Coinbase outages
coinbase.comI was shocked the other day on the Ethereum PoS announcement by the energy consumption per transaction metrics. It threw the whole crypto market into a new light for me. BTC is using over a megawatt hour PER transaction! That's almost 5000 miles in a Tesla model 3. BTC is using about 2/3 of the power of every data center on the planet! Many, many people have been imprisoned or executed for creating less societal harm and externality than Bitcoin. Satoshi Nakamoto may end up being the most destructive person to have ever lived.
People are free to gamble, but could they please not turn the surface of the Earth into a black body radiator while they're at it?
Satoshi is a supervillain who created the most effective weapon of mass destruction the world has ever seen. Unstoppable and fueled by the inherent greed of mankind.
I suspect Satoshi lacks the intent to be a villian here.
The creator of the Keurig, a device which produces amazing amounts of waste, talked about the unintended consequences of his invention and how ashamed he is for the damage his invention has done.
> unintended consequences
I'm sorry but you have to be very short sighted to call single dose coffee in non-recyclable capsules "unintended" waste.
The Nobel Prize is named after the guy who invented dynamite so I'm not judging a single inventor for not being able to conjure up the infinite number of ways his invention could be misused.
Nobel created the prize pool to atone for his deficit of imagination (or at least, to improve his posthumous image) upon reading scathing obituaries of himself mistakenly published when his brother died: https://en.wikipedia.org/wiki/Alfred_Nobel#Nobel_Prize
If Satoshi does something like this with his cold wallets, or Mr. Keurig does the same with his k-cup loot, then we'll think about it.
He meant for the machines to be used in situations where one-off servings are common, like small offices or for people who rarely have more than a cup.
Though making them unrecyclable is a bit of a question. Obviously it wasn't the intent but it seems a very obvious overlook. I believe (but may be wrong) that the Nespresso, a competitor, has compostable pods.
But Proofofstakeman shall defeat him!
ProofofSpace man helping HDD prices
> the most destructive person to have ever lived
I'm not sure if we can that easily pin the responsibility on a single person and not on every single one who still continue to go for PoW while knowing how destructive it is.
There's a reasonable argument that https://en.wikipedia.org/wiki/Thomas_Midgley_Jr was a contender for that title previously.
I would say https://en.wikipedia.org/wiki/Fritz_Haber blows him out of the water
>Haber is also considered the "father of chemical warfare" for his years of pioneering work developing and weaponizing chlorine and other poisonous gases during World War I, especially his actions during the Second Battle of Ypres.
but more importantly,
>Nearly 50% of the nitrogen found in human tissues originated from the Haber–Bosch process. Thus, the Haber process serves as the "detonator of the population explosion", enabling the global population to increase from 1.6 billion in 1900 to 7.7 billion by November 2018
Anything past 1.6B is overpopulation, and is driving the holocene extinction, global warming, pollution, etc... all of our big problems scale with population, and removing this natural limitation on our food supply has allowed us to blow the suspension out on all of them
What is a “natural limitation” of food? Should we get rid of mechanized farming, genetically enhanced plant varieties, modern logistics, and everything else that makes the modern world so spectacular and quality of life so high for billions of people as well?
The solutions for the future will be ones that improve technology to allow more to be produced more efficiently. We should look to the future, not “return to monke”.
Inventor of both * Leaded Gasoline * Freon
Ouch!
And killed by one of his own inventions...
Perhaps it was for the best. Humanity might not have survived his next invention.
I'm glad people are starting to realize this. I have been bashing bitcoin for this reason for ages only to be ridiculed.
Proof of Work eliminates the need for a centralized authority by identifying the planet all financial intermediaries live on and destroying it
PoS achieves the same
The consumption is a result of the greed to get the reward (fee + per block coins) and is not related to how the blockchain is operating.
You can see the carbon footprint from different blockchains on https://coincarboncap.com
But the only useful thing BTC does is transfer money/property from one party to another. Take that away and it's nothing at all. The block rewards are just there to operate the network. That the rewards were allowed to get so valuable that they consume the energy equivalent of Norway is a fatal flaw in the design, no?
> BTC is using over a megawatt hour PER transaction!
A transaction meaning transferring money from one wallet to another?
Nope - the author is incorrectly using total energy / total transactions to get this number. Which, is understandable. However, if there were 2x the transactions, the total energy would stay very close to the same. So no.
There's a lot of energy to secure the network, but the actual energy usage per transaction itself is a small fraction of that misquoted number.
You are correct, but for the wrong reason. Bitcoin's energy consumption[1] does not track with the number of transactions[2]; energy consumption has significantly increased while the number of transactions has not. What the energy consumption does track is the price[3]: mining creates coins, so higher price means more mining. The current ~4% inflation rate will not significantly decrease incentives for decades.
In a sane world, the energy use and price would be tied to the actual usefulness of the currency. They are not. In roughly 100 years the energy use will be set by transaction fees and the number of transactions, but currently it's only proportional to speculative will.
When transaction fees incentivize mining, the incentive to mine will certainly be much lower. Arguably more secure, too- the block reward creates a separate incentive for large players to dominate mining, which lowers the diversity of miners. It's not at all clear that the absolute energy consumption will be lower than it currently is.
[1]: https://digiconomist.net/bitcoin-energy-consumption/ [2]: https://ycharts.com/indicators/bitcoin_transactions_per_day [3]: https://www.coindesk.com/price/bitcoin
But it's worth clarifying that the number is correct — Bitcoin is currently using 1 Mwh per transaction.
Energy per transaction is not a very useful metric since each validated block helps secure previous blocks as well.
Put another way - each validated block helps secure every single transaction that came before it.
I'm not going to argue that the energy consumption is worth it (I don't think it's sustainable myself). I'm only pointing out that energy per transaction is a bad metric if you want to have an honest debate. It's much more complicated than that.
Except there is no connection between megawatts and transactions.
Because blocksize is fixed and blocks are consistently full, it's possible to estimate the next block's energy usage per transaction. All blocks are currently full as miners have an incentive to collect all transactions available, ordered by their attached transaction fee.
If you mean that the same amount of power would be used whether the blocks are full or empty, you are technically correct but in practice it's not relevant until blocks are consistently not full.
Does BTC makes sense if there would be no transactions?
If transactions are critical for everyone, wouldn't that mean that keeping bitcoin mining alive is a fundamental part of transactions?
We could argue that fiat keeps databases running (if we ignore physical money) and bitcoin is keeping blocks mining active.
I don't think it is wrong to say megatwatts per transactions. We could ignore this completly and say 'the baseload of just keeping btc running is x megawatts per hour' and that would just ring the same bells.
I'm pondering if we could also say something like "btc itself as a cryptosystem motivates actors to consume megawatts per hour due to the interest in btc and the current fiat<>btc exchange value"?
That is not correct.
Two glaring gaps in that concept...
First, energy use is not tied to transactions. An empty block uses the same amount as a full block.
And second, the transaction count we’re discussing is the count of settled base layer transactions. This doesn’t include the majority of transactions of value: those that occur off chain or through second layer transactions. An infinite amount of off chain and L2 transactions only need a single on chain transaction to settle.
