Bitcoin hits $16K before major cryptocurrency exchange Coinbase crashes

Bitcoin rose more than US$3,000 in 24 hours to hit US$16,000 (C$20,500) before Coinbase, the largest cryptocurrency exchange in the U.S., started experiencing technical difficulties on Thursday.The company posted a message on Twitter on Thursday morning saying technical issues were due to “record traffic.”We are currently experiencing record high traffic. This is resulting in some customers having slow performance or issues logging into their accounts. We are actively working to resolve this as quickly as possible.— Coinbase (@coinbase) December 7, 2017Story continues belowGlobal News was able to access Coinbase around 2.30 p.m. ET on Thursday after the site appeared to be down around 1.30 p.m.Meanwhile, on Wednesday, users of a popular cryptocurrency exchange called NiceHash were wringing their hands as the online marketplace that held their bitcoins unexpectedly went down. On Thursday, NiceHash marketing head Andrej P Škraba told the Guardian newspaper that hackers took 4,700 bitcoins, worth approximately US$75 million ($96 million) at today’s price.READ MORE: Bitcoins stolen after cryptocurrency site NiceHash hackedNiceHash matches people with spare computing power with so-called miners, who process Bitcoin transactions, a very energy-intensive procedure, and are rewarded with newly-minted bitcoins. It is hardly a place for cryptocurrency neophytes.Coinbase, on the other hand, is probably where most Bitcoin beginners head to buy the digital currency in North America and one of few options for Canadians to purchase bitcoins via a credit or debit card.READ MORE: Bitcoin for Canadians: Where to buy it – and the taxes you’ll paySo what do the latest developments mean for Bitcoin newbies who have just piled into the virtual currency?Coinbase has insuranceIf you just bought bitcoins or other digital currencies on Coinbase, the first thing you should know is that the exchange has insurance.Cryptocurrencies don’t have government-backed deposit insurance, like bank accounts.However, Coinbase is insured by Lloyd’s of London, Campbell Harvey, professor of finance at Duke University’s Fuqua School of Business told Global News, speaking before news of the Coinbase outage broke.“All digital currency that Coinbase holds online is fully insured,” reads the webpage where Coinbase details its insurance coverage.The insurance would cover any customer funds lost as a result of a breach of the company’s online storage, according to the statement.Coinbase also states that only two per cent of its customers’ funds is stored online, with the rest stored offline.WATCH: Bitcoin: hot investment opportunity or looming bubble?

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