Coinbase Outage Is A Reminder To Not Store Bitcoins on an Exchange or Online Wallet Platform
When it comes to embracing Bitcoin, regardless of whether you believe in the coin, the ideology, or the technology, there are always certain unwritten rules to keep in mind. First and foremost, the end user is in control of their funds at any given time, which also means they bear the full responsibility for what […]
When it comes to embracing Bitcoin, regardless of whether you believe in the coin, the ideology, or the technology, there are always certain unwritten rules to keep in mind. First and foremost, the end user is in control of their funds at any given time, which also means they bear the full responsibility for what happens to their bitcoins. Storing them on an exchange or online wallet provider may not be the best idea, since doing so means giving up that control while still holding responsibility.
Coinbase Outage Leaves Funds Inaccessible
Earlier today, Coinbase.com became inaccessible for users all over the world. Coinbase is well-known among digital currency enthusiasts for their Bitcoin exchange service, as well as providing an online Bitcoin wallet. Combining both of these features creates an all-in-one package for the aspiring Bitcoin enthusiast.
That is until Coinbase.com goes down completely. While short outages of a few seconds are not uncommon due to the nature of the Internet, anything beyond the time limit of 3 minutes is worrying. Especially worrying if the platform you are trying to access handles your personal finances, or, in this case, your bitcoins.
Bitcoin’s somewhat checkered past also plays an important role in the mindset of most digital currency enthusiasts. The year 2015 has been riddled with attacks against several Bitcoin exchanges, and many people fear the Coinbase outage could be the result of yet another attack against a Bitcoin-related service.
The recent outage of another major exchange over the course of the weekend is instilling a bit of fear in the Bitcoin users’ hearts as well. On July 10th, the Bitfinex Twitter account acknowledged their web frontend was inaccessible. It turned out a major DDoS attack was the cause of the problem, and matters were resolved fairly quickly.
The Coinbase outage, however, is not the result of a DDoS attack, nor does it seems to be the result of a hacking attempt. According to the Coinbase Incidents page, a connectivity issue with the primary database server is resulting in unscheduled website downtime. Engineers have been working on the problem for the better part of an hour, and successfully managed to solve the issue.
“Site connectivity was lost when the connection between servers was physically interrupted. The investigation revealed that a cable, which was routed via an open-air above-floor chaseway, was installed with inadequate strain relief on both ends. When an administration subsystem lost transport synchronization due to multiple redundant installations of EtOH, the resulting hard crash failure of this administration subsystem caused physical displacement of the aforementioned cable. Displacement of the cable created an unseat condition in both end connectors, causing a disconnection of the site’s database link.”
Even though Bitcoin is all about decentralization, most Bitcoin users still rely on central services like exchanges and online wallet providers to store their digital wealth. Once again, this can be partially attributed to the way our society has evolved into a lifestyle where convenience trumps fidelity and security.
Storing your bitcoins on an exchange or an online wallet provider is not a good idea. Centralized services can go down at any given time, which is what happened to Coinbase today. Because of that outage, customers could not access their stored funds in either Bitcoin or fiat currency until the matter was resolved.
There are plenty of Bitcoin wallets in existence that put the end user in full control of their funds at any given time, without relying on centralized servers or services. Most of these wallets — which are available for desktop, laptop or mobile — will ensure only the end user knows the private key(s) associated with their account.
Such an additional layer of security is one of the main reasons technology experts are being drawn to Bitcoin. Our current financial infrastructure is centralized, locked down, and puts other people in charge of our money. Bitcoin is doing the exact opposite, by providing security, transparency and giving financial control back to the people it belongs to.
Where do your store your Bitcoins, and why have you chose for that option? Let us know in the comments below!
Source: Coinbase Incidents Page
Images courtesy of Coinbase and Shutterstock