Total energy / total transactions is a completely appropriate metric to use. If you could meaninufylly scale the number of bitcoin transactions and could amortize the high fixed costs of running the blockchain I'd agree with you but as it stands right now, you can't.
Yes, I'm aware there's off chain solutions such as lighting but it's unclear to me whether those solutions are viable long term.
But there can't really be 2x the transactions (or, at the very least there cannot be 100x the transactions). Transactions/block varies but there is a fundamental limit on how many bits can fit into a block.
Transactions are the thing that matters. Simply securing the network achieves nothing if people cannot move money. That's why people measure the network with transactions/joule.
Isn't the network already saturated with transactions though? To the point where it was needed to implement something like Lightning Network to compensate for that?
It was never needed. What was needed was to increase the max block size.
Instead, new people took it over and kept the throughput to the rate of a 56k modem. Now for the cost of a single transaction you can pay for enough hard drive space to hold the entire chain and enough bandwidth for a billion transactions.
This is like building a sidewalk instead of a freeway then saying you need to build a network of gondolas over it that just plunks groups of people down at different places on the sidewalk to move people.
Ah, yes, I'm very aware of that fact, my use of "needed" here was in the sense it was needed after all the ones making money from transaction fees took over and decided to not increase the block size.
Unfortunately the network can’t handle more transactions.
Decentralised, fast, cheap: pick two.
Bitcoin picked centralized, slow, and expensive. Most mining is done in giant warehouses, and the whole point is that more computing power results in zero faster processing.
It remains to be seen if there are good ways to do distributed currency, but there are certainly less bad ways.
Sure, they could have made better choices, but the decentralisation is really a fundamental problem that can't be designed away.
If you want it decentralised it's going to be significantly slower and more expensive than centralised networks.
More computationally intensive, yes- but computationally intensive may mean "running on smartphones in the background for .1% reduction in battery time" or "a medium-sized country".
Increased cost is certainly not so straightforward. If you're sufficiently distributed, using already-existing hardware, with spare compute on extremely efficient devices, it could conceivably cost less. Even if a centralized server farm would be doing an order of magnitude less math, smaller processors use an order of magnitude less power to do that math.
Bitcoin proper has a central ledger- every miner needs to hear about your transaction to verify it. Lightning is a clumsy way of reducing how many actors need to be notified of your transaction. Better currencies include stuff like that as first class. It's all in the name of getting closer to a constant-number verification scheme that is closer to competitive with the O(1) of registering a transaction with a bank.
Centralized credit/debit cards exist so that a big wealthy firm can say yes, this person has enough money for this transaction and I will guarantee the transaction by paying for it even if they can't. What I would really like to see is distributed, automatic guarantees: when you buy something at a coffee shop, people running validators on wifi will pick it up and use their staked currency as insurance (hedged by the system) that they know accounts who trust this particular account, and the transaction is valid. More people staking and trusting this account means more trust by the larger system, which then only has to validate aggregated transactions. Anyone announcing themselves at a validator plugs in at a given level of aggregation, all of which have different staking/network/latency/storage requirements. Unlike off-chain transactions (eg lightning), the system is guaranteed at every level.
Any given transaction will still be validated dozens or hundreds of times. En bloc it will probably use tens or hundreds of times more energy than the server farms powering VISA. I'll be honest, I'm okay with that. I really like the idea of having a bank account that isn't tied to a company.
My country handles 5 billion electronic transactions a year (thanks to COVID cash practically died last year). Fast and cheap although to be fair not decentralised. To this day I have no idea what cryptocurrency was supposed to solved.
i would say but i haven't checked his data.
Generally speaking, every 10 minutes! one block is mined which is incentivived with 6 btc or roughlyl the equivilent of over 150.000$.
In avg there are 1000-2000 transactions per block.
We have no idea how many transactions are “in a block”. There are multiple decentralized layers aggregating thousands of transactions down into a single bitcoin block transaction. This doesn’t even begin to touch the sheer magnitude of transactions that exchanges facilitate between their users without touching the blockchain.
Yes, but when I exchange bitcoin off chain, I'm giving up a lot of the benefits of using bitcoin in the first place.
Lighting in particular solves transaction speed by introducing additional potential security problems that need to be accounted for, particular closed channel type attacks.
From a default btc perspective, we are very aware of how many transactions are there.
Non of my ways of buying/using bitcoins is doing it indirectly.
And i do have to assume that this is nothing you can't estimate. After all either those systems are known and used, than you should be able to verify that this is a potential lightning transaction block which contains more or so.
> Satoshi Nakamoto may end up being the most destructive person to have ever lived.
I was with you up until this part...this kind of over-dramatization might turn others away. I can think of several genocidal dictators worse than Satoshi Nakamoto. If anything Satoshi is an Alfred Nobel type figure, who invented dynamite. We don't attribute all deaths from explosions to Alfred Nobel, and Satoshi is not guilty of what miners and speculators do.
When Satoshi returns she saves the day.
Just a tangent. Thomas Midgley invented both CFCs and leaded gasoline.
The power per tx metric is a dumb metric. Power usage doesnt increase or decrease per tx
It's reasonable to evaluate the usefulness of a system by weighing the resources it consumes against the valuable output it produces. In Bitcoin's case the valuable output is around 10 financial transactions per second, and the resource it consumes is enough energy to power the Netherlands.
The output also includes security/decentralization.
I can handle a lot of transactions on my personal laptop, but how safe would they be?
That doesn't mean it's a dumb metric. Any efficiency metric must measure cost per unit of output and in a crypto-currency that's power per transaction.
why not power per dollar transferred? transactions per 10 minute period is relatively constant over time. The thing that increases the energy usage is the price of bitcoin.
It's a dumb metric.
> The thing that increases the energy usage is the price of bitcoin.
This simply tells us that bitcoin has a dumb cost structure. Apparently its inventors didn't think about that either. But that's not our problem. Our problem is measuring efficiency, and for that we need a measure of efficiency. And a measure of efficiency needs to be chosen in terms of how good it is at measuring efficiency, not in terms of how good it is at hiding that a certain payment system has a dumb cost structure.
Would you measure a car's efficiency based on how much wiper fluid it uses per mile? The two measures aren't meaningfully linked, so it makes little sense to compute a correlation.
No, because wiper fluid contributes nothing to the outcome, which is the car moving from point a to b. The car will move from point a to point b whether it has wiper fluid or not. But it will not move without fuel.
Ok, so what about how many rotations the radiator fan does per mile?
The car will overheat and won't reach point B if the fan isn't running, so does it make sense to compare the efficiency of different cars based on how many rpm's their radiator fans do?
No, because the general idea behind efficiency has to do with the costs that are incurred to achieve a particular outcome. For example, a method is said to be more efficient than another if it achieves the same outcome at a lower cost. The outcome in the case of cars is movement because that's the purpose they're built for, so a measure of car efficiency has to reflect how costly is to move the car some unit of distance. The RPMs the radiators fans do per mile don't tell us anything about how costly it is to move the car, therefore, no, it's clearly not a good efficiency measure.
