While at work my phone had been BLOWING up with the events from Ethereum. If you hadn't learned, the value of Ethereum crashed to nearly $13 on the Coinbase and GDAX exchange site.
That skinny red candle going STRAIGHT down you see is the result of the crash in the system for Coinbase and GDAX leading to what we all know as panic and confusion. As my friends texted me I began researching what had caused the crash through various websites even while sitting in meetings at work. Here is my two cents on what had happened.
Yesterday June 20, 2017 the release of new ICO Status Token was available for trading. The hype was real on this token as thousands of platforms were talking about this new ICO. The hype behind this release had been built up so much from users who were unable to buy the BAT coin that they knew for sure they wanted to get their hands on Status. Through heavy traffic and laggy transactions, the Status Token ICO was a successful hit driving in a whopping $64 million. This heavy traffic however led to a back log and congestion of Ethereum transactions located within the blockchain itself.
This heavy congestion created a huge lag of orders in the system especially in popular exchange Coinbase and GDAX. Coinbase and GDAX probably drive the most traffic for Ethereum, Bitcoin, and Litecoin users due to it's simplicity and user friendly functions. NOW during the next morning when the servers had finally calmed down after going through transaction after transaction, this was when the lag had hit. The congestion was becoming a problem leading to transactions taking forever causing people to not only panic but attempt to sell their Ethereum. As sell orders for Ethereum did not process the previous day, the lag had gone through and instead processed on Coinbase/GDAX at approximately 12:30pm PST. The immense number of sell orders had officially gone through the system bringing the price into a downward nose dive to a mere $13. This value however was then brought back up due to the amount of buy orders and people rushing towards the dip.
This frenzy of chaos however brings a bad reputation for not only Coinbase and GDAX but to Ethereum as well.
What we should take from this one minute crypto crisis is the fact that cryptocurrency is growing and we need to do something to allow for increased traffic. The Coinbase and GDAX servers are not capable of handling the amount of traffic and popularity that has been driving Ethereum to the moon. Ethereum and the technology is amazing but it's crushing to see that people have negative feelings over it because the exchange site servers cannot handle the increased traffic. What Coinbase and GDAX should be doing is working on their servers and looking for ways to upgrade them in order to allow for increased trading volume throughout the day. Crypto is the future and when the entire population begins to use this future we must be prepared to withstand the incoming traffic.
Instead of panicking, lets use this mishap to learn from it, better our technology, and fix the problems at hand. This will allow for not only Ethereum to strive even more, but also other cryptocurrencies such as steem, litecoin, bitcoin, and various others.
Disclaimer: I am personally an Ethereum investor myself. This post is written through my opinion and my research! If you take any action with Ethereum or any cryptocurrency after reading this post please do research of your own to understand before making any actions! I am not a professional investor nor a financial consultant, just a cryptocurrency enthusiast. I also love any criticism, comments, thoughts, opinions, and conversation so please feel free to let me know down below.