Coinbase Raises $25 Million From Andreessen Horowitz

http://blog.coinbase.com/post/69775463031/coinbase-raises-25-million-from-andreessen-horowitz

by espeed • 13 years ago

193 140 13 years ago

blog.coinbase.com

We are hiring for lots of positions. If you are interested and enthusiastic about bitcoin (or just curious), please take a look:

https://coinbase.com/careers

preech99• 13 years ago

When are you going to add altcoins support? Also, why can't I import privkeys like I can with blockchain.info?

Finally, your API documentation is out of date and the examples don't accurately reflect the data that Coinbase sends in response.

ejhong2• 13 years ago

You can import privkeys. It's kind of hard to find though - you have to go to account -> integrations and look for the paper wallet import.

3pt14159• 13 years ago

I don't think they should offer alt-coins, it sends a fragmented message in a time that most consumers are already overwhelmed.

Einstalbert• 13 years ago

I don't have any applicable skills for the team, but the company perks remind me of a fun start-up that wants its workers to work their asses off (free lunch and -dinner-? Better throw in the Dr. Pep). I like that. Hope you guys do well.

jagermo• 13 years ago

How do you feel about translating? I have some capacities free and help you conquer Germany, Austria and Switzerland...

robinhoode• 13 years ago

All your positions are in SF :(

Would you be interested in a remote (east coast) Rails engineer w/ 8 years experience?

barmstrong• 13 years ago

Yes, we have some remote engineers also. We should probably reflect this better on the careers page. Sorry about that.

krashidov• 13 years ago

Have you guys thought about an internship program?

weekendcoder2• 13 years ago

With an increasing number of Bitcoin based startups raising substantial capital, there might be an incentive to keep the price of Bitcoins high.

Launching soon: http://www.codeforbitcoins.com/

wesley• 13 years ago

I believe there is an alt-coin named "devcoin" that has similar intentions as you do (but they obviously pay in their own alt-coin)

weekendcoder2• 13 years ago

Thanks, good to know!

gexla• 13 years ago

Well, there's another vote of confidence in Bitcoin. It seems to be a battle of good and bad press. Ultimately, I don't think it matters. The votes are in and the people have said they want virtual currency. If it's not Bitcoin, next man up.

rch• 13 years ago

Not sure what to make of the alt-coin thing. Is there an algorithm that favors FPGAs?

Hermel• 13 years ago

Digital currencies are a classical winner-takes-it-all market. There is not much room for alternatives besides Bitcoin. Also, Bitcoin has a huge lead - an altcoin would have to be fundamentally better than Bitcoin in order to take over. Similarily, TCP and SMTP have both never been replaced by newer protocols. I suspect the same to be the case for Bitcoin.

Also, revising the core of Bitcoin in any significant way will be prove at least as hard as replacing IPv4 with IPv6.

EdJiang• 13 years ago

Most altcoins use scrypt instead of SHA256, so that it's harder to make FPGAs/ASICs, thus relatively easier for people with GPU/CPUs.

This is because if only people with specialized hardware could mine, the network could be more vulnerable to 51% attack from a well-funded team, versus when every person with a graphics card can mine.

See https://litecoin.info/Comparison_between_Litecoin_and_Bitcoi...

kordless3• 13 years ago

There are basically two hashing algorithms for cryptocurrencies: SHA-256 and scrypt. SHA-256 is the one used for Bitcoin and its derivatives. Litecoin uses the scrypt algorithm, as does its derivatives, like Worldcoin. There are a handful of other proof of work algorithms as well used by a few other currencies.

Side note, check out namecoin: http://en.wikipedia.org/wiki/Namecoin. It's based on SHA-256.

scrypt uses the SHA-256 algorithm for hashing the blocks, but the caveat is that it also uses a high number of read/writes to RAM. In fact, there is very nearly parity to the number of compute cycles to read/writes cycles. Here's the paper on it: http://www.tarsnap.com/scrypt/scrypt.pdf.

