In late 2012 Coinbase was cultured by startup incubator, YCombinator on a plate of Thayer-Martin agar with the "mission" of "Becoming the Paypal of Bitcoin." The company seems to have had some success on the surveillance side of their mission by tracing user transactions and a slew of ex-customers who claim to have been banned with minimal explanation – a problem Coinbase seems to have despite their penitent userbase. Of special note here is Coinbase's security outsourcing that frequently results in vulnerabilities.

Last week a reddit user named pxallin, having found a bug in the Coinbase pre-nuclear Vault that allows for a user to visibly negate their balance. Charlie Lee, Litecoin creator and Director of Engineering at Coinbase, posted to reddit he knew of the bug since he coded the Vault himself stating, "A user cannot withdrawal more money than he owns although the vault may have a negative balance." Adding up the math in the images pxallin disclosed deviates from the scenario Charlie outlined. CoinBase CEO Brian Armstrong praised Lee on Twitter for helping to save the company's image so the lemmings can continue to apologize for sins against Coinbase.

Coinbase has been skimping on security since their inception. Bitpay attempted to bring Bitcoin to the masses with this mentality nearly going bankrupt and they were robbed due to a lack of sane security protocols. It is only a matter of time before Coinbase's security issues become an irreparable liability.