[2017-12-28]SegWit implementation not fast enough, says cryptosphere

[DowBit]

Coinbase vice president, Dan Romero announced implementing SegWit is among the company’s top priorities. Bitcoin’s price drew many new investors to the platform, increasing transaction processing times, and raising fees. The surge of new users strained technical infrastructure, leading to service delays on one of the world’s leading cryptocurrency exchanges. SegWit aims to reduce transaction lead times and lower fees for Bitcoin users.

Segwit community
Coinbase’s stance, however, is not without controversy. Many in the crypto-community criticize the exchange for not implementing the update fast enough. Coinbase claims security and site performance are their main concerns. In a blog post on December 15th, Romero stated:

In terms of our engineering priorities, securely storing customer funds remains our top priority. […] Our next priority is to ensure that our platform remains performant during periods of peak volume. Following security and performance, we are focused on adding new features for our customers.

Coinbase stores billions of dollars worth of Bitcoin for its customers and Romero cautions that any changes to the platform’s infrastructure require “significant planning and consideration for the security and stability of our platform.”

more: https://dowbit.com/segwit-implementation-not-fast-enough/

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[buwaytress]

That's a lot of lip service. SegWit has been available for months, and for a mammoth corporate company like Coinbase, upgrading their wallets to support it should have been relatively simple to do. At the very least, it shouldn't have taken them this long. What their priority seemed to be was instead something like Bitcoin Cash support, which they originally would not do, then said would happen in 2018, and then jumped the gun and invited all that rumour (and evidence) of insider trading. In fact, that should have been far easier to do and they still dragged their feet.

Remember, we're not talking about some struggling exchange. This is Coinbase, the self-titled Cryptocurrency Unicorn. So the "cryptosphere" is absolutely right in criticising them and others for not moving fast enough. It's deliberate and whatever they do or fail to do will always be motivated by commercial reasons.

[squatter]

That's a lot of lip service. SegWit has been available for months, and for a mammoth corporate company like Coinbase, upgrading their wallets to support it should have been relatively simple to do.

It might be more complicated than that. Some have pointed out that Coinbase has an incredibly fragmented UTXO set due to years of wallet mismanagement. The current fees on the network might make migration to Segwit prohibitive for them. When 1 satoshi per byte transactions were available a couple months ago, maybe not. But hindsight is a bitch, ain't it?

Remember, we're not talking about some struggling exchange. This is Coinbase, the self-titled Cryptocurrency Unicorn. So the "cryptosphere" is absolutely right in criticising them and others for not moving fast enough. It's deliberate and whatever they do or fail to do will always be motivated by commercial reasons.

Well, yeah. They're a company that answers to shareholders to customers, not the Bitcoin community. It's obvious after their foray into ETH and LTC that more markets = extremely profitable and important for growth. It's also obvious from trading on GDAX that their infrastructure is terrible amidst their massive growth in volume. They're supposed to be an exchange, but they are riddled with downtime. Dealing with their back-end trading engine, API and scalability issues = a lot more important than adding Segwit. I say that as their customer, and also putting my feet in the shoes of their investors.

[buwaytress]

It might be more complicated than that. Some have pointed out that Coinbase has an incredibly fragmented UTXO set due to years of wallet mismanagement. The current fees on the network might make migration to Segwit prohibitive for them. When 1 satoshi per byte transactions were available a couple months ago, maybe not. But hindsight is a bitch, ain't it?

On that side, you have a point, and I did wonder in another thread if they would wait out for this mempool bloat to ease off, and then take the chance to consolidate their surely fragmented wallets with low fees. But then I was thinking, the way they pay out miner fees anyway for withdrawals, I see no reason why they couldn't just engage a miner on a sub-contract to accept their txs for a proper fee, or maybe work out a corporate deal. They're powerful and connected enough.

Remember, we're not talking about some struggling exchange. This is Coinbase, the self-titled Cryptocurrency Unicorn. So the "cryptosphere" is absolutely right in criticising them and others for not moving fast enough. It's deliberate and whatever they do or fail to do will always be motivated by commercial reasons.

Well, yeah. They're a company that answers to shareholders to customers, not the Bitcoin community. It's obvious after their foray into ETH and LTC that more markets = extremely profitable and important for growth. It's also obvious from trading on GDAX that their infrastructure is terrible amidst their massive growth in volume. They're supposed to be an exchange, but they are riddled with downtime. Dealing with their back-end trading engine, API and scalability issues = a lot more important than adding Segwit. I say that as their customer, and also putting my feet in the shoes of their investors.

Fair enough, but from an investor point of view too, while getting SegWit done probably is dev intensive - more complicated yes, but not as long-drawn I would think as scalability (their back end, customer support etc, which can be difficult to achieve success or ever find an end point. These are ongoing priorities). And getting something like SW fixed is an easy win to chalk up for the board members - the crypto unicorn first to offer full SW exchange wallets. Has a nice profit ring to it.

[Samarkand]

That's a lot of lip service. SegWit has been available for months, and for a mammoth corporate company like Coinbase, upgrading their wallets to support it should have been relatively simple to do. At the very least, it shouldn't have taken them this long. What their priority seemed to be was instead something like Bitcoin Cash support, which they originally would not do, then said would happen in 2018, and then jumped the gun and invited all that rumour (and evidence) of insider trading...

I agree that the earlier launch of Bitcoin Cash trading was pretty shady
and has destroyed the trust that many people had in Coinbase.

However, I disagree about how easy it is for Coinbase to integrate
Segwit. I´ve read somewhere that they use a custom software to manage
more than 800k Bitcoin wallets. Therefore it might not be trivial to
update to Segwit adoption compared to other exchanges that use a wallet
software that is maintained by external developers.

Nevertheless, a company that is as profitable as Coinbase should really
finish Segwit integration.

[hatshepsut93]

I'm pretty sure that Coinbase just throttles Bitcoin on purpose, because it would benefit the most from centralizing it, since it's the biggest gateway at the moment. This is why they refuse to implement effective technologies for reducing fees for their customers like transaction batching and SegWit and instead push for bigger blocks - first in a form of SegWit2x, now they are going for Bcash. If the network would become more centralized because of bigger blocks, Coinbase would have even more power, as it would be able to influence other nodes of the network, which can be used to change the rules or blacklist transactions.