US Bitcoin Exchange Coinbase Hits 10 Million Users

Tyler Durden's picture

After two (and soon three) "generational" market crashes, Joe Sixpack may have lost interest in the stock market (or at least in single names, the transfer of bagholder rights from institutions to retail investors via ETFs is doing just fine), but when it comes to chasing torrid, upward price momentum, US retail investors are doing their best frenzied Chinese housewife impression now that they have discovered the next big bubble thing, and it's called bitcoin. And nowhere is America's sudden infatuation with cryptocurrencies such as bitcoin, ethereum, litecoin and all other "coins" which can make (or break) a hedge fund's annual return in days if not hours, more obvious than on Coinbase, the US bitcoin exchange, which has just hit a remarkable 10 million registered users, all of whom are there for just one thing: to trade, but mostly buy, crypto currencies.

The San Francisco startup has seen tremendous growth in 2017, adding thousands of users per day and handling increasing levels of trading volume. Last month, CEO Brian Armstrong announced that the company had raised $100 million during its latest funding round, giving the company a valuation of $1 billion, making it first “bitcoin unicorn” according to Cryptocoinsnews. A few weeks later, following the latest burst higher in bitcoin, Coinbase has surpassed 10 million registered users. In the last three weeks of August, the bitcoin exchange added an astonishing 800,000 users as the bitcoin price briefly rose above $5,000. According to data from the Coinbase website, the exchange and wallet service has also recently surpassed $20 billion in total volume.

While many bitcoin veterans have panned Coinbase for its simplistic approach to trading (no limit orders, no shorting, etc) and exorbitant fees, some actually enjoy the minimialist, if expensive, experience: one user on reddit, btcltc77, referred to the exchanges as the “McDonald’s of Bitcoin banking.”

Coinbase is still the most mainstream way of buying Bitcoin. It’s the McDonald’s of Bitcoin banking.

That, and the implied safety net from its increasingly bigger venture backing, appears to be working and has made Coinbase the go-to site for millions of armchair cryptocurrency investors.

To be sure, Coinbase has not been without its challenges as it marched toward this impressive goal. Throughout the year, it has been embroiled in an ongoing legal dispute with the IRS over whether it should have to release personal client information to the agency.

It has also struggled to scale its business operations as fast as it has gained users, resulting in multiple outages throughout the year during periods of extreme market volatility, with many clients noting that one can determine if bitcoin is crashing without knowing the price, simply because the exchange is offline.

Moreover, the Consumer Financial Protection Bureau (CFPB) has been flooded with 4,700% more complaints about Coinbase so far in 2017 than it did in all of 2016 (which is understandable in light of the surge in users). More than a third of the grievances have come from users who said they were unable to access their money when promised. Many also complained about other transaction or service problems. Accusations of fraud represented less than 15% of the complaints.

Coinbase, which was founded in 2012, said in June that it’s working to improve customer support. The exchange has grappled with a slew of performance issues, including outages, slow load times and a flash crash in ether, the second most valuable virtual coin.

"Over the past few months, we’ve seen an unprecedented increase in the number of customers signing up to use Coinbase," wrote the company’s co-founder and CEO, Brian Armstrong, in a June 6 blog post. "As a result, our systems have been pushed to the limit. This has caused many customers to have a negative experience."

The company has pledged to devote Q3 (not to mention spending some of that brand new $100 million) to focusing on operational excellence, scaling, and an improved customer experience. It probably won't rush though: since it has a near monopoly on the retail crypto market in the US, as long as bitcoin keeps rising new clients will keep pouring in, no matter how much they complain about the underlying infrastructure.

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Mr Pink's picture

I have all of mine stored at Cryptsy

tmosley's picture

I had some Veritaseum dust stored on cryptsy. Would be worth tens of thousands today.

Feels bad man.

aurum4040's picture

3% of US population is a member of the McDonalds of Bitcoin and we're in a bubble right? Lol. I hope you ignorant closet jealous crypto haters actually did something smart and dipped your feet in the crypto pool yesterday or the day before when you know, it was the END of crytpo and 11,000th supposed coming of the gold standard. Twas a day many looked a gift horse in the mouth, to be sure. 

