Coinbase To Pump Money To Tackle Infrastructure Collapse: CEO

In lieu of the recent incessant outages on Coinbase Global Inc., the exchange has declared that it would need to invest in its infrastructures to effectively tackle the challenge.

High Demand on Coinbase Triggers System Shutdown

American cryptocurrency exchange Coinbase strongly believes that improving its trading infrastructure will go a long way in curtailing the outages that it has experienced in the last few weeks. Brian Armstrong, the CEO of the crypto giant voiced this solution during a recent interview with Bloomberg TV. According to Armstrong, the numerous outages were a result of high trading demand. 

He explained that the trading demands were larger than expected and this caused the system to crash. Noteworthy, Coinbase anticipated a surge in demand and prepared for it by increasing its capacity by up to ten times. This move was made right after the United States Securities and Exchange Commission (SEC) approved spot Bitcoin ETF trading in the region. 

However, the surge in Bitcoin price to a new all-time-high (ATH), triggered a more than ten times surge in traffic within an hour. 

“It exceeded even our models of the amount of interest that could come in in a short period of time,” Armstrong stated.

Outages Extends to Solana

With Bitcoin about 10% away from its ATH triggered by spot Bitcoin ETF inflows, the Coinbase outage in February wiped out as much as $100 billion in Bitcoin’s value in 15 minutes. It equally brought a lot of volatility to the crypto industry. Several Coinbase users noticed that their accounts displayed a balance of $0. Within a short time, the crypto exchange had a recurrence of the outage.

Downdetector data showed that there has been a bulk of problem reports submitted over the space of 24 hours, all related to the Coinbase outage. Again, Bitcoin had just registered an ATH when the reports were made. Crypto commentator MartyParty claimed that the exchange has constantly chosen to use inferior tooling and technologies that are fragile to high volume.

Whether a matter of inferior tooling and technologies as MartyParty claimed or infrastructure, according to Armstrong, these outages are somewhat becoming incessant which must be addressed with proper funding. Top protocol Solana has also been a victim of numerous disruptions in the last few weeks. Fixing the root cause of these outages are important to restore users’ confidence.

Also, while it seems like the spot Bitcoin ETFs may have indirectly contributed to the outages, Coinbase CEO confirmed that the new offering has been good for business.