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Fake views: How social media bots distort the crypto narrative

Social media is back in the spotlight following the release of the Netflix documentary The Social Dilemma. It further confirms what many have long understood - that social media is inundated with fake news, inorganic engagement, blatant misinformation, and manipulation. Unfortunately, the crypto sector is uniquely exposed to this phenomenon.

The recent Netflix documentary _The Social Dilemma _has stirred new discussions on the dangers of social media platforms. The documentary employs hyperbole when it gravely proclaims that social media is an "existential threat” to humanity. While much of the information it provides is not new, it is nonetheless confronting to have all of the downsides of social media laid out once again. Misinformation, fake news, filter bubbles, bot armies, technology addiction, crypto scams, bullying, and more.

It’s somewhat of a cliche by now, but the simple idea that "if the product is free, then you are the product", is as true as it ever was. The documentary takes this idea one step further, suggesting that all of us are essentially trapped in The Matrix, each of us being served up a unique version of reality, tailormade to hold our attention and sell us products thanks to increasingly clever and manipulative algorithms.

The documentary concludes that rather than social media itself representing an existential threat to humanity, the real problem is the way that social media amplifies the worst of humanity. And given the nature of human greed and nastiness, both personal and petty, and nationalistic and ingrained, short of throwing one’s phone away, solutions are hard to find.

Crypto social media

Social media is an essential part of the crypto asset and blockchain industries. For example, Reddit is invaluable for gauging community sentiment for a particular project or to find out whether a new crypto venture is legitimate or not. Twitter, on the other hand, provides 24 hours a day, seven days a week discussion of the crypto news cycle. On the micro-blogging platform, thought leaders discuss issues, flesh out ideas, and debunk myths.

While Twitter has native communities around many topics, Crypto Twitter is especially vocal, infamous, entertaining, and essential. Crypto Twitter is somewhat nebulous and difficult to define but it performs the following important functions:

  • It’s the industry’s newsfeed. This is where breaking news happens 24/7
  • It’s where the debates that define industry narratives happen. Some debates take place over years-long timeframes, ie Maximalists Vs altcoiners, Bitcoin Vs Gold, Craig Wright Vs Everyone – these are ongoing. The defining Segwit 2X and BTC Vs BCH debates largely took place on Twitter.
  • It’s high stakes real-world stuff and reputations are made and lost on the battlegrounds of Crypto Twitter.
  • It’s where the industry leaders are. The heads of exchanges, the heads of blockchain projects, the top traders and investors, the leading journalists, commentators, and trolls – are all on Crypto Twitter.
  • Crypto Twitter is a mirror of the crypto market, it’s highly volatile, emotional, and addictive.

Twitter itself has acknowledged the growth of cryptocurrency discussions on its platforms. In 2017 when the Bitcoin bull run began to take off, so did the Crypto Twitter conversation. At the time, Jared Podnos, Twitter’s head of Financial Data Partnerships said, “Over the last year, we’ve seen the cryptocurrency conversation on Twitter grow at unprecedented rates.” Bitcoin TweetsSource: Twitter

Podnos went on to say that Twitter was seeing increasing discussion related to new monetary technologies. “We’re seeing Bitcoin ($BTC) conversation volume alone exceeding that of the FANG stocks (Facebook, Apple, Netflix, Google) on a daily basis,” explained Podnos. “We are also observing the influence of crypto technology on other blockchain-related equities. Semiconductor stocks like $NVDA and $AMD are greatly impacted by the increase in mining-related products. It’s great to see the diversity in conversation, as the discussion isn’t just about cryptocurrencies. We see discussion related to broader blockchain technologies, protocols, and investment outlooks on transformative digital assets as a whole.”

The dark side of Crypto Social Media

New technology markets attract technologists, speculators, and scammers. Crypto is no different and unfortunately crypto is home to some of the cleverest and most dedicated scammers on the planet. All of whom dedicate their time to parting unsuspecting investors with their hard-earned crypto assets.

Just as the 2017 ICO boom attracted a multitude of dodgy token projects and outright scams, the rise of DeFi in 2020 has seen the emergence of complex Ponzi schemes, rug pulls, and dubious projects. New projects will typically offer attractive yields before disappearing with investor funds. While similar ICO scams were described as exit-scams, in DeFi they are known as a rug pull.

An example of a rug pull was the SushiSwap project. The founder, Chef Nomi, ran off with a portion of the developer fund, leaving Sam Bankman-Fried, the CEO of crypto exchange FTX, in charge. Bizarrely, Nomi did eventually return some of the funds before disappearing again.

Rise of the bots

One of the biggest issues with modern social media is the prevalence of fake or inauthentic accounts. These are often run by bots, and deployed at scale by hackers, scammers, or even nation-states.

In general, inauthentic accounts on social media can be placed into two categories: fake accounts and bot accounts. Bot accounts are usually easy to spot as they are dedicated to a specific cause, retweeting or reposting content around that issue. Typically, they do not add any other data, like a profile picture, which makes it easy to spot them as non-human.

Fake accounts, however, are more difficult to identify, designed as they are to mimic the actions of real humans on social media. A common type of inauthentic account is the troll account and they will typically engage in activity to further obfuscate the inauthentic origin of the account’s content.

It is no secret that social media has been overrun by both bots and fake accounts. In 2018, for example, Facebook closed 1.3 billion fake accounts and revealed that between 4 and 5 percent of its monthly users are fake. On Twitter, some reports estimate that potentially 40 percent of its accounts are fake.

This year the major social platforms – Facebook, Reddit, Google, LinkedIn, Microsoft, Twitter, and YouTube committed to removing coronavirus-related misinformation from their platforms.