Wait until you learn how much energy the sun puts out
Energy used for PoW per transaction is a dumb metric.
Satoshi actually made the most efficient decentralized money that can ever exist and prevented more externalities in the world than potentially any human ever will.
> Energy used for PoW per transaction is a dumb metric.
Cars monitor energy use through MPG. Datacenters monitor it as well. Why should crypto currencies get a pass?
> Satoshi actually made the most efficient decentralized money that can ever exist and prevented more externalities in the world than potentially any human ever will.
[CITATION NEEDED]
> Cars monitor energy use through MPG. Datacenters monitor it as well. Why should crypto currencies get a pass?
cars spend energy to move. datacenters spend energy to compute things. bitcoin mining doesn't spend energy to process achieve some TPS, it spends energy to achieve certain level of security, so it's security per energy spent that matters, not energy per transaction.
if transactions or number of them are not an input to a bitcoin miner -- if miner will spand the same energy whether it's for 1 or 1 trillion transactions -- then energy per transaction metric is zero signal.
> [CITATION NEEDED]
no, actually, it's an opinion. current financial system and fiat money cause immense externalities: war, corruption, hunger, crime, etc. bitcoin is an incarnation of money where security is expressed in form of energy spent - you no longer need to involve politics or any other human activities to achieve security and so a large incentive for those simply disappears. bitcoin doesn't solve those externalities, but that specific aspect of money is simply no longer contributing.
> if miner will spand the same energy whether it's for 1 or 1 trillion transactions -- then energy per transaction metric is zero signal.
So? A running car consumes gas even when it's idle. My parents used to measure MPG at every tank refill, which was a combination of miles, idle, braking, etc.
We can certainly take an average of transactions to get a reasonable number for watts/transaction.
> no, actually, it's an opinion.
... which was stated as fact.
> A running car consumes gas even when it's idle.
Bad extrapolation of analogy, but still - how convenient that you decided to focus on the lower bound. How about the high bound? Can a car go trillions of miles per gallon? Because Bitcoin block can contain trillions of transactions every 10 minutes.
> We can certainly take an average of transactions to get a reasonable number for watts/transaction.
You can, it’s just not useful.
> You can, it’s just not useful.
Yes, yes it is. Stating an opinion as if it's fact, again?
Awesome, now do the financial industry!
Maybe take a longer view.
Right, the surface of the Earth will eventually become a black body radiator _anyway_, so why should it bother anyone if we want to have a little fun first.
There is a theory that life exists, because it is effective at spreading out energy as heat more efficently[0]. In such case, bitcoin (or having fun) can be seen as a good purpose for life. Most of activities seen by people as "fun" use up energy and spread it as heat.
[0] https://www.quantamagazine.org/a-new-thermodynamics-theory-o...
This is excellent. We should found a religion based on it. CHURCH OF THE ENTROPY MOST HIGH.
Super interesting thanks for sharing.
No my point is that eventually the energy burn per transaction in crypto will likely be near zero.
Downvoting is fine but I'd take a gentleman's bet that in 10 years either crypto has <$1bln market cap or price per transaction is cheaper than credit card systems when incorporating operational costs.
Given the entire argument seems lost on readers given the downvotes it's simple: proof of stake and increased use of crypto both drive down energy cost per transaction. The more people use crypto, the cheaper energy use per transaction assuming currency prices stay the same. (This is lost on most commentators, but it's reasonable to expect price stability in the post-speculation phase of crypto adoption.) And proof of stake and side chains stand to drive those costs down by several orders of magnitude.
Then you'll need to moralize air conditioning and entertainment and everything else too. These use cases aren't the problem, dirty energy is the problem. Fix the source of energy. We need to do that anyway.
Bitcoin and the Nakamoto Consensus is a breakthrough that provides a secure, global, uncensorable, decentralized store of value. With defined rules that can't be changed on the whims of a central actor. The energy is used to prevent bad actors from being able to rewrite the blockchain. Per transaction is a misleading metric (plus there are layer 2 solutions). You have to consider the energy used by militaries and banks to secure fiat.
When your government fails, as they have in many countries and eventually do in the long span of history, having such a store of value will be, well... invaluable.
> You have to consider the energy used by militaries and banks to secure fiat.
If, ever, it so happens that cryptocurrencies become anything more than a joke from the point of view of the global economy, militaries and banks will be required to secure their operations too.
> Bitcoin and the Nakamoto Consensus is a breakthrough that provides a secure, global, uncensorable, decentralized store of value.
Most people don't seem to realize that a store of value is stable.
Today ( just as in 2017 till the pandemic) has proven that BTC/crypto is not stable.
It has more similarities with a MLM scheme ( not really backed by anything ( eg. Stable coins - tether), unregulated, limited withdrawals of your money on the exchange).
I don't believe anyone actually thinks BTC is safer while it's influenced by memes instead of actual market conditions. Well, except if the reason is greed and personal liability ofc.
Ps. The only reason to have some crypto coins is for diversifying your portfolio. If you consider the risks carefully, as with everything else.
It's a new technology. Volatility is to be expected. Zooming out, any purchase of Bitcoin prior to a few months ago is still in the green. Even if you bought the peak in 2017.
If you zoom out on USD, it's not exactly stable either. It has greatly decreased in value due to inflation over the years. Or worse, if you zoom out on bolivars and other currencies. Anyone in country with hyperinflation, or at risk of it, very much appreciates a permissionless global store of value.
Inflation is a technique created for stable countries with stable markets. Fiat is based on market conditions, not on hypes and memes like BTC. BTC isn't really a hedge against inflation either, since the lack of underlying value.
Hyperinflation means that that market is in trouble, you can already hedge with USD/gold in most cases, which is actually backed by something. Losing a couple of % over years is a tested strategy and a requirement for healthy economies. Most people that talk about BTC and hyperinflation don't understand basic economy and are just looking for an excuse for BTC to rise because of... Greed.
Additionally, BTC was new in 2009 and I cashed out 2017 and never looked back. It's not new anymore and hasn't been for a long time, a lot of accountants even got courses about the blockchain in Belgium 5 years ago.
Everything of 2016-2017 repeats. Then it was adopted by steam, woocommerce, square, Amazon, ... and they all removed it again or never finalized the integration, because of not enough usage. That's 5 years ago and everyone was talking about it and it was in every possible media in every country. That is: Newspaper, tv, going out, Reddit, here, ads, ... I even had a site with some popular articles on it ( how to recover your bitcoin password was by far the most popular one fyi)
Today it's just Tesla and they also removed payment.
Ps. Countries going to do digital currencies are not going to base it on a existing one. So that's unrelated to the topic of currently tradeable crypto.
Ps2. A bit of regret not thinking about it in March last year. But that's just the greed talking.
Military and banks do more than what PoW blockchain does.
I don't buy in the energy argument myself, but trying to justify the way you do sounds a little too kool-aid-y.
Man that koolaid must be tasty
Your store of value just dropped 40%.
