[2018-10-08] Blow To Bitcoin As Coinfloor CEO Makes Worrying Warning

[gentlemand]

https://www.forbes.com/sites/billybambrough/2018/10/08/blow-to-bitcoin-as-coinfloor-ceo-makes-worrying-warning/#45a3412d2fb0

Can't say I'm too terrified myself. Coinfloor have not operated professionally in the past and I'm surprised anyone ever bothered using them.

The only thing that does make me wonder is that the same is likely to happen elsewhere. Exchanges won't be making enough to retain staff and when the next bubble arrives they might be in an even weaker position than last time. There could be more seizures than ever.

You can't magic up hundreds of staff from nowhere to meet sudden demand.

[Theb]

Downsizing in the industry is an inevitable thing to happen, just like how mining companies are shutting down due to loss of income this thing will not stop happening as long as their main earning points (cryptocurrencies) are not as valuable compared to its prices during the bull market. If they increased their employees during the last year's crypto craze, as a business owner I couldn't imagine how can they maintain all of their employees they have hired when both prices of cryptocurrencies and trading volume in their exchange is down, the only feasible thing to do is to sack some of their employees to keep the company afloat.  

[gentlemand]

If they increased their employees during the last year's crypto craze, as a business owner I couldn't imagine how can they maintain all of their employees they have hired when both prices of cryptocurrencies and trading volume in their exchange is down, the only feasible thing to do is to sack some of their employees to keep the company afloat.  

I hope at least they put them into cryostasis and revive them when a bull run happens. I expect the next bubble to be that much bigger again with all the strain that brings. Most exchanges couldn't cope last time. They'd absolutely fall apart if something more powerful happened.

I'm not sure how they'll ever manage to solve this. Boom and bust will continue for a long time to come.

[Theb]

I hope at least they put them into cryostasis and revive them when a bull run happens. I expect the next bubble to be that much bigger again with all the strain that brings. Most exchanges couldn't cope last time. They'd absolutely fall apart if something more powerful happened.

I'm not sure how they'll ever manage to solve this. Boom and bust will continue for a long time to come.

This is a good idea for the company but I don't think the laid off workers will feel the same. Them being in a pool where they are waiting to be called up for employment is a bad idea, first off they won't stay idle for the next bull run to earn some money, secondly they won't like the idea that they are just some kind of Seasonal Employees where they are only hired back when the bull run is also happening. They are better off finding a new job where there is a sense of permanency in their employment. Now these employees would know that entering in this industry is not the most sustainable way of becoming a long term employee.

[Betwrong]

To tell the truth I was surprised that with higher trading volume more staff members on an exchange is needed and vice versa. I thought almost everything was on autopilot there, especially regarding trading, and that a dozen of humans would be enough for running any exchange.

It is interesting which part of an exchange operating process needs humans the most. Maybe it's registration of the new users with all that KYC/AML stuff? Anyway, I can't imagine what else? Can someone please shed light on this?

[gentlemand]

Maybe it's registration of the new users with all that KYC/AML stuff? Anyway, I can't imagine what else? Can someone please shed light on this?

I think you answered it yourself, plus dealing with customer support stuff which is probably the main one. Witness how dire Poloniex is at solving problems.

Even if you're up to speed technically, a new surge of users could finish you off. Look how bad Kraken got before they sort of solved it. A proper upgrade of your engine requires a lot of skilled people I would've thought.

[DooMAD]

What a perverse perspective from this "article".  If a fiat bank has to make redundancies because it didn't have a robust business model, is that considered a blow to the national currency?  If it is, that's never how it's reported in the media.  We see corporate restructuring and branch closures all the time with the big banks.  So why portray the difficulties of this particular service as a blow to Bitcoin?  Aside from the staff being laid off, obviously, it's only the users of that service who might be affected.  All other Bitcoin users aren't even going to notice it happened unless they read this drivel.

[1Referee]

Even if you're up to speed technically, a new surge of users could finish you off. Look how bad Kraken got before they sort of solved it. A proper upgrade of your engine requires a lot of skilled people I would've thought.

It's a tough one actually. In all cases, being prepared to handle peak level volumes cost a lot money, and that while peak level volumes only remain that for like 3-5 months per 2 or so years? In other words, we can't really blame an exchange for not going all-out in terms of scalability. They rather struggle for a couple of months and enjoy low cost scalability for over a year without any problems.

As far as I'm aware of, Binance currently is ready to handle a x100 increase and they have a massive staff department. If you look at how much money they have ready to spend, it shouldn't really come as a surprise that they can afford to scale up to these levels. Other exchanges can't afford that, perhaps not even Coinbase.

[gentlemand]

As far as I'm aware of, Binance currently is ready to handle a x100 increase and they have a massive staff department. If you look at how much money they have ready to spend, it shouldn't really come as a surprise that they can afford to scale up to these levels. Other exchanges can't afford that, perhaps not even Coinbase.

Interesting. The total bubble crumblage of their competitors could be what puts the properly prepared exchanges into pole position for years on end. Punters will simply abandon the places that stop working and not come back.

If I were running an exchange, staying functional in all forecasted conditions would be my main priority. By the time you're put to the test it's far too late to address it.

[Kprawn]

To tell the truth I was surprised that with higher trading volume more staff members on an exchange is needed and vice versa. I thought almost everything was on autopilot there, especially regarding trading, and that a dozen of humans would be enough for running any exchange.

It is interesting which part of an exchange operating process needs humans the most. Maybe it's registration of the new users with all that KYC/AML stuff? Anyway, I can't imagine what else? Can someone please shed light on this?

I think the most human resources are needed for customer support. We see what happen when services like Coinbase grows

too quickly and when the support side are not keeping track with the user base. Downsizing in "quite" times are natural in

any business, but you have to be ready when the bulls start running. We know Bitcoin is very unpredictable, so a Bull run

might be around the next corner and getting people back in such a short period, might be a challenge.  

[Betwrong]

Thank you, @gentlemand and @Kprawn for your replies!

Summarizing all said above, we can say that the field where human resources are needed most is the customer support.

I think I have an idea regarding how to robotize the process to the greatest possible extent. (I know it sounds too pretentious, but I can't find better words right now. Sorry). Correct me if I'm wrong, but I think that the biggest part of support calls refers to deposit/withdrawals issues. When a deposit/withdrawal is pending for too long, customers, especially new ones, think that something goes wrong with their particular case and contact support, while in fact the whole network is slow at the time. What if to program an auto reply machine to search for keywords such as "deposit", "withdrawal", "pending" etc. in the call, and reply with a link to, say, https://www.blockchain.com/en/charts/avg-confirmation-time along with some words of course, but not with that We-value-your-input-and-appreciate-your-feedback bullsh*t, but invent something less annoying instead? And then, only if after a reasonable time the call is repeated, enable humans to deal with it? I think the number of the repeated calls can be 20 times less than that of the initial ones.

What do you guys think of that?

[darkangel11]

How can that be a blow to Bitcoin? If one of a million car traders fires part of its staff, is that a blow to the cars itself? These headlines are getting more ridiculous by the day.
A small exchange that is being slowly pushed out of the market by popular giants like bitstamp has to let go a few people. Boo hoo, I'm going to piss myself out of fear for Bitcoin's future. What will we traders do if coinfloor goes out of business? Don't know about you, but I'm going to have to hire a therapist.

And let's be clear it's not the decline in trading volume that is responsible for that. It's decline in volume on their exchange, and that's a huge difference. The volume in August and September was above the average, especially when compared to Spring and Summer of 2017.