The most widely advertised feature of the decentralized cryptocurrency is the symbiosis of trust and unbiassed verification within the blockchain technology.
However, as the recent crypto scams that have been pulled off on Twitter show, trust needs to be applied with great caution.
A Chain of Scandals
Bitcoin wars on Twitter have been going on for some time now. The factions supporting various types of crypto have been engaged in a full-scale flame war, bombarding each other with angry messages and accusations. As if that wasn’t enough, Twitter was all but buried under a landslide of fake verified accounts and a swelled number of copycat accounts.
Once the breaches in the defenses were found, more and more scammers started using the photo ID to trick Twitter into giving their accounts the “verified” badge and go on impersonating real, unsuspecting people and entities. The end goal is, of course, to swindle the users out of as much money as possible before anyone suspects fraud.
The notorious account “Protafield” (verified, of course) pretended to be a crypto exchange and staged the non-existent Ether giveaways.
Another verified profile, “seifsbei”, managed to impersonate six different accounts, such as Bitfinex, a crypto exchange, and even went as far as impersonating Vitalik Buterin, the creator of Ethereum.
These incidents make it more than obvious that Twitter’s verification process falls short of protecting its users and sifting the honest ones from the wrongdoers. Simply put, the “verified” badge no longer guarantees anything. As the founder of 2way.io start-up Tim Pastoor stated, “People at home see this as a stamp that Twitter sees this as a good account, which can be very subjective”. He also said that scams are made even more dangerous because it is not the intent that is vetted, but merely the identity that is behind the account.
A representative of Bitfinex, one of the larges Bitcoin trading platforms, says that fighting the influx of fake accounts takes a considerable amount of time and effort: “We dedicate a lot of resources towards combating illegitimate Twitter accounts and educating our users on how to spot them. However, our impact on certain sites is limited”.
The situation with the restless crypto segment of Twitter is anything but simple.
The false information that the fake account holders present to the users is camouflaged by impeccable terminology. The well-applied technical language does not only make the information look trustworthy, but also makes the standard scam detection processes that Twitter uses, such as language analysis, insufficient.
On the other hand, systematic fraud can be spotted due to the scammers’ tendency to promote the tokens in packs, boosting each other’s reputation and visibility.
Another factor to consider is, well, human. It is commonly known that people rather trust acquaintances more that strangers, and acquaintances less than close friends. Thus, to filter the information, Twitter could allow users to have more control over their feed, the way that Facebook does it. Tim Pastoor believes there are going to be iterations: “I would probably recommend starting with allowing people to filter based on people that they already trust, and to maybe make more use of your second or third-degree networks”.
The mess gets even worse because the accounts can pass to other owners, and not necessarily through hacks, and the new owners’ motives can be very different.
An example of such stray account is the suspended @bitcoin. It started with tweeting the information supporting bitcoin, changed hands many times over the years, and ended up tweeting controversial and misleading information. Finally, it caused so much disapproval, that Twitter had it suspended, and then divested of the verification mark.
The Power of a Tweet
Despite the apparently unreliable verification process, it is a fact that Twitter has a great influence on the crypto markets. Regular users can have as much impact on the price swings of a particular crypto enterprise as the scammers.
The founder of CoinTrend, Nick Lucas, says that there is “basically a lot of influence on Twitter when John McAfee or someone mentions a specific coin.” For example, the price of the Safe Exchange Coins spiked within 24 hours after McAfee tweeted about it.
Naturally, the tweets can just as well have a negative effect. As Lucas puts it, “If everyone is talking negatively about something that is getting pushed into a core repo coin, that can also have an impact. If someone with a big following tweets something, it can cause a scare”.