Coinbase users saw a frustrating Wednesday this week after outbound bitcoin transactions experienced delays while not registering on the blockchain.
A Coinbase log revealed that the issue was identified early Wednesday, around 01:40 PDT. “We have identified an issue with slow BTC outbound transactions and are working towards resolution,” the log read.
The San Francisco-based bitcoin exchange and wallet provider issued an update a little over three hours later at 04:52 PDT, stating:
Outgoing transactions are not being pushed to the Bitcoin network. We are still working on resolving this issue.
Understandably, users saw transactions stuck for several hours. Some Coinbase users took to social media to air their concerns. Some users still saw delays, as initially delayed transactions were in the process of catching up, resulting in further delays.
The Reason for Delay: A Large ICO-based Withdrawal
Soon enough, Coinbase CEO Brian Armstrong addressed the issue, revealing that Coinbase’s hot wallet was stretched due to one single customer withdrawing funds from their ICO.
In a post on Reddit, Armstrong wrote:
Coinbase CEO here – apologies for the delay. We endeavor to keep a small % of bitcoin actually online in our hot wallet. This occasionally leads to delays when large amounts of funds move. In this case it was due to a single customer withdrawing the funds from their ICO.
The issue saw an eventual fix at around 10:47 PDT, seven hours after it was identified, according to Coinbase’s own transparent official logs. “Transactions will progress as they start to be confirmed by the Bitcoin network,” the log added.
Armstrong explained that the decision to keep a “small % of bitcoin” in the company’s hot wallet was a deliberate choice for security reasons.
Upon resolution of the issue, Armstrong’s post further stated:
The backed up transactions should be clearing out now. Sorry again for the trouble here. This is one of the conscious trade offs we make between security and how quickly funds can be restored from offline, there is definitely always room to improve these processes.
Image from Shutterstock.
Last modified: March 4, 2021 4:51 PM