deepest apologies for the delay and trouble on that. We've credited $50 worth of bitcoin to your account for the trouble, as a small way of saying thank you for bearing with us.
Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part. Sorry again for the trouble!