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)