(Full disclosure: I work at Coinbits.app)
For an asset as volatile as Bitcoin, that's certainly predictable. The combination of a fully predictable supply and a highly liquid market makes sudden price changes more likely due to changes in demand. No other asset has this quality.
In recent weeks, billions of dollars have been invested in Bitcoin ETFs offered by traditional giants like BlackRock and Fidelity. Over the past 24 hours, 10,000 Bitcoins have flowed into the ETF, but only 900 Bitcoins were newly mined. The impending tightness in demand was obvious to everyone.
Then there is the halving, which is an event built into the Bitcoin protocol itself. Like clockwork, every four years the number of Bitcoins in circulation is cut in half.
In recent weeks, we have seen the price of Bitcoin rise sharply. When you combine that historical data with trends in ETF inflows and the impending halving, it's clear that Bitcoin's price has the potential to continue its incredible rise.
You might think that decision makers at Coinbase, one of the world's largest Bitcoin exchanges, would do everything they can to ensure service remains uninterrupted even if prices spike.
That's wrong.
On the day it looked like Bitcoin was finally going to surpass its all-time high in dollar terms, Coinbase not only fumbled Ball and halted trading, but also accidentally zeroed out customers' balances, causing their money to disappear. I made it look like it was.
Coinbase is a trusted US-based company that has made Bitcoin more accessible and secure for more customers than almost anyone else. How can this happen?
One possibility is that the Coinbase team has focused too much on complex and ephemeral “crypto” technologies like NFTs and DeFi. Had fewer engineering resources focused on these casino-like experiences and more resources working on building Bitcoin infrastructure, today could have been a historic day for Bitcoin adoption. yeah. Rather, many end users who are still not very convinced about Bitcoin's potential may have learned the wrong lesson that the cryptocurrency is not yet ready for prime time.
For example, in the fall of 2023, Coinbase CEO Brian Armstrong announced that the company would soon support Lightning Payments. This will dramatically increase the ability of Coinbase users to use Bitcoin as a medium of exchange, allowing more people to adopt and use the most advanced money technology ever invented. After 5 months, Coinbase's Lightning Support is still not available.
Today's failure, call it what you will, is a reminder to technology developers and executives that staying on mission is critical. While corporate malfunctions are not as devastating for financial and crypto customers as they are for the airline industry, they still have a profound impact on people's lives. I hope Coinbase learns from this experience and grows beyond it. After all, it's a great American company built on innovation and grit.
(Full disclosure: I work at a company dedicated to Bitcoin called Coinbits.app. We made a strategic decision years ago to focus solely on Bitcoin because people Get Bitcoin, Spend Bitcoin.)
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