The Covid-19 pandemic has seen a prolific and concentrated effort to spread misinformation. This same phenomenon happened during the 2016 United States presidential election, and recently there were fake arson rumors during the bushfires in California.

During the early months of the pandemic, despite strong public support for stay-at-home orders, there was an equally strong online movement that pushed for an end to the lockdowns, and a return to business as usual. A CMU study found that this campaign was driven by fake bot accounts. To analyze bot activity during the pandemic, CMU researchers collected more than 200 million tweets discussing the COVID-19 pandemic. Of the top 50 influential retweeters, 82% were bots, they found. Of the top 1,000 retweeters, 62% are bots.

In another example, in June of this year, Twitter published a blog post in which it disclosed 32,242 accounts linked to nation state-linked misinformation operations. Twitter said “the account sets we’re publishing today include three distinct operations that we have attributed to the People’s Republic of China (PRC), Russia, and Turkey respectively. Every account and piece of content associated with these operations has been permanently removed from the service. In addition, we have shared relevant data from this disclosure with two leading research partners: Australian Strategic Policy Institute (ASPI) and Stanford Internet Observatory (SIO).”

The purpose of bot-driven campaigns is to create social disorder by spreading misinformation. This can increase public anxiety, frustration, and anger and weaken the social fabric.

A 2019 report published by researchers from the Oxford Internet Institute revealed a worrying trend in organized "social media manipulation by governments and political parties".

They reported that “Evidence of organized social media manipulation campaigns that have taken place in 70 countries, up from 48 countries in 2018 and 28 countries in 2017. In each country, there is at least one political party or government agency using social media to shape public attitudes domestically.”

Bots in the crypto sphere

Ever notice those helpful folks on YouTube who share their remarkable crypto trading success stories and provide links to their personal gurus who can teach you how to have the same success? Of course they’re fake. Comment bots usually appear within minutes of a clip going live and they’ll also have 5-10 ‘replies’ from others thanking them for the heads up – or endorsing the skills of said guru – or even commenting on each other’s comments. They’re all bots too. YouTube comment botsComment bots are rife on YouTube

Despite their efforts, YouTube’s owners Google are simply overwhelmed by the volume of bot activity. And while it might be reassuring to think that actual paid advertising on YouTube will have been vetted in some way for authenticity – or at least for pure criminality, again that’s not the case, as outright scam advertising is routinely found on YouTube – particulary around clips relating to cryptocurrency as this scam Bitcoin giveaway ad, purportedly from the Binance exchange, shows.
Binance Fake BTC Promo

In August 2018, New York-based marketing and social media analyst Geoff Golberg posted a research report, which shone a light on the heavy presence of fake and bot accounts in the crypto twitter-sphere. Investigating the most ardent supporters of Ripple – otherwise known as the ‘XRP Army’ – Golberg was curious as to the number of Twitter users whose online name includes the letters ‘XRP’. Golberg’s research found that many of the followers of a leading XRP Army persona were either fake or bot accounts. He further revealed that these accounts were used to like or retweet posts from leading personas in the community to portray significant grassroots support as well as to boost further engagement with the content.

Golberg XRP tweet

Analyst Geoff Golberg is curious as to the number of Twitter users whose online name includes the letters ‘XRP’

While it is unclear who is behind the accounts and their funding, large scale and coordinated campaigns require significant resources to maintain. Alluding to his findings and the XRP Army, he tweeted: "astroturfing = the deceptive tactic of simulating grassroots support for a product, cause, etc., undertaken by people or organizations with an interest in shaping public opinion."

Moreover, Golberg found that this practice is commonplace within the crypto community. For example, as a recent report from TIE revealed, shady exchanges are amongst the primary offenders in the use of fake accounts and trading for marketing purposes, while another community regularly accused of employing bots or fake accounts to inflate user interest statistics is the Bitcoin ‘Satoshi Vision’ project.

In response to Golberg’s research, another Twitter user stated "I’ve seen a huge uptick in $BSV sock puppets, I bet there are almost as many as $XRP ones at this point. How to spot them? They’re always using the same arguments and seem to be reading off a script word for word," he said – referring to fake accounts dedicated to the Bitcoin Cash hard fork.

Following the report, Golberg says that Ripple’s leadership had intimated they would attempt to rectify the problem if indeed there was one. However, he says he has yet to hear back from them.

"Ripple’s CTO, @JoelKatz, mentioned to me in July that if "there’s a real problem" with the XRP Army that he’d be "willing to deploy resources to investigate it. Has been crickets from Schwartz since I shared data outlining the magnitude of the XRP/Ripple astroturfing efforts."

Today, the XRP bots are as active as ever. For example, a recent Ripple Price Analysis posted on Brave New Coin on July 28th received extraordinary inbound traffic for nearly 36 hours. The number of visits per hour was unchanged every hour for the entire 36 hours, and the duration the visitors stayed on the page was stable at 4 minutes and 21 seconds. This type of machine-like behaviour is a tell tale sign of bot activity.

While Golberg’s findings provide definitive statistics into the XRP Army, they are only a portion of the greater cryptocurrency community. Indeed, social media does have a legitimate place in the crypto narrative. Consider, for example, social media websites such as BitcoinTalk, the bitcoin-focused forum founded by Satoshi Nakamoto, which he used to flesh out his ideas as well as to announce updates to the software during crypto’s earliest days.

Today, this same communications model is utilized by many blockchain-based projects looking to share information with the public. At the same time, though, it is reasonable to suggest that bots play a disproportionate role in crypto – and the claims of millions of online followers by dubious projects should be viewed with appropriate skepticism.


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