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Comment by seldo | Hacker News Reader

I mean, MtGox stands for "Magic The Gathering Online Exchange". They were literally set up to sell trading cards. The whole "being the biggest bank in a new $6bn+ economy" is a pivot. The whole system is crazy. But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out.

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But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out.

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?

But that's regulation. And HN is against that. Get with the program.

It's not just regulation. It's basic accounting. If you're not doing it, you literally don't know how much money you have. It's always a good idea to know how much money you have, even if the government doesn't require you to know.

You clearly haven't been dealing with businesses. 99% doesn't do daily checks. Many notice thins after a month or so, when closing books for month. And some notice those kind of things aften closing a year. But there still are many businesses which won't ever notice or care missing 100 grand. Been there and done that, and it's much more common than you think. In some of those cases I personally think that the business is partly illegal and bookkeeper is cooking the books. Therefore they don't even notice honest mistakes. I have seen same thing happening over and over again. People don't care about money. And this is business as usual.

Reconciliation is a fundamental operational procedure of financial entities. It's how they find system failures, process failures, fraud, etc. You take feeds from various systems and correlate them. It's not super complex, but it is fundamental.

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.

If this is really is business as usual, then it might be acceptable for a widget selling company but completely unacceptable for financial services. In financial services the same actions that you describe are gross negligence that (depending on jurisdiction) can mean personal liability, possibly including criminal charges, for the relevant CxOs, and a lifetime ban from running any other financial companies in future. You can't entrust consumer's money to companies being run like that, it's pure nonsense.

You think that Goldman Sachs, for example, had exactly 263,674,000,000.00 of cash and cash equivalents at the end of 2012? You don't think that's likely rounded to at least the million?

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.

Auditing standards at large banks have a materiality threshold. At a Goldman or Morgan Stanley, that threshold approaches half a billion. But that's at the top layer, on top of many other layers of accounting. At the level of individual customer accounts, even small discrepancies would be caught.

Any sort of financial account should be ACID safe. You can't just receive money on one end, and then it magically doesn't enter a client's account.

Bitcoin is great, but the exchanges still suck.

Except things like ATMs are not. They use eventual consistency.

Very few financial systems are ACID. Why do people still think banks run on bloody MySQL?

I love a non-sequitur as much as the next giraffe, but what does banks using MySQL have to do with banks choosing not to go ACID?

Nothing at all other than the ever surfacing assumption by a lot of people that financial traffic is done on ACID like principles (rather than eventual consistency which it actually is). MySQL was a random example as should have been somewhat obvious.

MySQL is a random example of financial traffic not following ACID principles? I still don't understand.

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.

You clearly haven't been dealing with businesses. 99% doesn't do daily checks.

No way. Not on fin-co ops.

That's like a car tire store without a pressure guage in shop.

That makes no sense. It is self-regulation. Balancing the books is in their best interest.

You mean without regulation, companies could effectively steal money from you and you would never be able to stop giving it to them? The free market is also regulating, by the way, and it should regulate with its full force against companies like this that fail to provide adequate customer service and satisfaction, safeguards, etc to their customers... we don't need the government to tell us these people aren't doing their jobs effectively and we should take our business elsewhere.

I'm keen to learn more about self regulating free markets. Please provide an example.

I saw somebody today snarking about Bitcoins being Dunning Krugerrands. Coinbase appears to be making their point for them.

Aww, you guys are so cute. You think banks have this stuff under control? Auditors will "find" hundreds of millions of dollars of missing assets on the regs.

Many banks are powered by duct tape and loose Excel spreadsheets. That's why things like Basel exist.

That's really not true. Yes, auditors do find missing assets like that, but some of these banks have trillions in assets. Moreover, these errors usually aren't things like cash in versus cash out. Accounting and tax rules are very complex. So an error might entail having incorrectly computed the value of certain tax assets or the like. More to the point, a major bank will have layers and layers of accounting controls intended to catch even very small errors. These processes are themselves audited every year, and stress tested. It's not duct tape and excel spreadsheets.

Worked at a bank. They have better processes than this. Not gonna say they're perfect, but they can handle balancing their books and not dropping transactions. They certainly don't use a non-ACID PoS like Mongo.

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.

Worked at a bank as what? Working at a bank clearly doesn't make someone an expert on their IT infrastructure. The actual financial transaction infrastructure isn't ACID.

As a software developer on corporate credit card applications, dealing with managing transactions, accounts, and restrictions. Our infrastructure was ACID. We certainly wouldn't have used experimental, flaky datastores like Mongo, and shit was not processed using Excel.

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.

Yeah, so, you don't work on financial infrastructure. That stuff is almost exclusively eventually consistent. And I wasn't arguing that you should use MongoDB or anything else instead. Merely that claims that ACID is the holy grail of financial software is a myth propagated by people that do not know how international financial traffic works.

> Auditors will "find"

Does Coinbase have external auditors?

MtGox is something like 5 months behind in withdrawls with no confirmed date of when it will occur. I'm waiting on $600 since beginning of Sept...

If this is not some sort of error, MtGox is a ponzi scheme.

I can't remember where I read this and I don't remember all the details, however: As I understand the problem is mainly with USD withdrawals to USA, and the problem is not with MtGox but rather with the bank they use having some legacy issues and that they can only process X transactions a day in batch. Or something to that effect.

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.

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