In order to build an ASIC miner for Litecoin, one would have to build a circuit that had a massive number of CPUs encrusted with a fairly massive amount of fast RAM. As this more or less describes a video card, whoever designs an ASIC for Litecoin will have a nice challenge in front of them.

Edit: Working URLs

argumentum• 13 years ago

That's the brilliance of Coinbase .. it's not tied to BTC, in fact the creator of Litecoin is part of their team now. They are building an infrastructure layer for cryptocurrency, period, and they seem far ahead of any competitors atm.

infruset2• 13 years ago

Could you expand? It seems they only handle bitcoin on their main page

simbolit• 13 years ago

do you really think that in the hypothetical situation of a major bitcoin crash litecoin will still stand? i think this highly unlikely. imho all the altcoins derive their value from the faith of people in bitcoin and by association in crypto currencies. the big one fails, all of them fail.

parham2• 13 years ago

Just found out about coin base. I couldn't find a way to deposit BitCoin directly to my account, is there a reason for this?

cdash2• 13 years ago

It doesn't seem to be advertised well on the main page but you can go to account settings and then bitcoin addresses to see addresses associated with your account you can send your btc to.

mrb• 13 years ago

Yes that's the way to do it. No need to "request money" as explained by someone else.

christiangenco• 13 years ago

Click "request money", then leave all the fields blank and click the blue "request money" button in the popup modal again. It'll give you a deposit address.

Completely intuitive - I know.

parham2• 13 years ago

That is a serious flaw. I was thinking they had evil intentions.

coderdude2• 13 years ago

Coinbase is cruising at escape velocity. I signed up for an account around the time they launched. I had some questions about button creation so I emailed them. In response, Brian (the founder) coded up a button API to make it possible to generate payment buttons on the fly. Needless to say, the show of dedication was impressive. Congratulations to the Coinbase team.

leokun2• 13 years ago

What does "Coinbase is cruising at escape velocity." mean?

coderdude2• 13 years ago

They're growing very quickly.

davidjgraph• 13 years ago

I would avoid any company "cruising _at_ escape velocity". Approaching it, fine, but at that specific velocity it's downhill from here.

For definitions here let's have Wikipedia[0] and Oxford dictionary[1]

0. "escape velocity is the speed at which the kinetic energy plus the gravitational potential energy of an object is zero. It is the speed needed to "break free" from the gravitational attraction of a massive body, without further propulsion."

1. "a speed for a particular vehicle, ship, or aircraft, usually somewhat below maximum, that is comfortable and economical"

An object travelling at escape velocity without further propulsion will just (only just) escape the gravitational pull of the contextual body. That means by the time it's distant enough from the body for the gravitational forces to be trivially weak, it's going damn slowly.

This means the company is slowing down continually, relative to that body.

In terms of whether you can "cruise" at escape velocity, I don't think so. Going at escape velocity for as much of the journey as possible would require a huge propulsion at the start, with a very high initial speed and use of fuel. I suggest cruising would actually be when you spend most of the journey below escape velocity by applying propulsion more steadily. The maximum velocity experienced in the company would be lower (comfort) and less fuel would be used.

The other downside of always being at escape velocity, unless the destination lies at a distance from the body where there's still a relatively non-trivial gravitational pull left, there's a good chance you'll die before you get there.

[0] http://en.wikipedia.org/wiki/Escape_velocity

[1] http://www.oxforddictionaries.com/definition/english/cruisin...

sjtgraham• 13 years ago

Congratulations, you have won the award for the most incredible semantic nit-picking of recent memory.

baddox2• 13 years ago

This is a perfect example of the fallacy of equivocation:

http://en.wikipedia.org/wiki/Equivocation

wellboy2• 13 years ago

That's a figure of speech dude!^^

What he said was that they are cruising...like super fast, but he wanted to make it a bit funkier.

tga2• 13 years ago

This would be a good time to spend some of that money on building up the customer support.