Shaaaaady.
The NYGA report on Tether is due today. Tether is completely insolvent, and once the rug is pulled, all of the exchanges are going to realize that all of their "stable" reserves are worthless and they can't pay out what they're storing for customers, and the price will tumble all the way down as there's a run on the pseudo-banks that can't payout.
Or not, what do I know.
I've been hearing the same thing about tether for about half a decade now.
We all know it's insolvent. Apparently it doesn't matter.
Until it does. If everyone tries to get out of tether at once there could be a run on the currency and a collapse. If tether has been manipulating prices (seems likely) that will also come out in the crash.
As of press time, USDT (Tether) is currently trading at a slight premium to USDC[1]. There's no indication that the market is pricing an imminent collapse to Tether.
[1]https://info.uniswap.org/#/pools/0x7858e59e0c01ea06df3af3d20...
I don't trust those prices I'm afraid - the price of most cryptocurrencies is manipulated heavily, and this one in particular by printing tether - the peg is a lie (as shown by AG investigation), the backing is a lie (as shown by Tether's admissions), and it's going to zero eventually IMO when the lies unravel. See this recent story for more detail:
Currently people are fleeing to Tether, so of course the price is up. The implication of the parent comment was that the Tether printer could be getting out today, which would cause BTC to drop.
The question then becomes what happens tomorrow. Are people going to try to get out of the Tether that they've jumped into today by going to BTC or USD? If they go to BTC, then no problem, the price goes back up (some). If they try to go to cash, BTC keeps dropping. Tether's value doesn't have to crash for the Tether machine to stop running and cause a BTC crash. Though, at some point in the process it would start dropping, and that would then cause a further BTC price drop.
A global, decentralized MLM-Ponzi scheme in an irrational market could last decades - especially with the manipulation of the market and regulatory capture efforts.
Edit to add: It's part of the cycle of educating society, it'll be painful and costly to those who were left holding the bag - a mob of potentially 100s of millions of people financial aligned hoping they can get more of society convinced of their ideology of Bitcoin's supposed exclusive value.
That happened in May-Jun 2019. Auditor's report came out that Tether was insolvent, there was a run on the bank, Bitfinex suspended redemptions of Tether, Binance suspended trading in Tether.
The price of Bitcoin went up, from about $5200 to $11,000. Why? Because with Tether out of the picture, Bitcoin is the next most stable cryptocurrency (at the time, there was not enough DAI or USDC in circulation to absorb all the Tether money, though those "stablecoins" traded at a premium of about $1.06/$0.92 against Tether). If you're in the cryptocurrency ecosystem, it's usually because you don't want to keep any of your wealth in $USD, so when Tether was declared insolvent all of the money there rushed into BTC.
One way to reason about why it doesn’t matter: insolvency is not the key part of the financial survival constraint, liquidity is. You could think of tether as just “leveraged” against its underlying USD holdings. It’s only problematic if there is a run on tether, so to speak, where it does not have enough liquidity of USD reserves to satisfy redemptions. (There’s some kind of a limit on redemption though, right?)
The same is true for other types of money - a bank does not hold reserves (assets) against all of its deposits (liabilities), but that does not prevent it from operating, or from bank customers understanding bank deposits as “real money”.
To be clear, I’m not very informed about tether, and as a lay person I do find it to be a shocking situation that probably makes sense to label as fraud. I’m just trying to offer some explanation.
You do know that Coinbase has a $50k a day withdrawal limit? A lot of doomsday scenarios leave out this important detail when talking about a hypothetical bank run.
That's a USD limit. Since Coinbase is FDIC insured, I expect they have the cash-reserves to actually survive a run denominated in dollars. Even if Coinbase itself goes under, FDIC will make your dollar value whole (up to $250,000 per banking institution)
You know, the whole benefit of being in the USD. The made up rules of society that provide stability in times of crisis.
Coinbase and FDIC insurance seems tricky at best... I think it only covers deposits made via cash from federally recognized institutions, and will only be covered if you leave it as cash.
If you are transferring tokens in and/or converting tokens to cash, I don't believe those transactions would meet the criteria to be covered by FDIC at that point. I might be wrong on that assumption, but FDIC is only deposit insurance, not withdraw insurance, and its under very specific terms.
If an FDIC insured account says "$100,000" in it, and then Coinbase goes under... you get $100,000 from it. Maybe in a few months after bankruptcy court figures out the details. But... yeah, the FDIC insurance definitely covers the stated balance.
If you have $99,990 in BTC, and $10 in cash, only the $10 is covered.
Coinbase could shut down converting crypto to cash at any time. There is no promise or guarantee that they have to allow cash exchanges or deposits, since they're basically buying and selling crypto on your behalf.
> If you have $99,990 in BTC, and $10 in cash, only the $10 is covered.
By the FDIC. Of course, FDIC only covers dollar-denominated balances (savings accounts, checking accounts, etc. etc.). Even money-market accounts (very cash-like) are NOT covered by FDIC, which is why money-markets get a wee bit of a bump in %yield.
Coinbase claims they have the BTC insured through some other means. I don't know how to look into those details or how trustworthy it'd be (ex: AIG "insured" a bunch of mortgages through Credit Default Swaps, which ended up being worthless).
But overall, the idea of losing a security through various means (ex: Credit Default Swap "insurance" turns out to be a sham and the mortgage debt is all worthless) is kind of "normal" in terms of financial markets.
Similarly, if all the BTC disappeared it'd be terrible for BTC-holders, but I think people generally understand that those risks exist.
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Look, I think Cryptocoins are stupid at this point (even proof of stake, but that's another thing). And Coinbase's service going in-and-out over the past day or so is clearly a threat (if BTC moves while Coinbase is down, you lose your opportunity to buy-and/or-sell at the prices you want).
But I don't think there's anything shady going on at Coinbase specifically.
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Now if you want to talk about shady business, we can talk Binance, Bitfinex, and Tethers. Plenty of shady things going around in the cryptoworld.
>Coinbase has a $50k a day withdrawal limit
Given the price volatility of crypto, that sounds absolutely insane to me. Also, I don't think this prevents a run, on the contrary, when everyone hits the sell button and cannot actually exit then panic will ensue.
True but it still makes a single day hit via Coinbase users predictable - which gives them data they'd need to pull different levers including when they use reserve funds they're controlling for buy orders from large institutions; likewise they'll know when the bank run is trending too fast and they'd need to hit the breaks by making Coinbase inaccessible.
A withdrawal limit has nothing to do with being able to exit a trade from BTC to dollars.
The exchanges handle that part of the "problem" by simply having an outage. The withdrawal limit solves the rest of the problem by limiting how much USDT can be converted to USD.
> You do know that Coinbase has a $50k a day withdrawal limit?
On the day you might think that limit matters, it's not really gonna matter.
It still would slow down a bank run, and Coinbase conveniently/suspiciously going down when bank runs seem to start would further cut off impulse selling - and arguably long enough for manipulation to happen elsewhere to turn price into upward trend again to quell impulse selling by potentially artificially making the price look like it's rebounding.
