Bitcoin and Ethereum Just Crashed, Taking Coinbase Down with Them | Hacker News Reader

Bitcoin and Ethereum Just Crashed, Taking Coinbase Down with Them

fortune.com

31 pointsljf30 comments

The real news is that Coinbase can't handle traffic spikes induced by micro panics.

But this was a correction, not a crash. The price of BTC only dropped below the 10-day moving average and remains well above the 30-day moving average, which remains well above the 50-day moving average, which remains well above the...

A chart http://imgur.com/a/TkilO built with Bitstamp's tradeview. [0]

Disclaimer: I don't own any BTC.

[0]: https://www.bitstamp.net/market/tradeview/

Added question: In the case of a Coinbase crash, can't Coinbase customers use their private keys to make transactions on other exchanges or are they somehow locked into using Coinbase? I always thought you could happily store your credentials on paper and do business wherever, however.

It's down 17% from its highs a couple days ago. That's not something to blow off.

If this was the stack market or the dollar people would be screaming for HFT heads. Just look back to the flash crash that didn't even last a day.

Bitcoin isn't a market or national currency. Bitcoin in more like a highly volatile equity or commodity. If the price of a volatile stock jumped from $21 to $30 in a week, and then cooled off to $24 two weeks later, no one would call it a crash.

Just add to zeros to all those number, and that's exactly what happened to Bitcoin.

Speaking purely from the perspective of someone who holds a small sum of BTC, this seems totally normal and honestly predictable. Again, I'm not an econ guy so this may be naive, but BTC strikes me as just crazy volatile and runs at break-neck speeds. Instead of having a great-depression or recession last years, it last a couple weeks to a month... ditto for bull markets.

This month, BTC->USD rates have hockey-sticked, people on /r/bitcoin were cheering. This happens cyclically and is a signal that it's time to sell and buy the subsequent crash or wait it out until others do.

It certainly feels like a correction.

> If this was the stack market or the dollar

The US market and dollar are much larger entities with a lot more inertia. Bitcoin is roughly comparable to a single major company, and big swings in the share price of individual companies, even major ones, are relatively common.

No, the coin you have in an exchange is theirs. You don't have those private keys. And the coin can move around. Coinbase actually flaunts this as a feature (you can give money to other Coinbase users without using the blockchain). This is also why they won't accept generated coins from mining payouts.

There is a lot of exceptional fintech talent out there, finance probably has the deepest tech talent level of any industry. But if you look at the tech stack and skills they are looking for for Sr Software Engineer, it looks like they are hiring for a web app: "Ruby, Node.js, PostgreSQL, MongoDB, Redis"

Sorry, you can't build a financial exchange on Ruby, Node, and Mongo.

Get some real fintech people in there with a real tech stack - core Java (not some Swing framework junk) and c++ mostly - and let them do their thing.

These are fairly well understood problems. I don't understand how they can run on such a terrible infrastructure and still be considered a leader.

> Sorry, you can't build a financial exchange on Ruby, Node, and Mongo.

To anyone doubting this (particularly the MongoDB part): it has been tried before, with bad results. Look up "flexcoin".

To me, MongoDB is the most shocking aspect of their stack. What are you doing with a non-ACID compliant database?

I've personally had a transfer of ETH worth tens of thousands of dollars just go missing, despite 30+ confirmations on the tx on the blockchain itself, which took about 48 hours to resolve with their support team. If you can't credit your clients properly despite the fact that all transactions send/received are on the goddamn blockchain, you're doing something wrong.

There is a thing in trading we call a drop copy that is basically a side channel verification of trades (besides the normal execution messages you get in the order stream). House trades and street (market) trades are constantly being verified and double checked against each other.

I'm surprised they don't have something similar to catch these errors.

> Sorry, you can't build a financial exchange on Ruby, Node, and Mongo.

You can build a financial exchange on pen & paper, so you can probably do so on Ruby/Node/Mongo/Postgres/Redis.

Those might not be the best choices for a tech stack, though, but there's a difference between “can’t” and “shouldn’t”.