I gave them a try and for my first purchase I received BTC at a significantly higher rate than they quoted and confirmed. To make things worse, I still have no reply on the support ticket 10 days later. Not exactly what I'd expect from a company handling significant amounts of money in a market that's struggling to gain recognition and trust.

coinbase-craig3• 13 years ago

On rare occasions we are not able to provide bitcoin at a locked-in price. When we can't, we offer the ability to place an order in USD for an amount of BTC equal to the exchange rate at the time that we receive your USD from the bank, 4 business days later. When this is offered as an option, we display a note on the buy page that says: "Note! We've exceeded our normal buy limits for today. If you would still like to purchase you will receive the market price of bitcoin on [some date] after your funds have arrived." You are also required to agree to a term like this before placing an order: "I acknowledge that the amount of BTC I receive will vary based on future exchange rates." Some users check the box without reading it; maybe this happened to you.

We're trying very hard to scale our support team. We've gone from 1 to 12 support in a matter of months, and we are hiring more support staff, and it is still difficult to keep up. We are responding, but it is almost impossible to grow fast enough. That said, 10 days sounds way too long. If you send your coinbase email address to me at craig(at)coinbase, I'll get your ticket prioritized.

tga2• 13 years ago

Thanks Craig, posting about my personal issue here feels a bit like cheating, but it was nice of you to jump in. I can imagine support is already a priority, but consider this my nudge about it.

simonebrunozzi• 13 years ago

Craig, on another note: I am based in SF, and I'd like to get in touch with someone at Coinbase (I am writing a book on Bitcoin). Can you help?

polarix• 13 years ago

I've also had tickets dropped on the floor (explicitly, actually), and the email reply address bounced. FYI.

Also, I can't find any way to open support tickets any more. FYI.

I really wanted to like you guys, and I field a lot of questions about how to buy these days.

Dilan• 13 years ago

I'm considering to apply for the support position, is there anyone I can speak to for more information?

jessaustin3• 13 years ago

...at the time that we receive your USD from the bank, 4 business days later.

Is there really no faster way for coinbase to receive a payment? This doesn't seem practical, or rather it seems a bit too practical for a company that wanted to set up a one-way "pump" to profit by alternatively: immediately completing, or stretching out, transactions based on which action pulls value directly out of the customer's pocket.

kolev6• 13 years ago

Yes, but there are situations where you don't honor the confirmed price even for instant buy purchases or sales. You can read about my experience below in a separate thread!

kissickas2• 13 years ago

I'm not sure if that's better or worse than my experience, where my order was cancelled altogether, freezing ~$1800 in my bank account for six+ days only to return the money because it was "too risky." I'm not interested in doing business with Coinbase anymore.

vtmountainman2• 13 years ago

that seems to only happen when they can keep your coins and profit due to rising prices.. basically giving themselves a free loan and free coins.. super scammy.. I had made 20 purchases with them, and then initiated a buy at $180.. by the time i became "high risk" it had rocketed to $400+.. i've heard they honor these prices but they have failed to respond to my emails for months.. They selectively scam their customers.. I quit giving them business too and wouldn't advise anyone to do business with conbase.

japhyr• 13 years ago

Who deemed the transaction "too risky"? Coinbase, or your bank?

vtmountainman2• 13 years ago

their support is the worst i've ever had.. over a month for a response then i got a response, "if you still need help please reply"...

pretty crappy for the 2nd most interesting startup of 2013 according to time magazine.

bfell• 13 years ago

I wholeheartedly agree with this - it's been 3 weeks since bitcoin "disappeared" from my account and still no response from Coinbase despite multiple requests from me.

ebspelman• 13 years ago

Same exact thing here.

baddox2• 13 years ago

That's not primarily a customer support issue. It's an issue with them deliberately concealing exactly what will happen when you choose to take an action on their website, and in some cases blatantly lying about what will happen.

bensw• 13 years ago

Have had a very similar experience. Haven't heard a reply for nearly a month.

shizzy0• 13 years ago

I had a similar experience a while back where it seemed to be the case that I ordered 1 BTC, but then only received ~0.7 BTC because the exchange rate had changed. More recently, however, when I've ordered 1 BTC I received 1 BTC x days later even though the exchange rate had changed (and not in coinbase's favor). So it seems like they've changed how they deal with the large latency in transactions--for the better.

