Even though there is a lot of excitement in the Bitcoin world regarding the recent price changes, these wild swings create a fair amount of issues as well. Bitcoin debit card users may have experienced similar problems yesterday, like trying to make purchases during busy periods of Bitcoin trading was pretty much impossible.
Halted Bitcoin Debit Card Transactions
Over the course of five hours yesterday, I had not one, but two, of my Bitcoin debit cards rendered useless. Both of these cards are issued by Bit-X – one Mastercard and one Visa. All of these cards had one thing in common: I was attempting to complete transactions denominated in EUR during heavy periods of Bitcoin trading.
Despite my initial thoughts of this having to do with Kraken’s API facing major issues throughout the day, it turned out that had absolutely nothing to do with it. However, having Kraken go down on several occasions throughout the day when Bitcoin is rising to new heights is quite worrying.
Trouble started brewing when I attempted to pay for groceries yesterday morning (around 10:10 in the morning, CET+2). After inserting my Visa-branded Bit-X debit card, and entering the pin code, I was greeted with the following error: “Payment temporarily refused”. Not a message anyone wants to see when there is a queue of people behind you.
Deciding to try my luck again, I took out the card, wiped the chip clean, and repeated the process. After a long 10-second delay when hitting the “OK” button on the card reader, the transaction finally got accepted. When I got home, I noticed there was a small delay on debiting the funds from my Bit-X account as well, although that is not something I would worry about too much.
Then things started picking up, as the Bitcoin price soared past 440 EUR. At the same time, my smartphone’s USB connection plug – which is used for charging – dislocated. After fiddling around with the plug for an hour, there was no resolution in sight other than getting it repaired, as it is still under warranty.
Unfortunately, my phone was bought through Amazon, which would mean having to send it back to them and waiting for a repaired device, or replacement from a third-party seller. This is a particular annoyance, as I’m leaving for London on Sunday to attend Ethereum’s DEVCON1 conference.
To make a long story short, I decided to buy a new phone – Samsung Galaxy S6 – through Amazon (not a third party seller) and get it delivered the next business day. Unfortunately, my transaction – with the same VISA card, mind you – was instantly rejected by the system. Even entering the details again did not seem to help.
Luckily, I have my other Bit-X debit card – Mastercard-issued Travel Card – attached to my Amazon account as well. Since both cards are linked to the same wallet, I decided to give that card a try. To my surprise, this card was rejected as well. For some reason, Amazon could not debit funds from either card, although the Bit-X service was working fine.
At this time, the Kraken API was unavailable yet again, allegedly due to some DDoS attack against the platform. Even though both of these events are completely unrelated, it is understandable why people might start to see a “conspiracy theory” forming. The untimely coincidence was confirmed when Kraken sorted out their issues, yet problems with my Bit-X card remained. This morning, I noticed my order had the famous red bar around it, indicating another payment issue. Apparently, when my order was ready for dispatch, Amazon couldn’t bill the card, due to an unknown issue somewhere along the line of processing my Bitcoin debit card.
Setting Up Failovers As Bitcoin Debit Card Provider
Even though Bit-X takes care of fiat currency/Cryptocurrency exchanging themselves, issues like these are doing its customers a disservice. Granted, there aren’t a ton of exchanges dealing with EUR trading pairs right now, but at least one or two “failover” exchanges should be used at any given time – assuming this is part of the problem that is. Or they could create some sort of “buffer” during which they will process transactions regardless of whether the internal exchange API is accessible or not.
Despite not being related to the Bit-X problems, Kraken cannot afford to face so many issues in one single day. Outages lead to investors and novice users losing funds in the digital currency. While I can understand a DDoS attack is annoying, you would expect such a platform to be able to handle it without a hitch. Apparently, they can’t.
I’m not sure which party I should be angry with, or whether I should even be angry at all. After all, I decided to cut ties with my bank and destroy their credit card a few months ago, solely relying on Bitcoin debit cards. That being said, scenarios like these will hopefully have been an exception rather than a common occurrence.
In the end, I had to cancel my order, as Amazon no longer had the phone in stock. Missing out on an opportunity to replace my smartphone – which I really need on a day-to-day basis – during a Bitcoin price surge sucks. But I’m sure there will be more opportunities soon.
Images courtesy of Kraken, Bit-X, Shutterstock
Also published on Medium.