Can Poloniex keep up with the new crypto bubble or will the platform continue to suffer growing pains in the form of DDoS attacks, withdraw delays and massive support ticket bottlenecks?
Poloniex is currently the largest altcoin exchange in terms of volume in the crypto space. With more and more people showing interest in bitcoin, altcoins and ICOs, the trading volume and number of new users have both skyrocketed.
Poloniex Kills the Trollbox
However the real story here is the Poloniex “trollbox” (live user chat) closing. If you have any kind of crypto exchange with a trollbox, that is the heart and soul of the exchange. Without the trollbox where it used to be, things are just not the same.
Without that constant live feed of edgy traders’ banter there are no attempts to shake people out by spreading FUD, nobody asking when the next pump is, and nobody to complain about their withdrawal or support ticket that has been delayed for days, if not weeks. Poloniex says they took the trollbox away to concentrate all support staff on processing support tickets.
Poloniex had the most heavily-moderated trollbox ever, and I’m sure it took many hours of banhammering to keep it clean in there. Closing down a trollbox in order to handle a massive amount of support tickets is not a reason for people to start yelling “Gox”, though. That’s a refrain popular among Reddit dwellers or short-tempered altcoin traders that self DDoS themselves by pressing F5 over and over to check their current balance.
Shutting down the trollbox is not evidence of Poloniex being insolvent, but there’s a reason that some do not feel good about it. To date, I only know of one trollbox to shut down when the site was still live. That was Cryptsy, and we all know how that ended.
After Jesus died he rose from the dead on the third day. Will the trollbox be resurrected after only three days? Shitcoin traders worldwide want to know.
Claims of Support Shutting Down and Accounts Suspended
The most recent claim from a user was that their account was blocked or suspended, and that Poloniex is shutting down support. The only evidence presented is an out of focus screenshot that shows them trying to log into the support system. There is a message that says “There seems to be a problem with your account. Please contact your administrator”.
However this could be caused by any number of reasons we do not know about, and does not mean polo is shutting down support or anyone’s account. At the time of publication, I was unable to replicate or find anyone that can replicate the exact same issue this user had — but at a minimum it’s a symptom of a larger problem at Poloniex.
Everything is Pumping
Anything to do with bitcoin or “blockchain” is pumping at the moment. That includes altcoins and tokens that are connected to ICOs.
Polo has seen massive growth, and said: ” Since January, we’ve seen an increase of more than 600% active traders online and regularly process 640% more transactions than we did merely 4 months ago.”
They have also experienced massive profits. Just look at the volume for one coin traded at polo and do the math. Somewhere around 0.2 percent of the trading volume is fees collected by Poloniex.
Could All Those Fees Pay for Some More Support Staff?
You would think it is easy enough to hire more staff to handle the new users. Support staff, technical people that can deal with altcoin wallets and someone to handle the communication better.
You could also automate the withdrawal system, right? Maybe they have been hiring people or maybe they don’t even have time to look for anyone. It turns out that it’s not as simple of having enough time or automating withdrawals. It would not do Polo any good if they hired a hacker in a hectic phase of overwhelming volume, because they did not have enough time to do some background checks. They added:
“Training must cover the technical and regulatory complexity of a rapidly evolving industry and community. We must also ensure the security of our system and operations at every level. This requires thorough and proper vetting of new staff.”
There are also plenty of people submitting the same ticket again and again. This has created an even larger backlog and Poloniex says many of the tickets are repeat tickets. Of course, if you are waiting for a withdrawal you might think that opening a new ticket might help — but it looks in Polo’s case that it’s the same as reloading your page over and over during a DDOS attack.
It’s a Scam!
Some well-known crypto celebreties claimed that Poloniex is the “the biggest danger in the space” at a recent conference:
— mike in space (@mikeinspace) May 9, 2017
Shortly afterward, Polo experienced some heavy DDOS attacks and a lot of altcoins dumped. Was the alarm sounded by the bitcoin oracles out of real concern? Or was it made in order to gain scam buster points and profile oneself as a bitcoin oracle that should be invited to future events?
People love hearing about scams. It is part of our natural human defense mechanisms to regard all things as scams at first glance. If you simply yell “Gox” at a bitcoin conference you’ll get more attention than if you yell “fire”.
Now is Poloniex the biggest danger to the space, or are its current growing pains a symptom of more parabolic growth to come?
There is no evidence that Poloniex is insolvent. But they did shut down the trollbox and that is a crypto tragedy of its own — regardless of where you trade or if you trade at all.
When you do not control the private keys to your coins, you are adding one more layer of risk. Platform risk is something everyone needs to consider when trading or doing any business where you do not control your private keys. For some people it is worth the risk and for others it is not.
Are you a Poloniex user? Do the trollbox and support issues concern you? Let us know.
Images via Poloniex