Also, they're doing something called instant pay, which could help normalize expectations of what happens when you buy BTC. I wonder how that works with credit card charge back problems?

salient• 13 years ago

This is why the start-up environment sucks in Europe. It seems so (relatively) easy to get $20 million in US as a start-up, while it seems almost impossible to get that kind of money in Europe from an investor, which is why there are so many "winner takes all" companies from US and not from other places.

This happens at a time when Bitstamp is several times bigger than Coinbase, also growing fast, and is covering both EU and US. Yet, because of this sort of funding (and probably more later), there will probably be yet again a US company dominating the scene.

In a post-Snowden relevations time, I'm not very eager to continue using US services, but the environment seems to be so harsh for non-US companies that want to be global companies, and they basically have to grow themselves into global companies only through bootstrapping (the vast majority of them, I'm sure there are a few exceptions).

skrebbel• 13 years ago

Do most US investors care whether or not the companies they find are in the valley, or even on the same continent?

(note: no value judgment here, I really don't know and I wonder)

ig1• 13 years ago

It depends on the VC and the size of the round, some VCs only invest in a very specific area while others are more flexible for larger investments.

Most of the major VCs do invest internationally in larger rounds. For example in the last year Greylock invested in Wrapp (SWE), Sequoia invested in 6Wunderkinder (DEU) and Skyscanner (GBR), BVP in NewVoiceMedia (GBR), USV in Hailo (GBR) and FundingCircle (GBR), IA & Valar in TransferWise (EST/GBR), etc.

nasalgoat3• 13 years ago

Yes, there is a massive bias against tech companies not in the Valley. My company, based in Canada, recently finished a $50M Series C road trip that included the Valley and New York, and the contrast between the two could not be any larger.

The Valley VCs and investors were dismissive and incredulous that a Canadian company could achieve the success we had, and that we could find people "good enough" to make systems able to handle the kind of traffic we were running. They genuinely couldn't believe we'd done it outside of California.

New York, however, was much more interested and receptive, and ended up being the best source for our future funding.

This whole business is less about numbers and reality and more about feelings and who you know than anyone wants to admit.

pbreit3• 13 years ago

Absolutely. Investors like to be close to their investments for obvious reasons.

wellboy2• 13 years ago

This will be the third YC billion dollar company and 1 Bitcoin will be worth $50,000. Wait 1 year.

TimJRobinson• 13 years ago

I still wonder why I as a buyer would choose to buy through coinbase rather than PayPal or just credit card.

For sellers it is awesome and I know how bad PayPal is for sellers so I understand that.

But as a buyer if I don't care about being anonymous why would I spend a currency that is deflating and has no safeguards or way to charge back when I could just use fiat, have safety and feel better knowing the money I just spent won't be worth 10% more tomorrow.

phoboslab2• 13 years ago

Porn.

Though I'm wondering why Bitcoin adoption in the porn industry still seems to be so slow. Usually they're the first to jump on new technology.

laichzeit0• 13 years ago

I want to laugh but you're absolutely right. Military and pornography applications are the driving forces behind any successful technology.

leokun2• 13 years ago

Eh, if you're trying to be anonymous your ISP is still tracking what you are watching. If you run a proxy on a server somewhere that provider is tracking it. If you're using anonymizing software your connection will be slow, but that might work.

Also the websites that provide the type of content you're referring to like to gauge people with expensive subscription costs and I'm not sure how you can set up a subscription service with bitcoin.

acangiano• 13 years ago

Sexcoin. It's Bitcoin marketed at the porn industry. Its value ($0.10) will go greatly up, IMHO.

