Shilling Detected: How Fake Reviews Damage The Crypto Community

shilling

Shilling has been widely discussed, yet nobody seems to agree on its effects. Meanwhile, new reviews are constantly popping up and declaring that recently issued coins will become the only currency worth trading tomorrow, if not today. This digital economy is setting new challenges for the crypto community as a lot of unverified information overwhelms users. It is time to shed light on the sources that are damaging the upcoming decentralized future.

We would like to thank the team at Rateonium for their contributions to the design and implementation of the research and to the analysis of the result.

To clarify, shilling is the digital activity of spreading information around a specific coin to trigger community excitement and, as a result, to make prices go up. When an information bubble is overheated and pops, the prices go down and the trust of (and in) the community might be lost. This essentially happens because bad actors are more interested in pumping and dumping than they are in creating sustainable investments.

Coins Bought for Shilling

In the digital world information has become an asset. Information may help build bridges between communities, but it can just as easily make the walls of a fortress collapse. Despite the fact that crypto-communities are spread all over the globe, they are still unfortunately fragmented in small groups. Policy makers seem to be constantly adopting regulations that contradict each other, and other countries, all over the world. As Singapore continues blockchain propagation, China is taking the technology under control. The war between privacy coins ETH and EOS is still far from a happy end. Thus, unbiased and easily accessable information about crypto technologies is needed to engage more users and make the digital economy more stable.

New to a crypto community participants are looking for absolutely every piece of information, from Whitepapers to One Pagers, official social networks available online and more to make a decision on which coin to invest in. This information is hard to extract and compare as because it is not structured. The number of Blockchain wallet users worldwide doubled in the last year and overcame 24 mln in 2018. As new investors enter the digital world, they are often relying on the format that used to be most common,  bloggers. Bloggers give an overview on risky assets with a high rate of return in a friendly way without complicated linguistic turnovers and specific terms. This is the best time (and easiest path) for shillers to enter the game and give advice to stack the odds in favor of the specific coin they are investing in and trying to push.

Shilling for a Shilling

Bloggers act as a third party that delivers unique content while sharing their experience and helping people to navigate through information. The most popular social network, Facebook, has more than 2 bln users. Youtube follows Facebook in popularity with 1.5 bln active users. Twitter only has 300 mln users, but it also benefits from greater interaction within the community.

Based on our own research using YouTube analytics and personally approaching influencers for their services, we’ve compiled the following data in conjunction with sources that wish to remain anonymous:

One of the most popular crypto blogs on Youtube is followed by over 300k users. On average a blogger is followed by 50k active users who are driven by the desire to find out where to invest. As anticipated, investing advice is delivered in a friendly way that is coupled with promises.

Diving deeper, it appears that bloggers are spreading unverified information in a fruitful format to inspire crypto community to follow a coin and to invest in it. Why did they pick a particular coin if they don’t have expertise in financial analysis or the industry they are promoting? A video production is sponsored by a client, specifically a coin owner who ordered media coverage for a particular price. A blogger is available in social networks for further negotiations on price, length of the video, and additional features.

Prices for a review start from $1000 and can reach $50,000 for a media campaign. Different packages for services are available depending on the options a client wants to have. Basic review videos on Youtube made by a blogger with 20k followers and an average of 2,000 views per video costs $4,000. A client is free to add animation and effects for $6,000 to make the project look more shiny.

If a client wants a coin to be placed on other social platforms with more than 50k followers, the price might reach $25,000. This includes one full review video, sponsorship audio disclaimer removal, two 30 second placements at the beginning of two different daily crypto updates and 5 promotional tweets. A client might choose one platform where to advertise. Posts on Twitter cost $3,000 in a community followed by 3,500 users.

This might seem like a fair price for expanding a community and helping a coin to trend, if bloggers complete the research that investment funds are doing on a regular basis. However, all that bloggers are asking for is a link to a project website and prepayment in a liquid currency.

How to Detect a Shiller?

What was posted in the Internet will always be there. Bloggers do not monitor the project they shilled, however, and dead coins are tracked and listed on many websites.

Bitpaction was announced to be a fully decentralized international blockchain assets exchange. Almost 15 thousand followers trusted and were likely to invest in the project, and it was recently listed as a scam. What made crypto wallet users invest in such a project?

How could one resist the temptation to follow the project after reading such positive feedback? This tool is far more powerful and convincing than an article on a crypto media website as these bloggers have the same background.

Have a look at the accounts – they are consistently promoting other coins that might be the next to be listed as scam coins.

To protect potential investor from unverified information one is advised to go to websites that publish scam projects and see if these projects were reviewed in the blog that seemed so shiny at first glance. This easy step might save time, money, and trust in the crypto community. Crypto investors are trying to monitor new projects entering the market, although it’s hardly possible without rating systems based on blockchain technology to take the best of the data retrieved from user experiences.

We’ve created an infographic to better explain this idea to you:

shilling

Reviewing Other Reviewers

A recommendation system is a good source of information if it is not biased due to emotions, which social networks tend to be filled with. In order to make a decision on whether a coin is worth investing in or not, structured information is needed to be properly analyze the project.

Rateonium is on its way to become a third party that connects companies and followers on a scalable feedback platform. The network eliminates social media effects that propagate shilling: here’s how.

The network approves only reviewers who’ve tried out a project to post their feedback on the platform. Those users are motivated to share their opinion rather than to promote a project. The feedback is structured to provide a powerful tool for statistical analysis as the sample is representative to accurately reflects preferences of the audience. The rating platform has a particular scale of parameters such as date, location and other key criterias approved by a company for reviewers to assess a project. These parameters help to exclude emotional posts encouraging others to invest without conducting research.

As a result the network becomes truly transparent and reliable for decision makers. Blockchain technology is used to guarantee protection of personal information with an encryption processes it uses and to redistribute rewards for providing feedback. When a review is submitted, a rating algorithm automatically generates tokens to transfer them to a user’s wallet from a company’s deposit.

Rateonium provides the market with a solution to monitor reviews of a project that eliminates biased reviews.

Verified users who bought a coin and proved it in the Rateonium platform by submitting anonymously their first-hand experiences of using, for example, an alpha service or communicating with a project team. There is a reward transferred inside the platform in Rateonium coins (RTO). Afterwards, project owner can analyse reviews to continue developing a project in respect to the given feedback.

The insurance of trust concerning verified reviews made systematically and driven by economic desires to share real knowledge about a project is a key component of the crypto world. Rating systems based on blockchain technologies are able to eliminate information asymmetry for crypto investors, helping them to make a final decision based on data rather than on emotions.  

Also, Rateonium systems could expand way further than the crypto world. It could make it possible to review companies registered on the platform from almost every industry ranging from oil manufacturers to high-tech corporations. If a company cares about the exponential growth of its community, there can be a place where the feedback coming from each client is heard and is taken seriously.

Shilling is worth Less than Nothing

Information is spreading way faster than consequences are taking place. Today’s profit converts into tomorrow’s loss.

The digital economy is accelerating with investment decisions based on data and verified information that was parsed from decentralized sources,. Only when we start seeing the whole picture, not just the aggregated bits that depict the huge potential of the project, will we become truly informed investors in this digital economy.

All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice.

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