High Volatility Triggers Pauses
Coinbase is one of the largest, and simplest to use cryptocurrency exchanges in the world. Coinbase is reported to have more than 13 million users that own, or trade cryptocurrency on their platform. The goto spot to buy cryptocurrency during the 2017 bubble, was Coinbase. Near the end of the bubble in December 2017, Coinbase volumes reached all time highs, and their technical infrastructure felt the strain. Coinbase stopped trading on December 22, 2017 after a particularly high volume trading period.
“If it happens once, it’s a mistake. If it happens twice, it’s a choice.” – Proverb
The idea is that Coinbase should have the foresight, and resources to patch their system and prepare for periods of high volatility. Dynamically scaling computer systems to meet demand is a regular, and well established practice in the tech industry. Coinbase declared their trading system unusable due to technical issues several times in 2020 after periods of high volatility. This fact is triggering high levels of suspicion in the cryptocurrency community.
Trading Stops Trigger Suspicion
It is very common practice in tech businesses to make sure your systems can scale up to meet demand. It is then very odd to think that there have been multiple technical failures since March 2020 on Coinbase. These technical failures cause frustrations for traders wishing to either buy or sell bitcoin during these periods. The price of bitcoin and other cryptocurrencies can change very rapidly. This is why exchange uptime is one of the most important metrics to think of when choosing an exchange. Furthermore, not being able to take the action you want to, when you want to take it decreases trust. It doesn’t matter so much the reason why the trading stopped. At the end of the day, a trading pause is certainly enough reason to prompt many users to look for more reliable exchanges.
Coinbase Growing Pains
Coinbase is a pioneer in the cryptocurrency industry. Having been started in 2013, they’re one of the longest running, and most reliable exchanges in the world. It is entirely possible that what Coinbase says is true. Technical errors can, and do happen. We hope, as Coinbase users, that every measure is being taken to remedy the causes of the temporary outages. Perhaps, we can chalk up the outages to simply be growing pains on the Coinbase journey. We certainly want Coinbase to have near 100% uptime. What many people like about cryptocurrency, is the 24/7 action. We don’t get to trade cryptocurrency at all hours of the day if there is a shutdown pattern after volatility occurs.