GrinningFool• 13 years ago

As a buyer, paypal is horrible too.

Particularly when they conveniently decide to suspend the ability to immediately xfer payment out of a verified bank account, leaving you with a 3-5 day electronic check or signing up for "bill me later" as your only options for making a payment when your balance is 0. I'm sure it's all about fraud detection, and nothing to do with selling more people on "bill me later".

"has no safeguards or way to charge back when I could just use fiat, have safety and feel better knowing the money I just spent won't be worth 10% more tomorrow."

Indeed. This is what keeps me out of cryptocurrency. In spite of how crappy paypal is (or can be) for buyers.

goodside• 13 years ago

It doesn't matter that PayPal or credit cars are hypothetically more convenient for you as a consumer. The reason you don't buy with PayPal/CC is that nobody will sell to you.

PayPal has explicit policies against buying virtual currencies and they will cancel your payment if it's brought to their attention, screwing the seller out of their Bitcoin. Similarly, credit card transactions will be reversed if later found to be fraudulent, and there's no way for the seller to be completely sure your card isn't stolen. So the status quo is that nobody sell Bitcoin for credit, and if anyone were to start they would be a lightning rod for CC thieves, since Bitcoin is by far the best thing to buy with stolen credit if you have the option.

aestra• 13 years ago

The parent wasn't asking why they can't buy bitcoins without paypal/CC, they were asking why they would use bitcoins to buy something instead of paypal/CC.

bdcs• 13 years ago

You can get a 3% discount by using Bitcoin:

Coinbase (-1%) -> Gyft (+4%) -> Amazon/BurgerKing/Sears/GAP/Groupon

All transactions have a ~3% credit card tax (even if you pay with cash). With Bitcoin, you can avoid this tax and get the discount.

Try sending money to a family member in Africa, then understand why PayPal and credit card are bad.

If you have qualms with bitcoins (the unit), then hold them for less than a minute and don't expose yourself to the exchange risk as you use the Bitcoin payment network to transfer value.

Finally, Bitcoin is FAR FAR from anonymous, it is as public as it could possibly be (everybody everywhere has an index of every transaction!!).

Thank you for your comments, I hope mine helped.

Istof2• 13 years ago

but it is much safer to purchase your bitcoins with escrow, credit card or paypal.... 3% could be made back on a cryptocoin exchange in one day.

tocomment2• 13 years ago

Would it be possible for CoinBase to have some kind of FDIC like insurance? It seems like that's the biggest problems with bitcoins these days is that there's no safe place to store them.

natrius2• 13 years ago

The purpose of deposit insurance is to prevent runs on banks that make loans and don't have as much money in their vaults as the total of their customers' balances. Coinbase does not make loans. As far as I can tell, it's a service that stores your actual bitcoins for you. FDIC-style insurance isn't applicable.

tocomment2• 13 years ago

Very good point. But I still think the bitcoin ecosystem is missing a foolproof way to securely store bitcoins in the way that US dollars have a bank.

Paper wallets can get lost or stolen, A lot of online wallets get hacked, and DIY encryption doesn't seem like a great way to go either, especially for grandma.

I'd happily pay a fee to coinbase in exchange for some kind of insurance against them being hacked.

bachback2• 13 years ago

The major news here is that Bitcoin is corrupting itself by affiliating with major corporate interest. Silicon Valley thinks they own Bitcoin - they will be proven wrong. a fork is becoming more and more likely. Gavin is not treating his responsibilities well and should find himself a well paid job if he wants to make money. there is something wrong with incentives here. Bitcoin is global, not a US owned network.

vidarh• 13 years ago

Bitcoin is not one entity. When someone effectively "creates money" then of course there's a strong incentive for people to build businesses around it.

Things can fork as much as it wants: Any alt-coin that becomes successful will attract people trying build businesses around it.