It doesn’t take many people for that to multiply into many millions of dollars…
Withdrawal limit or sell limit?
Presumably, people can sell all their holdings and withdraw over time.
When the BIG selloff comes, the withdrawal limit isn't gonna matter. 'NO BID' seems inconceivable to some, but it's real and it can happen.
What's a BIG selloff? -90% in 2018 wasn't it?
What's to stop me opening 10x accounts of $50k each and pulling them all out at the same time?
I guess the fact that they follow KYC requirements and not allow anonymous accounts? You would have to create 10 fake identities for yourself first.
Huh, looks like they're better organised than I expected, thanks.
You need to provide KYC info to open an account right?
I did notice they stopped printing some time this week after months adding billions of dollars. For anyone curious you can easily see tether printing by checking at USDT market cap increase.
Imagine still repeating the same “tether is about to collapse” fairy tale in 2021
Personally I don’t care - let it collapse if they did anything shady, but this zerohedge-esque “broken clock” strategy is extremely amusing.
Well yeah, we’re in the middle of the dump phase of pump and dump in an unregulated marketplace.
i'm holding which of you apes is with me (sarcasm)
Well, dumping once you already knee deep in the dump only ensures a guaranteed loss.
If you are confident about the long term prospects of an investment, then holding on for longer might just work. I won't be selling any of my Eth or PoS crypto currencies any time soon. It helps that crypto makes up less than 15% of my portfolio.
Not really, you can dump and buy lower. Dump and not buy back will guarantee losses. Usually you dump based on panic and not buy back that’s how wealth is lost usually. Most assets don’t go to zero after someone sells, they may go lower but will have a bounce point somewhere down the line.
That's genuinely a better plan than just holding.
I don't like active trading a lot, but if I did, then this would be ideal.
It does, but that’s a tax event.
Tezos?
Exchanges going down is the circuit breaker of cryptos.
It's also a circuit breaker for regular brokerages too :)
Except Crypto isn’t regulated like stocks, so what your likely seeing is the exchange themselves shutting off service to lock in their customers while the exchange liquidates its positions.
>> Except Crypto isn’t regulated like stocks,
Except that most of the time that means nothing in practice.
Just look at the GME saga and you have customers liquidated, customers not being able to buy, some not even able to sell. And on top of that the CEO of Interactive Brokers setting a target price for the stock.
All this so that few highly leveraged hedge funds can get away from the short squeeze cheaper along with their lender/broker.
Except it doesn’t mean nothing because there are a bunch of lawsuits against Robinhood, because the law provides a remedy for the bullshit they pulled.
Right! Let me know when they get their money back. I thought that when bad stuff happens on regulated markets at this level(i.e congresional probe etc) the DA, SEC, FCA or whatever agency is in charge is supposed to intervene and make it right. And btw it wasn't just RobinHood. At some point all the retail brokers(i.e Interactive Brokers) decided to hold various positions(buy/sell).
People can sue coinbase and any other shady broker as well. If you've lost 10K I doubt you are willing to spend even more to get it back in court be it coinbase, RobinHood or any other exchanger/broker with an army of lawyers.
Look I’m as jaded as the rest, like everyone. I’ve seen mass manipulation to promote bullshit wars. I graduated in 2008 and I am still told to shut up and say thank you to the banks for paying back taxpayer loans with interest that bailed them out of their own fraud and let them consolidate the market. I saw the CDC initially lie about masks to allegedly preserve supplies for healthcare providers. I saw the government take trillions in future taxes and mostly give it to businesses and for the FED to leverage into even more money to prop up the stock market (hey, all time highs again mid pandemic).
Still, for all the BS lawyers get, much of it deserving, for every lawyer behind the brokers/investors/funds there are others representing the victims. These are the types of lawsuits that include egos so big that sometimes discovery of emails/communications and the prospects of sitting for depositions result in a resolution, and even change.
It’s funny you mention the army of lawyers, because many of these cases have been consolidated and one 1 Zoom hearing were 141 lawyers…they represented the plaintiffs.
It's not about lawyers being good or not. What we currently have in financial markets is far from a lawful or just system. Just look how Musk manipulated TSLA and got away with a slap on the wrist $20 Million fine. He openly mocked it on twitter afterwards. And that's just a blatant example from someone who doesn't even care to hide it. That recent GME manipulation wasn't an exception, it's the norm. There are a ton of hedge funds engaged in "technically" illegal trades worth billions of dollars. But who's going to stop them when they're in uncovered short positions, which happens all the time. There is no higher power. The SEC is a paper tiger. If you want to sue Citadel, be their guest. The lawyer's fees and occasional fines they pay are already taken into account. Not that someone like you and me could even afford to bring a case against them.
Like all the people who went to jail for the 2008 crisis?
The customers that were liquidated were trading on margin (aka with borrowed money.) When you accept that borrowed money, you also agree that the broker’s risk department can liquidate your positions to ensure they get their money back.
I have not heard any anecdotes about US exchanges not allowing selling/exiting existing positions. In fact, on of the arguments from GMEanon is that disabling buying and keeping selling open drove the price down. There is nothing illegal about a broker disabling entering a new position (buying stock).
Who are they liquidating their positions to if they are shutting off access to exchanges? Every seller needs a buyer.
To all the decentralized exchanges where poor fools have their money locked up to be sniped.
Crypto isn’t governed by finra regulations. Its wild west, therefore wildwest tactics like front running etc are fair game.
Gg for those of you who maxed out credit cards to buy crypto
I have no doubts about front-running, but that would still mean they need suckers that have access to exchanges in order to liquidate their positions.
> to lock in their customers while the exchange liquidates its positions.
Not an expert in legal and financial matters, but that sounds like it would start a FBI inquiry and even prison-time for all those involved.
I mean, maybe? If crypto is not bound by legal frameworks that govern traditional banks, what law would the exchanges have broken? The worst I could see happening is class action lawsuits, but not any kind of federal action.
> all those involved
Never.
so many FBI inquiries started from the GME fiasco, right?
You seem to be sarcastic but in fact yes the Robinhood/GameStop BS resulted in both a congressional probe and it skipped the FBI and went straight to the prosecutors at the Department of Justice.
And it's not only Robinhood. Citadel, the market maker seems to be the brain behind all this price manipulation and media attacks on AMC and GME and selling a whole lot of synthetic shares on the market which when retail investors buy do not affect the price. I've been following this saga closely and am beyond horrified of how corrupt our free market is. It is not free at all and heavily manipulated.
Looks like very serious stuff happened indeed. I'm not sure about why I forgot about the congressional probe. Perhaps it's because for the people who lost or made money out of this nothing changed. It's good to know that when bad stuffs happens on regulated markets there will be a congressional probe while on the crypto market you have no prime BS on tv.
These companies are backed by VC money, they can just drag out any court cases for years or decades until they have managed to buy themselves legal immunity. We saw it with Uber, Lyft, AirBNB, etc.
True. The whole run up in crypto has been so closely tied to Goldman backing Coinbase's IPO that it's laughable.
Or probably their servers didn't have the capacity to answer all those requests.