HRH Feant2's picture

People have normalcy bias. Change is hard for many people. I have always been an early adopter, techie, geek, gamer, gadget person, and now BTC trader. This is natural for me. This is not the case for everyone. Be patient.

Life of Illusion's picture

 

BITMAIN

MINING BITCOIN

Inner Mongolia is one of the world's largest. It has 25,000 servers and spends nearly $40,000 per day on electricity.

https://www.youtube.com/watch?time_continue=6&v=yGeim9E24Wk

 

https://www.bloomberg.com/news/articles/2017-09-04/sequoia-idg-are-said-...

TeamDepends's picture

This grotesque power consumption is why the leading coins of the future will be POS, or some hybrid thereof.

Exponere Mendaces's picture

We already have Proof Of Stake.

Its called the "Legacy Banking System".

And it will work out just as well if anyone bothers trying it in the crypto realm.

Ever wonder why Ethereum said they'll be switching to PoS but just haven't yet? Dragging their feet, in fact.

Its because PoS should be renamed to "Piece of Shit".

 

aurum4040's picture

I agree with your comments. I've always been the same way with tech, gadgets, computer geeks etc. In terms of trading my own funds - I've traded in many sectors over the years - commodity futures, energy futures, PM futures, forex, options, stocks whether long or short or arbed . Lost money and made money. I was very much into gold and silver hence my moniker. I still like PMs but with have a different outlook, projection on them. And as of now, the only thing I really trade is leveraged crypto. Several currencies. Very strange how things have changed.....Just wish people would actually research, learn, and act. It truly is amazing and game changing technology that combines decentralization, app development, brilliant ideas, individual empowerment and freedom, along with a way to invest and have a voice in it all. What other investment has a hand in litterally every business sector that gives you the ability to develop your own ideas that can be distributed and used by everyone on every machine everywhere? Best of luck to you!

HRH Feant2's picture

I reached the point where I have 100 pounds of silver and it wasn't going anywhere with regard to price.

PMs are insurance. I get that. But once your insurance is maxed out what then?

I haven't gone into the deep end of crypto and jumped into ICOs. Those are extremely speculative and very high risk. Nothing more than gambling. I had heard about Bitcoin for years. I suppose the thing for me was that as non-coding person I was reluctant to jump in until their was a stable user interface and something to back up online transactions.

Gaming developers have learned that without good customer service they cannot get people to spend money ingame!

You have traded in a lot more sectors than myself.

Am I a sceptic? Yes. I have only invest money into BTC that I am willing to lose. I understand that my account can go to zero.

Caveat emptor.

The central planners's picture

When the 90% of millenials cant afford to buy a house? Yes its a bubble.

Creepy_Azz_Crackaah's picture

There aren't enough bitcoin stories on ZH.  Pick it up, please...

Placerville's picture

Sign of the times. Dinosaurs go extinct.

tmosley's picture

If you guys stopped clicking on them, they would probably stop posting them.

But then, if dinosaurs had the internet, they probably couldn't help clicking on the asteroid threads either.

malek's picture

>If you guys stopped clicking on them

That's kind of like asking tmosley to stop posting bullshit... good luck with that approach.

tmosley's picture

4491

1339

Wonder what these numbers mean?

YUNOSELL's picture

Luckily for them they'll be some more suckers born every minute

tmosley's picture

Think they are actually dying faster than they are being born at this point.

NoDecaf's picture

Dinosaurs clicking on the asteroid thread...

Points for pithiness and humor

malek's picture

Yes.
Now tell us the higher first number "proves" the priced object is better than the second one - even though comparison between "pieces" and oz. is tricky.

tmosley's picture

Which number will prove that, do you think?

How long will it be before I post it?

Hahaha

malek's picture

NONE will prove that by itself, as only *realized* profits count in the final tally.

tmosley's picture

So how much profit can you realize now vs a year ago in gold?