If you want to prevent people from making money on it, find a means for people to achieve their goals without exchanging anything that can be converted into money. Good luck trying to do that without also making it pointless and/or unusable.

bachback2• 13 years ago

I think you misunderstood what I was saying. I was referring to the fact that the core Bitcoin dev, basically the guy in charge of the network, joined the board of one company in Silicon Valley. If I have a competing business, what do you think his preferences are going to be? So if this continues there will be a fork, so that devs of the protocol are prevented from selling out. I think the core bitcoin devs are really going in a very wrong direction with their affiliations.

kolev6• 13 years ago

To me personally, Bitcoin is dead already. It's turned from a nice idea to a speculation tool. Get Wall Street involved and it will become worse than USD! I won't even mention the fact that China owns over 70% of the market! The whole thing starts to stink badly!

loceng• 13 years ago

I'm wondering how much of this money is invested in Bitcoin itself - how much Bitcoin Coinbase is holding onto or own.

It is a smart way for investors to start gathering Bitcoin.

ashray2• 13 years ago

I honestly doubt that much of this is going into buying and holding bitcoins. Institutional investors are already trading big numbers of bitcoins via Second Market. They don't use regular exchanges and certainly wouldn't need to go through the 'false investment' route.

I do however think a large part of this would go towards Coinbase improving its bitcoin stash. They've been running out of stock every single week.

pbreit3• 13 years ago

Probably zero if Coinbase is operating above board (which I assume it is).

jroseattle• 13 years ago

I question how far the Bitcoin industry can develop without government regulatory agencies getting involved. Granted I don't have a deep background in financial systems, but this seems like more than a remote possibility.

I see a parallel with Bitcoin and the financial system to Uber & Lyft with traditional taxi/limo services. In Seattle, both Uber & Lyft are being hassled by the city since they don't fall under the regulations that apply to taxis and limousines. And truth be told, I think that Uber & Lyft are going to see the regulatory matters eventually impact their operation, rather than going away.

And that's just working at a local level. Payment systems on a worldwide scale? Seems commensurately high-risk, high-reward at present, where the "high" measurement is significant.

wmf• 13 years ago

Bitcoin is already regulated by FinCEN, although AFAIK none of the startups are compliant with the regulations.

cdash2• 13 years ago

Sure, it is regulated by FinCEN but what does that do for me? It seems FinCEN is nothing more than a part of the national security theatre than actually regulations that help me.

jackgavigan2• 13 years ago

Bitcoin is already regulated by FinCEN...

Technically it's not. FinCEN regulates money services businesses and they have decided that people/companies who exchange virtual currencies for USD are in the money services business.

It might sound like nitpicking but it's an important distinction.

7Figures2Commas• 13 years ago

Bitcoin needs more effective mainstream marketing and with $25 million in depreciating dollars, I really hope that Coinbase is the entity that brings Bitcoin to the masses.

I would strongly suggest that Coinbase do an endorsement deal with William Devane and start buying ad spots on FOX News. The script is simple. William rides up on a horse and tells viewers:

I just feel so much more secure knowing that I own Bitcoin. And you can't print Bitcoin. Don't you just love the feel of Bitcoin?

I buy my Bitcoin from Coinbase, because I trust them. No gimmicks. Coinbase will beat any price of any Bitcoin and at any time. Just call em. And Coinbase transfers my Bitcoin in 10 days or less, faster than anyone else. So protect yourself from the problems of the world. Invest in volatility with Coinbase.

With such a compelling commercial[1], there's no reason we couldn't see BTC $1 million.