"Crashed". Ethereum is still up $70 compared to last week. Up $269 compared to last month. This is not a crash.

Linkbait. That's not a crash... it can go down a few percentage point in a day but the long term trends all show increases.

Over the last week it's still better that what index funds have done in the last compounded 2 years.

It's a currency. It's not supposed to go up and down like a stock. It is supposed to remain stable.

It was supposed to be a currency it's a commodity.

This explanation I can buy. Nobody is treating like a currency. They keep wanting it to appreciate because they see it a cool tech-related commodity.

Agreed. Seems like its a commodity to be traded, a black market currency for criminal activity (i am not bothered by this), a currency for countries that need a way to buy goods outside there normal means. All the currency aspects are really cool especially as a means of freedom BUT its value is 100% based on speculation and trading not because of real value.

It is cool and i am not hating on it and people are getting rich from it but it's value isn't because all of a sudden average people are using it to buy groceries or pay their bills.

> isn't because all of a sudden average people are using it to buy groceries or pay their bills.

Now that it's in the media: why couldn't this quickly and quietly become reality?

I'd argue that crypto currencies are a fundamentally new asset class, neither fish nor fowl. To become a useful "currency," yes, stability is a desirable quantity. What it is "supposed" to do is not a useful concept here. What it does is much more important. Currently, bitcoin is still more a highly-speculative, bubble-prone asset class with some of the qualities of a currency, some of the qualities of a stock, and some of the qualities of an asset like gold. It is incorrect to pigeon-hole it as any one of these.

I suspect that's related to the high degree of speculation and the lack of commodity backing.

If you had a stock that was at $750 in January, hit $3000, and adjusted to $2500 today, you would never use the words "crash". Clickbait much?

For cryptocurrency, yes. People love to hate it.

But you would be using words like bubble, manipulation, HFT scam. The meteoric rise is a little unsettling. What would a proper correction and breathing point be? 2000?

[Removed rant in which I was trying to explain my frustration about investors having ill effects on the usability of such protocols by driving up associated fees. Unless you can mine coins, you are stuck dealing with a volatile market as an entry point, which blows. But nobody cares about that. So never mind]

Why should he have to know what an adversarial network our the other technologies are to trade crypto-currencies? That's like me complaining that people investing in the dollar or stocks don't understand the intricacies of the Fed machinations or NYSE complex order types.

Journalists who report on cryptocurrencies will have one of the safest careers ever.

Every day is either a "crash" or a "bubble", throw in a few comments from market leaders and thats an article right there.

Yesterday:"The cryptocurrencies’ prices bounced back later in the day. As of 6 p.m. Thursday, Bitcoin was down less than 3% and Ethereum was down just under 8% over a 24-hour period."

BTC is now $2,484

People here are misunderstanding what a currency is supposed to do.

It isn't like a stock. Equities going up is good and will have periodic retreats. It is a company and supposed to gain in value.

A currency is a medium of exchange and unit of account. It is supposed to remain stable. It shouldn't go up or down like equities. It should be stable. The unit of account changing would be like a unit of length changing. Try building a house if your measuring device was constantly changing in you.

They aren't try to have a currency. They are trying to build a network and sell shares of that network backed on the term "currency".

Currencies always go up or down based on trust in the currency's backer; in their ability to perform. Thus as the US Dollar (USD) went up against the British Pound Sterling (BPS) when Brexit was declared the course to go, the USD has fallen as more business uses for the Blockchain (BTC, ETC, LTC, etc.) have become viable and implemented: trust decreased in the UK's ability to govern and produce stable storage of value in the BPS, trust increased the Blockchain's ability to store value through entrenching itself in everyday business.

All currencies live and die on market pressures which require societal trust. An exchange of one currency for another is an exchange in preference of trust. Stock is the exact same thing, with the value a measure of trust in the given corporation and the viability of it to survive in a given economic, industrial, or political environment. To equate that they are different is to speciate an argument for why one set of matter and social construct is eternal in nature and the rest are mortal in nature: it is a highly opinionated point which one must make which in itself proves that the argument is false.

Reply on news.ycombinator.com