And a bitcoiner over the same period?

Hahaha

malek's picture

And this concludes today's second edition of
'tmosley Shooting Herself In The Foot, Repeatedly!'

tmosley's picture

>If you make money, you lose

Hahaha

Exponere Mendaces's picture

tmosley doesn't hold gold...

OH, I see... you meant it like you're smart or something.

Hey genius, what's gold trading at?

Don't bother, nobody really gives a shit. Maybe you should get a clue before posting. Try sobering up, too.

 

ET's picture

Unrealized crypto profits can vanish in mere seconds.

No plunge protection team or circuit breakers to stop the freefall.

The Gold and Silver mining sector is really starting to take off. The massive profit opportunities in that sector will plunge the cryptos deep into the red as investors exit cryptos and seek safety in regulated securities.

The crypto market has many shady practices, such as wash trades with miniscule amounts to push the crypto price up with the hope of luring in big spenders, before the market tanks.

Exponere Mendaces's picture

That's like asking all the dinosaur-era cavemen here to understand how planes fly.

You're just a gum-flapping prepper-meme posting dumbshit.

Throw your computer out a window, before it self-combusts from having to deal with your mongoloid urges.

devo's picture

Clearly the owners of ZH own Bitcoins. They should materially disclose such info.

Raffie's picture

You best email them and tell them how upset you are about this.

An tell them the best way to run their site and demand they release their names, addresses, passwords and other personal information. 

Mustafa Kemal's picture

Please accept my condolences, you do have my sympathy

ET's picture

Crypto market top. Time to walk away from the crypto poker table.

I sold all of my litecoins when it hit $93 and took delivery of Precious Metals to front run the crypto gamblers.

When you see the same kind of people that buy lottery tickets talk excitedly about crypto, it is time to get out.

Just look at all the trolls here talking about crypto. Take your winnings and walk away. Getting your money out will be much harder the sharper the drop.

Exponere Mendaces's picture

Yeah, its almost like its being traded worldwide with large sovereign states considering using the underlying technology, or Bitcoin itself.

Total fad, man.

You know, like cell phones and rock music. Those things are due to go away any second now...

tmosley's picture

WHY do people use coinbase when there are better, more resilient exchanges out there?

FreeShitter's picture

Crypto virgins, they have to have their cherry popped and coinbase is it.....damn tyler has alot of btc articles as of late.

tmosley's picture

Reminds me of Ben Afflec's character from Mallrats.

People who trust them too much are going to wind up getting screwed someplace very uncomfortable.

Placerville's picture

Gdax is Coinbase.

 

Poloniex works fine, but not enough of the high flyer alts on it.

FreeShitter's picture

Gdax allows you to buy in with no fees with limit orders and yeah I know its coinbase per say, but coinbase.com itself sucks.

HRH Feant2's picture

Some people don't want to trade. For those that do it only takes a few clicks to transfer everything to GDAX. I trade almost every day on GDAX with limit orders and have never paid any trading fees.

There are fees to fund your account, people need to read the FAQs. Those fees have gone down, too.

HRH Feant2's picture

GDAX works well once you get your account set up. Similar to setting up online banking. It takes between five days to ten days.

The only coins traded on GDAX are BTC, ETH, and LTC.

None of the fly-by-night ICO shitcoins. Smart.

FreeShitter's picture

Im a huge fan of Bittrex.

Mustafa Kemal's picture

Bittrex works for me too. Not perfect,  but coinbase is very expensive and Kraken, ouch.

Thinkpad's picture

Me too I buy my LTC on GDAX than transfer my wallet Bitterex they trade a lot of different CC.

HRH Feant2's picture

GDAX is Coinbase. It depends on where you live. Some states, and countries, have stricter laws.

I trade on GDAX every day. Started with $5 in a Coinbase account.

It isn't too late! Sign up with $100 and you will get $10 in BTC and so will I!

https://www.coinbase.com/join/58e3e9126c7d4a01