[1] http://www.youtube.com/watch?v=QCJCcnhbmr0

applecore• 13 years ago

That's about 29,000 bitcoins at today's price.

crassus• 13 years ago

Does coinbase have any intention to switch to a smaller bitcoin denomination at any bitcoin price?

pdknsk• 13 years ago

I wonder if the "12 Days of Bitcoin" on Bloomberg played a tiny part in this. I was watching a segment the other day which had one of the reporters talk about purchasing BTC and mention that Coinbase is very reputable.

http://www.bloomberg.com/video/12-days-of-bitcoin-what-do-yo...

hoka• 13 years ago

Doubtful, I think. Raising venture rounds of any size (especially this one) takes a very long time! Bloomberg may have caught wind of the deal, however, and chose to release the story to capitalize on the press trend.

joering2• 13 years ago

I gave up multiple times on purchasing Litecoins. All I want to do is securely use my american credit or debit card to purchase 200 litecoins at reasonable price and fee. In the world run by bitcoin, is that too much to ask?

aianus• 13 years ago

I think the simplest way to buy litecoins as an American is to buy bitcoins using coinbase and then exchange them for litecoins on btc-e.

scintill76• 13 years ago

It would probably be easiest to buy bitcoins with Coinbase and trade them for litecoins at an exchange. You are going to have a hard time buying any cryptocurrency with a card, because it is too easy for you to reverse the charge and take the irreversible cryptocurrency. The places that let you buy bitcoins with cards are a lot more expensive for this reason.

kolev6• 13 years ago

I both love and hate Coinbase! So far, they've cost me hundreds of dollars. Some may consider it stolen money. I understand the technical issue, but I'm sure when they get adopted by a wider and not-so-technical audience, they may become a target of a nasty class action lawsuit. For example, I bought several times Bitcoin with them, you see the price, then you get a popup to confirm (sometimes the popup shows a different price than what you originally got, but that's fine as it's confirmation page), you hit the button and guess what - after looking in your transaction history, you see you got charged sometimes tens, sometimes - hundreds of dollars more. Basically, the price moved, and they charged you a different amount. No warning, no nothing. Again, I understand why this is happening, but they make enough (1%) to honor the price. As I suspect, sometimes they sell from their own inventory of Bitcoins, so, they don't depend on the market order.

jackgavigan2• 13 years ago

..I bought several times Bitcoin with them, you see the price, then you get a popup to confirm (sometimes the popup shows a different price than what you originally got, but that's fine as it's confirmation page), you hit the button and guess what - after looking in your transaction history, you see you got charged sometimes tens, sometimes - hundreds of dollars more. Basically, the price moved, and they charged you a different amount. No warning, no nothing.

That's shocking (if true).

Recording trades at a price that's different from what the user saw on their screen when they clicked to commit to the trade is pretty fundamental fuck-up. It's a "Drop EVERYTHING! We need to fix this NOW!" kind of problem. There's a good chance that someone's head would roll if it happened in an investment banking/capital markets-type environment.

I know for certain that if it was happening with a bank's online payments service (the sort of thing where you can send EUR from your USD bank account), the service would simply be switched off until the problem was fixed. You'd have to get the legal department involved to notify the regulator and assess the company's liability. You'd have to go through the logs to find every single instance of it ever happening and write to each and every customer who was disadvantaged to inform them, apologise and reimburse them. And there'd be a significant fall-out, with very senior people asking "How the fuck could this happen?!"

I get the impression that some Bitcoin startups have a lot of growing up to do.

kolev6• 13 years ago

Unfortunately, it's true. It hasn't happened just once or twice. They may have some excuse in the ToS, I can't read legalese, but, again, they will have huge issues when non-technical people who are used to the penny-level precision and honesty of banking and stock trading. Same with Bitcoin exchanges. I had Bitstamp incorrectly execute orders twice, which cost me even more than the few dollar rate difference with Coinbase. I won't mention the situation where you have an open position during big movements and their service gets offline and you cannot react. When it comes to money, regulation doesn't seem like a bad idea! All these things added to widespread Bitcoin theft and marketplaces created just to steal bitcoin en masse hurt pretty badly the reputation of Bitcoin!

Coinbase Raises $25 Million From Andreessen Horowitz

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