Not Coinbase.
Nice try, but Coinbase is one of the most, if not THE most tightly regulated exchange out there. [0]
[0] https://help.coinbase.com/en/coinbase/privacy-and-security/o...
It’s the same company that attempted to keep its customers Bitcoin cash when Bitcoin forked right? Then only backed down after consumer backlash? Same company that tipped off its employees to buy Bitcoin cash to pump it before it was listed and then it was dumped on day 1?
FYI, Fidelity, with nearly $5T AUM, is currently down.
I'm not sure if it is the causation but China took drastic restrictions on cryptocurrencies yesterday, and Chinese players IMHO held a big share of those cryptos.
Also, people in China would call it "unplug" when exchanges going down. It's a popular meme because people find every time the market crashes those Chinese exchanges would go down as well, thus many people believe they intentionally did that to let oligarchs sell their crypto in back channels first.
Chinese people will continue to siphon money out of China and cryptocurrencies are the ideal vehicle, they will continue to do it one way or another.
I recommend to look at the tether trading volume. If too many people are requesting their dollars at the same time, tether will go bankrupt and with it the bulk of the 'value' of the crypto empire.
(hard to get a site that is up and has a good chart for that rn..)
https://crypto-anonymous-2021.medium.com/the-bit-short-insid...
Posted on HN a while back.
"To be crystal clear: every time you sell Tethers on Kraken, you are forcing Tether Ltd. to pay you in US dollars. If you can manage to sell enough Tethers for USD on Kraken, then Tether Ltd. will run out of dollars and this whole machine — which currently undergirds 70% of all crypto trading flows — will fall apart.
Well-capitalized hedge fund managers may wish to re-read the above paragraph, and ponder its implications."
> will run out of dollars and this whole machine will fall apart
Sounds like it could be three things:
1) Their USD standard is bunk. If you're on a commodity money - or secondary exchange money - standard then you can only issue as many certs as there are units of that money in your reserves. With the XAU standard, you can't just mint gold certs without gold underlying it. That's not how any of this works!
2) They just FDR'ed their users, and took them off the USD standard but didn't tell them.
3) Less technically: sounds like they're skimming off the USD for themselves and hoping everyone doesn't divest at the same time. This could be either fraud, or it could just be incomitance, ignorance or any other *ance really.
I think it's nothing as dramatic as (1). Just that instead of holding USD currency, they're holding equivalent "commercial paper"[1]. This means that everything will be ok as long as they can sell these bonds when the time comes. But if any of the held bonds fail or decrease in value, Tether will be in serious trouble.
I could see Tether becoming insolvent if/when there is another financial crisis that reveals some of these bonds as junk.
[1] https://www.coindesk.com/tether-first-reserve-composition-re...
I can definitely see that being the case. The only issue here is that if you're actually just holding bonds and not cash, saying your currency is on a USD standard is patently false.
If your currency is backed by some kind of non-cash instrument, then what you've actually got is some kind of ETF like structure, not a currency qua exchange currency.
After Tether allegedly lost high 9 figures to a "scam" #1 seems not that unlikely.
"Last week, New York Attorney General Letitia James announced that iFinex—the parent company of Bitfinex, an exchange, and Tether, a dollar-backed digital token—is under investigation for fraud. At issue is $850 million that disappeared from Bitfinex’s coffers in mid-2018. The funds may have been stolen while in the possession of Crypto Capital, a payments processing company based in Panama. Crypto Capital has also been tied to Quadriga, a Canadian exchange which lost $140 million a few months ago."
https://qz.com/1607657/tether-could-bring-down-bitcoin-after...
> Posted on HN a while back.
Please link to the HN article: https://news.ycombinator.com/item?id=25788409
The analysis in that link was debunked.
Can I see the debunking? Or is it secret?
debunked where? and how?
https://coinmarketcap.com/currencies/tether/
Jump to the 7d view
According to their Terms and Conditions, Tether has no obligation whatsoever to redeem their currency for dollars, so while they may not be backed (and almost certainly are not), a bank run is not really their problem.
It's a problem for the value of the Tether coin and therefore for the nominal value of the entire crypto market.
But otherwise: smart move. :D
You say it as if it is regulated. They will simply put a stop for real customers and pump some orders in the market to keep the peg. I fail to see how they can fail except massive incompetence in managing this scheme.
> (hard to get a site that is up and has a good chart for that rn..)
Was just going to ask what you would recommend to monitor that. In better times, what would be the best resources?
That HTML error page uses my GPU and consumes an entire CPU core.
Look, they need to mine crypto somewhere.
Just leave it up for a couple hours kthxbye.
According to Binance, Bitcoin just went down from $42k to $30k in 2 hours. Elon Musk selling his cryptocurrencies??
Its due to that, automated selling probably, but mostly because of China adding increased scrutiny. CN is one of the biggest bases of bitcoin:
https://www.cnn.com/2021/05/19/investing/bitcoin-price-drop-...
Bitcoin is a "decentralized" digital currency.
Much in the same way as how North Korea is a democratic people's republic.
Only if hashrate is decentralized, and it's not. A significant portion of all hashrate is in China.
That's largely dependent on the ebb and flow of hydraulic power
Well, China was very close of getting over 50% of hash rate, so this news is good for Bitcoin... /s
Those following the GME saga believe it’s Wall Street banks scrambling to find liquidity in response to emergency rule changes by the OCC.
It’s fascinating stuff to follow — watch the VIX today, a measure of stock market volatility. It’s absolutely soaring already.
The GME saga is over outside of fervent believers who cannot accept that Wall Street did not tumble because one small hedge fund made a bad bet.
At this point the true believers are one more "short squeeze" missed deadline away from being recruited by cults and militia groups.
Following WSBs is like the new QAnon.... some 'event' is always a few days away.
The volume of Bitcoin is over $100B sometimes. It's over $75B in the last 24 hours.
There are several days in the last month, according to Tether, with AT LEAST $500M of inflows.
A single $1B of outflows shouldn't tank a market like this by 40%...
In this case the volume is pretty irrelevant. If nobody wants to buy at the current price, and there are people willing to sell for a penny less than the current price, the price will drop. $1B or $10B of outflows can have the same price movement.
It’s what happens when the entire vehicle is speculation. I know the plan and the desire is for Bitcoin to be used as an alternative payment method but it isn’t fit for purpose. The people investing in it are doing so purely on a speculative basis, so you’d better believe plenty will cash out at the first sign of a dip.
Can you please point me a source where Bitcoin is "desired" as a payment method? It's seen more of a store of value, not used for paying for everyday things.
Sure!
The original Bitcoin whitepaper from Satoshi Nakamoto is available here: https://bitcoin.org/bitcoin.pdf
It is titled "Bitcoin: A Peer-to-Peer Electronic Cash System"
So, based just on the title, it's pretty clear that it's original intent was as an electronic payment method.
The first sentence of the abstract is: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution"
If you read the rest of the whitepaper it's pretty clear that the original intent was as a mechanism to facilitate payments and transactions.
