Binance claims that it is having trouble staying online due to an influx of new users–but for some reason, that led the Binance exchange to suspend withdrawals?
#Binance will be suspending withdrawals temporarily in order to address a large increase in requests from new unique users.
Rest assured funds are #SAFU and we apologize for any inconvenience caused.
Updates to follow.
— Binance (@binance) January 29, 2021
It is not quite clear why new users joining the exchange resulted in a withdrawal suspension for all users on the platform, but regardless, it happened.
“We almost ran out of DOGE coin addresses,” said Binance CEO Changpeng Zhao. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”
The recent speculative craze that has spread across internet communities and investing forums is encouraging retail investors to invest in meme stocks–including Dogecoin. Shortly after the internet army set its sights on Dogecoin, it pumped 800%. Brokers are calling these investment strategies irrational and irregular, and have taken it upon themselves to halt, terminate, or restrict trading on any asset that may be considered a meme stock. Earlier today, Robinhood placed restrictions on individuals looking to invest in digital currency via Robinhood.
Coinbase and Kraken can’t handle the traffic
Due to a technical issue, we are experiencing degraded service where some trades may not be able to be completed. Our team is working to quickly restore service back to normal, and we’ll send another update soon. Thank you for your patience. https://t.co/yCxdIQAK2Z
— Coinbase Support (@CoinbaseSupport) January 29, 2021
Binance is not the only platform that crumbled under increased web-traffic, earlier this morning both Coinbase (NASDAQ: COIN) and Kraken also experienced outages. Coinbase said it was suffering from “performance degradation,” and confirmed that the “buy digital currency with USD” feature on their platform had crashed during the service disruption, and Kraken exchange reported that it was experiencing “connectivity issues as a result of heavy traffic.
We’re experiencing connectivity issues and working to resolve as soon as possible. For real-time updates on the status of our platform visit: https://t.co/SiYH5aAlw0
— Kraken Support (@krakensupport) January 28, 2021
When will it change?
This isn’t the first time that we’ve seen major digital currency exchanges suffer outages and service disruptions during periods of high traffic. Almost every time the digital currency markets heat up and funds start pouring into exchanges, the major brokers and exchanges experience performance issues. Although the exchanges and brokers are often regretful and apologetic of the incident, platform outages don’t detrimentally affect service providers like they do investors and traders.
Some individuals, especially early investors, will be looking to sell while the markets are hot and the prices are rising, however, if they keep their funds on Binance, Coinbase, or Kraken, there is a high probability that they won’t be able to sell at that critical moment.
You would think that the user-experience provided by these exchanges would improve over time, however, these platforms suffer from the same issues over and over again at the consumer’s expense.
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