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Comment by apalmer | Hacker News Reader

Its not ridiculous at all.

With that much spread and at prices as high and fluctuating as much as they currently are you cannot expect to take 10 DAYS for a transaction of this nature.

Honestly, looking at this from the outside what is the difference between this an actual larceny? A large purchase comes in while the commodity is priced high, the commodity is not purchased but instead funds are held on to while the price drops and then the bitcoins are purchased at the lower price and the company pockets the difference...

Not even saying that foul play truly happened, but instead saying you cant run a business whos actions LOOK indistinguishable from foul play and expect to stay in business...

If you're in a business where you can tell customers i lost 30% of the value of your transaction due to a mistake on our end its eventually going to turn into a scam, even if that wasn't the initial intention... its just too much temptation

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Umm, if the Bitcoins were purchased at a lower price that would be good for the buyer. It's "Buy low, sell high", remember? The problem, it seems, is that the price was locked in at the original, higher, order price, but the transaction didn't go through and so the buyer had no liquidity as the price continued to drop. Had the transaction gone through the buyer would've lost an equal amount of money (and so the accusations of outright theft or fraud are a bit over-the-top), but the big problem is they were prevented from taking corrective action to limit their loss, which I'd consider to be pretty shitty service for a financial institution.

You seem to have missed this part: purchased at the lower price and the company pockets the difference

What he meant was coinbase could have easily used some of the 35k to buy the 40 by cheaper, and keep the rest. They could have done this, and still said what they said and the net effect to the customer would be the same.

This is not good for coinbase, even if it was an accident.

Is there any evidence that Coinbase actually did that? My read of the Coinbase founder's post up-thread was that they purchased the Bitcoins on the user's behalf at the time he entered the order, but a server failure prevented them from being transferred to the buyer's wallet. If they had given him the current market price they would have to purchase additional Bitcoins and eat the cost. (Which, reading the recent edit, seems to be exactly what they're doing.)

I agree this is not good for Coinbase, but I am also far less surprised or indignant than many posters here seem to be. This is what the early stages of most markets look like, with fuck-ups and manipulation galore. Read a book on the history of the NYSE (and later, Amex, which was called the "Over the curb" market because it consisted literally of people shouting orders at each other on a street corner in NYC) - this is far milder than the stuff that went on then. At least Coinbase seems to be exhibiting incompetence rather than the naked greed and malice that characterizes many other nascent markets.

I am not invested in bitcoin, so this may be a naive question, but is there any explicit promise that your funds will be available within n-time? There appears to be a gap in expectations. These entities do not seem to be brokerages, although many people expect them to be so.

That's not a bitcoin question, that's a per-exchange question.

If an exchange gives users an SLA stating "orders will be fulfilled within X business hours" then that's a contract between two parties. If the exchange says "yeah, we'll get around to it someday and you agree to deal with that" which is the usual intent language in the small print then you don't have much to go on if there is a delay, other than trying to raise a public outcry in the hopes they will back down.

Understood, but my question was specific to the current entities (exchanges/whatever) in the market that let you purchase bitcoin.

This is definitely ridiculous. The loss of value was not on the fault of Coinbase, but the result of market swings.

but he wasn't able to react to market swings for 5+ days after he was supposed to receive delivery

Sure, but the question is: if Coinbase placed the order today, that suggests they kept the ~12k loss for themselves. Is that rightful profit?

If you delay orders due to your fault (no matter if it's liquidity, intentional, technical or whatever) then you're liable for the market swings of the delayed good.

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