I am not excusing their behavior as they need to be able to handle it, especially when their server status affects the bank accounts of real people. But I feel that it is understandable with out condoning it. The simplest explanation is likely correct in this case.
I don't think many of us could have predicted the volume and interest in BTC a year ago and neither did Coinbase's purchasing and infrastructure teams.
Given the recent increase in news about cryptocurrency I've expected "technical difficulties" with Coinbase. Heck, most mining pools are sweating bullets right now.
Hypergrowth = hyperpains.
hypergains = hyperpains
Coinbase has been my recommendation to anyone new to the scene who wants to buy/use bitcoin.
And obviously once finished, move all funds to paper wallet.
It's absolutely bonkers amounts of growth!
Edit: more concrete numbers:
In January of 2016 they had around 2.6 million users.
On November 29th they announced they had over 13 million users.
I don't know how much computing power is actually needed when you're just buying BTC. When I used Coinbase recently to take a small BTC position, I only made maybe 4 transactions in total. Is this really a lot to handle?
I'd imagine you can't use scaling tricks like eventual consistency or simple sharding here. Traders are going to be pissed if their most up to date information from the exchange is a second behind what they can see.
It's already at the point where they have a line in their FAQ for the GDAX API that tells people where to colocate from for the lowest latency.
And all of that data needs to be stored damn-near indefinitely, and securely. And integrated with traditional financial systems.
I'd love to see some information on what it actually takes, as i'm just guessing here, but seeing as there aren't any bitcoin exchanges that can seem to keep the servers running smoothly during spikes, i'm guessing it's not a trivial problem to solve.
I'm not saying it's impossible, but the amount of growth they have seen is substantial and unprecedented. Nobody could have predicted it, and the rate of increase just keeps going up.
They are clearly new in this space, as all cryptocurrency companies are. I don't think that means that they should just give up and go home because they couldn't keep the servers up during spikes of insane activity...
And a lot more operating capital, too.
They have to scale at the rate their revenue or financial backers will be able to sustain. Based on the number of new users signing up to the service the down time is not yet a significant deterrent. If use drops because of downtime they will likely need to reevaluate a large capital spend to solve the issue.
I think I would have predicted that they'd need to run at a very large scale, and be able to handle massive spikes. Whether or not I could have convinced them to make the investment is another story.
It's a gamble no matter what, but moving too quickly or moving too slowly results in the company going under.
In that case, I think straddling the line of "overwhelmed when there is a big spike" is a good spot to be in all things consitered.
Currently they are signing people up at a dramatic rate despite their server issues. If they start laying people off because they spun up to fast they could start a panic that would kill them.
They have to weigh all of this in when deciding on an infrastructure spend.
I would also like to think from a purely personal level that they don't want to hire and fire people like that as these are real people with real families involved.
Scaling is a solved problem. You have AWS, Google Cloud, and MS Azure to choose from with financial institution/HIPAA-level offerings.
By most engineers in the field it is a difficult problem with ongoing work.
Also, your system gets more and more complex as you scale. More monitoring systems needed, more attack vectors to watch for, deployment systems, backup systems... Imagine the security level coinbase needs to have. It's somewhat unprecedented since a hack could make off with a lot of valuable assets in an instant. (even just from their hot-wallet)
You saying scaling is solved makes me question what you think their infrastructure looks like. It's not just an AWS loadbalancer with some shards behind it. It's A LOT more complex than that.
At least with the Cabal theories you know someone knows what's going on. You might even have someone to blame/jail at the end of the tunnel!
Are they not using cloud, which should enable easy scaling? Or is their architecture not designed for good scaling?
Most distributed systems don't really scale ass you add nodes beyond a factor of 10 to 100. If they did, you wouldn't need to hire super expensive people to handle those systems.
Cloud solves everything guys!!! Yes buy more Cloud now that's 10% down in the exchanges lol...