That's BSV, maybe. Bitcoin core deviated from the original white paper long long ago
Are you arguing that the original Bitcoin whitepaper is invalid as a source of whether Bitcoin is "desired" as a payment method?
Clearly, at least one person (the author of the whitepaper!) "desired" Bitcoin as a payment method. They desired it so much, that they went off an invented it!
If that doesn't count as a source indicating what someone "desires" then nothing does.
The "store of value" thing was made up to keep the speculation bubble inflating when it became clear Bitcoin had no practical use.
Isn't the revisionist history amazing? All of the other use cases (e.g. smart contracts) are proven failures and now the original use case (payment method) is also clearly a failure, so the narrative shifts to "it was never intended to be a payment method, only a store of value". A store of value that can drop 40% in days, BTW, another failed use case.
You’re asking for a source to prove that people want to use a cryptocurrency as currency? Feels a little like asking for a scientific paper proving that fish swim in water.
I would also love to have that source. Any statistics on % of crypto used for actual transactions vs only for trading?
It's not about it being valued as a currency for its objective characteristics, but rather based on the limitless enthusiasm of crackpot ideology
Crypto markets are manipulated AF, nobody knows how much the "real" volume is.
>A single $1B of outflows shouldn't tank a market like this by 40%...
It depends what kind of market you think it is. The fact is there's no economic fundamental supporting the value of Bitcoin, so it's value is just whatever speculators are willing to pay at any given time.
Unless big players know something about Tether that most people don't https://coingeek.com/tether-reaches-new-lows-in-quest-to-avo...
Crypto is an... interesting market. The vast majority of trades are done by bots. Some external event causes BTC to swing and bots key off that, magnifying the effect. When it’s a REALLY big event like today and people are trying to cash out, the effect feeds on itself.
Does the stock market work similarly? From what I understand about 4/5 of all trading done today is automated.
He already did: https://twitter.com/elonmusk/status/1394001894809427971
He was responding to the "I wouldn't blame him" part - the following day he posted that Tesla had not sold any, and he's stated that they plan to accept BTC as payment in the future once more of the mining is transitioned to renewable energy. [0][1]
[0] https://twitter.com/elonmusk/status/1394170030741413888
[1] https://www.cnbc.com/2021/05/16/elon-musk-suggests-tesla-is-...
He clarified later that he did not. Let's not over estimate his tweets, other forces are at play.
This is not good - likely a shit ton of people withdrawing due to panic and Coinbase is having trouble covering. Only way to stop the bleeding is to hide behind "server troubles". It can't be a coincidence that all crypto currencies are on a downward spiral and Coinbase is down
> Only way to stop the bleeding is to hide behind "server troubles"
Introducing: Server Trouble As A Service. The most efficient way to stop a run on your bank.
Think of all the untapped incompetence out there to make this happen. This could also solve UBI.
I'm a bit of a cryptocurrency newbie, but I know enough about it to know that centralized exchanges are not what cryptocurrency is really about. It's more about spending with cryptocurrency (in a decentralized way) instead of exchanging some fiat for it, and vice versa, no? It's a bit of chicken and egg problem I suppose (If I want Bitcoin I need some fiat to get it in some cases), unless I acquire Bitcoin via some other method (like stealing/mining it)?
Edit: Also: Since most people need USD to get Bitcoin (or other coins), doesn't that mean all cryptocurrencies are inherently gold-backed and rely on the value-store of gold? (Excuse my naive question. Again; I'm a newbie).
People realised some time ago that Bitcoin isn't actually fit for purpose for most payments because transactions take so long to close. So it's now pivoted to this value idea of storing "value". Absolute house of cards.
It's not even that. The two main problems are that Bitcoin in non fungible - that is 1 BTC != 1 BTC, and that comes from the second problem - BTC isn't anonymous, in the sense that all transactions are publicly available and there are tools already that give great deal of deanonymisation capabilities. Now if you use a tumbler to get "fresh" coins, it may be that some of the source coins were involved in hacks or drug deals and are blacklisted. This means when you'll try to withdraw you likely get them confiscated and get yourself in trouble.
Transaction fees are over $10 right now!
> It's more about spending with cryptocurrency (in a decentralized way)
That was the original intent, but it's been known for years now that cryptocurrencies just don't work for that scenario. As soon as volume grows, transaction times and costs soar to levels that are unsustainable for actual payments. So most cryptocurrencies have since turned into speculative digital commodities, arbitrary items that get value out of being unregulated, transnational, and anonymous or pseudonymous. They allow money to flow internationally outside of the official banking system, untroubled by pesky anti-money-laundering laws or anything protecting investors. Exchanges on the fringes deal with the trouble of converting them back into money and goods... at least as long as governments allow them to do it.
I think that very few people are actually paying with cryptocurrency right now. As long as it's as volatile as today (and in the case of BTC, transactions are so expensive and slow), it's mostly speculation about which system may be used in the future.
> spending with cryptocurrency
It hasn't been about actually using it for years now.
Or acquire it the same way you presumably acquire USD: work and get paid in it.
Kinda weird you left that out but mentioned stealing, although I suppose ransomware is top of mind these days.
> acquire USD
Are you saying Bitcoin and other cryptocurrencies are inherently gold-backed like the USD?
https://en.m.wikipedia.org/wiki/Gold_standard covers its abandonment, including by USD
How is this ok? A market crash multiple exchanges go down and/or withdrawals certainly become very hard - this was submitted earlier to hn about Binance:
https://www.reddit.com/r/binance/comments/nea291/weekly_bina...
How is it OK? Isn't the point of this that it's the wild west?
Could it because of T+2 settlement?
There is no such thing in crypto.
I haven’t traded in crypto so please take it with a grain of salt.
If someone is selling BTC for USD then someone is doing the same in the other direction. From Gameshop saga we do know that USD takes time to travel between different parties, in this case from buyer to coin base and then from coin base to seller. Unless USD payment is instantaneous there will be some form of T + 1 isn’t it? What am I missing here?
Crypto exchanges have thr crypto and the fiat posted by customers ahead of time. Settlement is instant, it's withdrawal that takes time on the USD side. In stocks the various broker dealers are essentially loaning each other the money and stock and sorting it out in three days.
People trade derivative coins such as USDC, USDT and BUSD that pair with coins such as BTC or ETH. These are basically stable coins that track the USD. Therefore trades are nearly instant. Withdrawing USD from the platform involves selling your derivate coins for fiat.
Derivative coins that might not be so stable after all... https://coingeek.com/tether-reaches-new-lows-in-quest-to-avo...
Why is this happening? China is adding increased restrictions and pressure on bitcoin.
https://www.cnn.com/2021/05/19/investing/bitcoin-price-drop-...
These articles have been circulating for years. No one piece of news moves markets like this. This is just one small part of the drop.
According to this page everything is fine!....
"Intermittent downtime on Coinbase platforms"
"Investigating - We are currently investigating this issue. May 19, 06:12 PDT"
I think they're going to see why stock exchanges implemented circuit breakers. Negative feedback loops are really bad.
