The recent Bitcoin surge saw the asset cross the $10,000 threshold for the first time since September 2019. While the asset has adjusted and is sitting just slightly below the milestone, many celebrated the surge as a sign of a possible hot streak- in preparation for halving.
However, while the entire cryptocurrency community was having a party over the top digital asset’s most recent surge, Binance, the world’s top crypto exchange, was having a bit of technical difficulty.
A Nuanced Explanation of How Exchanges Run
Addressing the shortage in operational efficiency, Changpeng “CZ” Zhao, the exchange’s chief executive, released a blog post clarifying that Binance’s platform was overloaded by a barrage of requests. Most users who tried to access the Binance platform during its downtime were it with API timeout errors, as well as messages such as “Too many requests” and “5xx internal error.” Clarifying, Zhao explained that the platform’s middle layer service was overloaded by requests from users.
Zhao allayed any fears and confirmed that the issue had been resolved. He pointed out that the exchange had implemented optimizations on the client-side to ensure that a repeat doesn’t happen again. However, he also explained that finding a long-term solution for it was a tad challenging.
“Due to the complex nature of this module, it does not auto-scale well. A new instance takes minutes to sync up the initial snapshot to be able to handle normal traffic. Further work was already in progress to address this but didn’t finish before the massive traffic hit us just a few days ago,” his blog post read.
Binance is On to The Next
Exchanges experiencing a lapse in their platform’s functionality during a price surge for Bitcoin is nothing new. When the top asset begins on what many believe is a bull run, several investors look to check on their holdings to verify that they’ve not been left out of the surge. Every day traders also look to cash out, while arbitrage traders usually go from exchange to exchange, looking for some leverage they could capitalize on.
Of course, there are those users who perform cryptocurrency transactions on an almost daily basis as well. Several exchanges have experienced such errors in the past, and while there are short-term solutions to be made, something that works in the long term doesn’t seem to be on the horizon just yet.
But, business must go on. And if you’re an exchange with the size and popularity of Binance, it’s important for you to continue innovating to ward off competition.
Just yesterday, the exchange announced the launch of its new initiative- the Binance Cloud platform. In the release, the company explained that the Cloud would provide users with the infrastructure required to set up their own cryptocurrency exchanges in a matter of days, using the company’s existing technology.
As the release explained, the new platform will provide new exchanges with top-of-the-line security, liquidity, and custodial services. There’s also a dashboard for managing funds, while providing multilingual functionalities and a wide array of trading pairs and coin listings.