Quote from: Cubic Earth on February 10, 2014, 05:06:49 AM

Most of the discussion on that Reddit thread is uninformed crap. For a variety of reasons, it is completely reasonable to expect there to be different supply / demand equilibrium in different global markets. Arbitrage should equalize the global differences, but sometimes there is not enough capacity in the arbitrage channels to equalize big differences. By that I mean the FIAT cannot move fast enough around the world. In an attempt to not run out of coins for sale, Coinbase had to raise their buy and sell prices. I had a pile of cash on Bitstamp that had been sitting there for quite some time. When I saw the favorable spread, I quickly bought coins on Bitstamp and sent them over to Coinbase to sell them for a higher price, thereby 'delivering' coins to Coinbase, who in turn could 'deliver' them to its customers. Coinbase makes their 1% as always, their customers enjoy the convenience and safety of a U.S. based, ACH-bank linked broker, and arbitrageurs like myself enjoy a little payday for the risk and hassle we incur by setting up accounts with foreign excahnges AND by leaving money sitting there for a long time. For example, the money I had on Gox is not doing so well these days.

But, someone has to take the risk of leaving money or coins on exchanges. If the was no buffer, we would see some really crazy volatility.

Yeah, I really don't have a problem with what Coinbase did/had to do. Congrats to you, that you were in a position to make money on the situation.

What does bother me, is my email to support was answered with a half-truth reply. Don't they know the truth will set you free? I would have much more satisfied with the publicly released explanation...

"Hello and thank you for contacting Coinbase support!

Our price is based on both our own internal pending orders from users buying and selling on Coinbase as well a weighted average price on several different bitcoin exchanges. So the price on Coinbase may differ from one particular bitcoin exchange but is correlated to the price on any major bitcoin exchange in the long term.

I hope this answers your question!"