But you know what's worse? The government helping you!
t. anarchists
It says partial outage for web and api for me.
40B+ company which sole product is web-site can't keep it running? Where is the value in that? Or are they doing it intentionally to slow down things?
I wonder how much the volatility of cryptocurrency is influenced by the stability of exchanges. Does it make the price more stable by artificially restricting trading, or does it ultimately induce more panic?
I'd venture to say directly -- current lvl2 data shows about 1-10% of previous order depth available.
Which also asks the next question, how much of the price action and volume is automated trading in these platforms?
Not that automated is necessarily good or bad - but how much is a retail interest
I can't answer in general, but one thing I do remember: Litecoin didn't move in tandem with Bitcoin until after it was added to Coinbase.
If one exchange goes down and you have enough money to move the price on another one, that's a great opportunity for some arbitrage. That would cause at least some players to try for higher volatility. (No idea what the overall effect will be though)
wow what's going on with all the crypto prices today?
It’s curious that BTC has peaked exactly around the day of Coinbase IPO
deleting due to quality of replies
Thinly traded, purely speculative markets, with very few, highly concentrated holdings, running on completely untested, largely unregulated exchanges, with no SLAs, middlemen, customer support, etc. . .
There's a lot of correlation between them as they're all riding the same "cryptocurrency" wave.
In fact I think you could turn that into a partial numerical measure of the crypto market. In a mature market where "cryptocurrenciness" is mostly just a fact of life, they ought to be less correlated as they have independent lives of some sort. (They'll never be completely uncorrelated, of course, since the whole market is correlated to some degree.) Right now it's still enough of a novelty that the mere fact of cryptocurrenciness is a big percentage of the appeal of a given cryptocurrency.
Alternative theory: USDT is actually down by 40% but the current peg is artificially supported by restricting trades (with USD).
They are all linked and deeply correlated to Bitcoin. Also happens in the other direction.
Because there are no fundamentals.
Assets in the same asset class tend to move together, especially during market crashes. Same exact thing happens with stocks during periods like 2008. In finance speak, we say “correlations go to 1”
Crypto holding steady; USD is in a deflationary spiral /s
Likely related to the China news: https://www.reuters.com/technology/chinese-financial-payment...
Estimates put 65-75% of BTC mining in China. That just became a pretty shaky foundation.
Every time a miner post something here or on Reddit, they are mining one coin and immediately trading into another. The same for the exchanges, that keep reserves in a lot of them, and trade one for the other all the time to keep their ratio.
It's not unexpected that they are correlated.
People don't differentiate really between cryptos, they just randomly throw their money around and call it "portfolio"
All cryptocurrencies are basically the same and indistinguishable and fulfill the same needs.
Take a look at the top 100 charts at any random time of day. They’re almost all carbon copies of the BTC chart.
They all have the same value, ie. not much.
Bitstamp (https://www.bitstamp.net/) has been having intermittent downtime as well.
What’s going on with the comments in this thread? They’re out of character.
Definitely worth 2x Nasdaq!
Coinbase goes down every single year when the market corrects.
I thought cryptocurrencies are supposed to be free from government and world influence.
You can always try to find some guy on street and trade it for cash or gold or silver... Oh wait, government might have say about using the cash...
The error message from Cloudflare is interesting "This website is using a security service to protect itself from online attacks."[1]
I'm really furious Coinbase for an unrelated incident.
I bought a bunch of BTC back in 2018 on Coinbase and just left it there, I rarely checked it. Fast forward to 2021 and I want to see how my portfolio has grown, only to be told my account was disabled. This was back at the beginning of March. So I contacted them and told them my issue. They sent me instructions on changing passwords, calling my mobile service provider etc. Some ridiculous stuff. I did it all. Only for them to tell me that they have to forward my case to a specialist. 3 weeks later, they come back to me telling me to repeat the same steps as I did before, and I complied, only for them to tell me they are again forwarding it to a specialist. Another 3 weeks later, they tell me to repeat the same steps in addition to taking a photo of myself holding my ID with a sign that says 'For Coinbase verification'. Did that degrading stuff too. Guess what they told me again, oops we are forwarding it to a specialist.
I don't know whether it is automated supported or what but this is absolutely disgusting and there is no name to the emails, just 'Coinbase Support'.
The same thing happened to me on Bittrex for two years. The requirements of the photo holding the paper are asinine (one looking at the camera, one facing right, one facing left) and then they rejected the photos because "my elbows did not show". Next they will ask me to record a video of myself doing some silly dance for their amusement I guess.
As soon as I regained access all took all my shitcoins and moved them to a wallet for which I have the key.
Centralized exchanges suck, they are completely against the principles of Cryptocurrencies.
I might sound heartless here, but, Not your keys, Not your coins.
The photo of you holding a photo ID is standard practice these days. Afaik, everyone creating an account has to do that, and apparently it applies to old accounts as well. It's because CoinBase is trying to be fully legal/compliant with US law. Plus, they're FDIC insured.
I guess my theory of bank run on bitcoin is about to be tested.
And the west coast didn't even wake up yet...
I just got this trying to log in to coinbase: You are now in line. Thanks for your patience. Your estimated wait time is 1 minute...
Exchanges suffer the disadvantages of serialized computing. The matching engine model is inefficient from a computing perspective.
For me the Reddit subreddit https://www.reddit.com/r/CryptoCurrency/ wont load either.
I can load the rest of Reddit fine - but that page just loads as a blank white page. I'm guessing its lots of people going there for the discussions...
Loads fine for me.
Its back now. Started getting Cloudfare errors too, but all fine now.
It's quite concerning given the amount of people who will be trying to sell right now. Even a short period of being locked out of trading could cost people thousands of dollars. I'm sure they're protected in their terms of use but I wouldn't use an exchange that can't keep live with high volumes.
Volatility up, coinbase down
Today cascading liquidations becomes a household term.
A Wyckoff Event just happened as he explains https://www.youtube.com/watch?v=rFijwQzZFuM
Big banks and the rich are squeezing out paper handed retail and leveraged traders. They are buying in at the low and will go full steam by the summer.
And Bitpanda (+Bitpanda Pro) is down...
Bitcoin crashing will teach Elon not to mess with crypto, could risk his company into a very bad cash position
Who knows for sure, maybe he did sell Tesla's positions and is buying back when the price hits rock bottom. There have been heavier crypto price drops and people are initially traumatized but when the price starts climbing up again everybody jumps in and the mishap is quickly forgotten. There's nothing rational about it.
he tweeted diamond hands like 30 min ago...
The stock should drop based on the increased risks and volatility of bitcoins
tHe FutUre oF fINanCe
wazirx is down too.
So is Gemini.
Never attribute to malice that which is adequately explained by incompetence.
Watching the absolute freefall of the crypto market on coinmarketcap is rather entertaining. Glad I cashed out ~10 days ago, even if I missed out on some gains.
That's great; can you use the money to do something useful now and stop supporting this garbage?
Dear dev team... please get back to work. Our brick & mortar business is still humming along, paying your salary and needs your help... and you now need us to 'buy the dip'.