Tag: coinbase

Crypto Takes The Spotlight At Super Bowl LVI

The Super Bowl is perhaps the most watched American sporting event. It is the championship game between the two best teams in the NFL (National Football League), a professional football sports organization. In 2022 it was the Los Angeles Rams against the Cincinatti Bengals, played at the SoFi Stadium in Inglewood (a Los Angeles suburb). This gave the Rams a home turf advantage in a stadium with a capacity of 70,000 but expandable to 100,240 for events like the Super Bowl. The viewership projection for the Super Bowl in 2022 comes from data analytics firm PredictHQ.  They estimate that the event will attract 117 million viewers on NBC’s network. If the international market is included that could bring figures between 125 -150 million viewers.

That is great exposure for ads, and that is the reason why many are shown during the game’s broadcast. Getting to a large target market and demographic helps keep brands relevant, and does well for marketing to new consumers. With that as a reason for advertising, the crypto (i.e. cryptocurrency) industry took the spotlight with ads  for more exposure to a mainstream audience in 2022.

In Super Bowl LVI, crypto-related fintech companies like FTX, Crypto.com, Coinbase and EToro used this opportunity to release their commercials.  The market is not entirely in a boom phase quite yet. The market still has plenty of room to grow and we are at the early stages of adoption. Commercials that reach out to so many people, who actually watch them during the Super Bowl, is one way to get the message across. That is especially true for attracting new customers and crypto users. What is significant is that these companies are an important on-ramp to crypto.

The thing is, commercials for the Super Bowl need to be creative and engaging. This is probably the only time an audience will actually watch commercials because of the entertainment value it also brings during the event. Brands have learned that making their ads the most entertaining and engaging for the Super Bowl is how to capture their target market among the audience. For example we see the usual beer commercials and junk food items. Only this time with popular celebrities and public figures doing the endorsement since this adds more value and reputation to the brand. It is all about brilliant marketing with the theatrics of Hollywood.

How did the crypto ads do? I think they got the message across, but let’s be honest. Probably most of the audience have never before heard about crypto or simply do not understand or care about it. The commercials this year have become more engaging to try to make the target audience more curious and interested, at the very least. In one of their ads, FTX features Super Bowl champion QB Tom Brady (“Tom Brady Wants A Trade“). They feature a familiar face using a not so familiar app for crypto trading. Likewise, Crypto.com had their “Big Game Preview with LeBron James” commercial, as part of their “Fortune Favors The Brave” campaign.

These would be very expensive spots for even a few seconds, but perhaps it will be worth it. NBC was selling 2022 Super Bowl ads for record deals, closing at $6.5 million per 30-second commercial. Companies like FTX and Crypto.com will have no problem paying that amount. These are successful crypto exchanges earning billions in revenues who are willing to advertise. Advertising is a tried and tested formula for capturing new markets. For crypto it can help to bring in more adoption.

Coinbase Goes Down When Bitcoin Goes Up

It seems there is a correlation to Coinbase having network issues every time there is a Bitcoin bull run. It just appears to be a certainty at this point:

“When Bitcoin goes up, Coinbase goes down”

During the Bitcoin rally in 2017, when Bitcoin price value approached an ATH of $20K, Coinbase also experienced connectivity issues and trading was halted. This was the time Bitcoin suddenly surged and then came crashing down as soon as traders hit the exchange. It seems that the Coinbase system was not designed to accommodate or scale to handle millions of new users. That should have been a lesson to resolve the problem over the years.

It has not been solved. The most recent bouts of network outages and downtime have been occurring on and off. Between March and November of 2020, Coinbase has had a series of problems with their network. It may have affected the trading of Bitcoin in some way or another. No one is reporting the exact reason for these problems, but there have been reports of outages from Coinbase’s cloud provider AWS.

During a brief Bitcoin surge in November 2020, and also during an XRP rally, Coinbase suddenly goes down. It is frustrating traders who could have sold or bought more assets, but instead the system crashes. If it were a universal problem, it would also happen at the same time to other exchanges like Binance and Kraken. They all have to deal with issues on the network, but never at the level of Coinbase.

Coinbase CEO, Brian Armstrong, tweeted (in response to the problems):

“We’re working hard to add additional capacity (both in servers and customer support) to deal with increased traffic. Thank you for your patience during this time. And thank you to the team at Coinbase working hard to serve our customers! Bull runs can be exciting and stressful.”

— Brian Armstrong (@brian_armstrong) November 18, 2020

From an IT and network engineering perspective, the problem has to do with scalability and contingency. While AWS has autoscaling capabilities, if the whole infrastructure is affected, it will have an effect on Coinbase. There are other cloud IaaS (Infrastructure-as-a-Service) providers like Microsoft Azure and Google Cloud, which allows operations to continue in the event that one provider is down. For contingency, a more distributed and decentralized system would have kept the system operational to handle enormous workloads. Perhaps Coinbase had planned for capacity, but not agility.

A more distributed system can prevent downtime, but doesn’t totally eliminate it. If a server malfunctions it will go down and there is nothing that can be done to prevent it. However, the contingency in place is to plan for fault-tolerance and redundancy. Other IT professionals have aired the same opinion, like Hashoshi on his “404 Logic Not Found” section.

Coinbase has been a pioneer in the cryptocurrency space. It would be sad to see their trading business affected by downtime and outages. They have enabled millions to get into cryptocurrency as an onboard to more decentralized financial instruments. There are more options available for traders to buy/sell crypto, including the Robinhood app and even PayPal. They still need exchanges like Coinbase to convert cryptocurrency. Hopefully they can work things out, or else traders will flock to other digital exchanges or DEXes for their business.