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Who Needs a Bitcoin ETF? Crypto Scoffs at SEC Rejections

Over the past two days, the narrative on bitcoin exchange traded funds (ETFs) in the U.S. has felt like a rollercoaster.

Up until Wednesday, all eyes were watching for a final decision on two futures-backed bitcoin ETF proposals set to be listed on the New York Stock Exchange (NYSE) and created by ProShares.

However, the resulting decision not only shot down ProShares’ twin proposals, but five others like it by Direxion and another two by GraniteShares, with the latter to be listed on the Chicago Board Options Exchange (Cboe).

Then, as if matters had not been rousing enough, the SEC announced the following day a petition to review all nine disapproval decisions in accordance to Rule 431(e) of the Commission’s official “Rules of Practice,” noting that until such a time the review is complete all such decisions would be stayed.

In truth, it isn’t as if the SEC has never turned around to re-examine their rulings in a similar manner before. Just last month, the results of one such review over the Winklevoss bitcoin ETF was released, ultimately re-affirming the initial rejection.

Still, the fallout from this week’s events on the matter of regulatory approval over a bitcoin ETF has left many in the crypto community jaded over what feels to be a continuing uphill battle.

In fact, some have taken to Twitter in accusing the agency, in part jokingly, of using their powers of regulatory disapproval then review to “stress test” the bitcoin markets.

To be fair, market manipulation was a key reason specified for the initial disapproval of all nine ETF proposals, though to the wider crypto community this decision was taken primarily as a barrage of attacks by the agency deliberately meant to hinder the growth of the industry.

A Glimmer Of Hope?

Interestingly enough, the SEC did stop just short of handing down a rejection on all ten bitcoin ETF proposals said to be decided upon in the next two months. One remains in this respect put forth by VanEck and SolidX for a physical bitcoin ETF that commentators in the past have touted as being the strongest candidate of the batch.

As such, coupled with the reality that technically the other nine disapprovals are now pending under SEC review, certain commentators on Twitter see the culmination of this week’s events as reason to believe there might just be a major reversal of fortune in coming weeks.

Who really cares?

Yet, important to note in the midst of the discussion, is a strain of bitterness expressed by some regarding all the hubbub and attention bitcoin ETFs have been sparking as of late. The reoccurring critique by such commentators being that bitcoin ETFs aren’t all that interesting, let alone, necessary for the continued growth of crypto markets.

As such, to the ones that hold bitcoin as an asset otherly in nature from mainstream financial assets and not compatible in the guise of institutional investment vehicles such at ETFs, the rejections by the SEC have been touted as “a blessing in disguise” and a decision for review as nothing more than “overrated” news.

Agree or disagree, for the time being, regulatory approval over a bitcoin ETF remains highly speculative here in the U.S.

For “TenaciousJ” that means one simple fact:   

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Crypto Really (Really) Wants a Bitcoin ETF

The crypto universe has spoken: they want a bitcoin ETF and they want it now.

As CoinDesk previously reported, the Securities and Exchange Commission (SEC) sought comments earlier this summer on the latest effort to get an exchange-traded fund tied to bitcoin approved and listed.

That comments period is now closed, and the SEC is ostensibly going over the input it received – but what the agency ultimately decides is anyone’s guess.

These comments are just a snippet of the 250 that have been made in light of a proposed rule change that would, if approved, give permission to Cboe and blockchain technology firm SolidX to launch a regulated bitcoin ETF.

Dubbed the VanEck SolidX Bitcoin Trust, the proposed ETF would be priced from a bundle of crypto-assets that fluctuates in value primarily in accordance with over-the-counter trading desks, as opposed to online cryptocurrency exchanges.

In addition, SolidX would offer insurance for investors covering loss or theft of bitcoins held by the trust, differentiating it from the most recent bid for a regulated crypto ETF led by the Winklevoss Bitcoin Trust.

As a result of the SEC’s request – and the intense interest in such a topic as demonstrated in the past – economists, CEOs, CIOs, consultants, financial analysts, and more have sent in their comments, all published indiscriminately in a series of posts ranging from the thoughtful to the blatantly comical.

As one Twitter user boasts:

Not all comments were supportive, however, with some seeing the potential approval of a bitcoin ETF regardless of the issuing company as a dangerous precedent and perhaps possibly “the biggest mistake since the creation of synthetic-CDOs.”

Others told the agency:

Nevertheless, the majority of positive comments overwhelmingly drowned out the concern.

Supporters of the proposed rule change argued that a bitcoin ETF would, in fact, make the crypto markets a safer and more trustworthy space for investors to deal in.


And of course, as with any public forum, still others seemed to miss the point of the issue entirely and thought it appropriate to voice concerns for other more pressing matters in their purview.

While the SEC likely expected the onslaught of several different opinions to answer their open call for “written data, views, and arguments,” they may not have been prepared for the fervour at which the crypto community would capitalize on this opportunity to explain to government officials just how badly they want that bitcoin ETF approved.

(That said, it’s not the first time the SEC has been on the receiving end of overly enthusiastic bitcoin supporters.)

The SEC has up to 90 days to take all of these comments – the good and the bad, the wild and the silly – before coming to a decision. As with last year’s drama, only time will tell which decision the agency will make.

Editor’s Note: Some comments captured in this post have been shortened. To see the full comment, click on the comment image.

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FOMO for Dogecon: What You Missed At the Gathering of the 'Shibes'

Admit it: you wish you were there.

Dance parties, rap shows, puppy parades – you name it, Dogecon had it.

And, perhaps more importantly, what this untraditional gathering of the crypto community didn’t have was pretty striking considering the circumstances: a panic over falling crypto prices.

Indeed, as Matt Condon put it on Twitter, “radical positivity” was the name of the day at Dogecon.



The four-day celebratory conference about “the social layer of crypto culture” took place in Vancouver, British Columbia. Built around the cryptocurrency with a Shiba Inu at its heart, the conference received overwhelmingly positive reviews both from attendees and those who watched from the virtual sidelines.

Even the sponsors of the event were largely unabashed on social media:

With over 200 participants having attended Dogecon Vancouver, its success – amplified by crypto Twitter – arguably brought a breath of fresh air to a community that, in recent weeks, has been bogged down with concerning news of hacks, bearish market trends and cryptocurrency forks.

As one enthusiast asked (perhaps rhetorically):

The coin behind Dogecon

The event may perhaps be proof of at least one thing: the near-zealous commitment the project still attracts, with recent charts showing that dogecoin transactions frequently outnumber those of bitcoin cash, the fourth most popular cryptocurrency in the world (by comparison, dogecoin is 40th by market capitalization, according to CoinMarket Cap).

So why the attraction? Dogecoin was always more about its community than challenging its crypto-cousin bitcoin, save for its vastly expanded token supply, faster block-times and viral memes. And the cryptocurrency inarguably suffered a blow in the wake of well-publicized scams like Moolah and the pump-and-dump schemes of Wolong.

Indeed, when the dogecoin first launched, it almost immediately attracted a following friendlier to newcomers in the crypto space than the “overly serious” bitcoin community.

Perhaps that’s SmileyGnome’s (likely rhetorical) point – that events like Dogecon seek to offer an alternative to the toxicity on display in the crypto-community on an all-too-often basis.

Or, at the very least, it’s an opportunity to praise Lord Doge.

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Korea's Exchange Hacks: What the Country's Crypto Scene Is Saying

The past two weeks have seen two South Korean exchanges get attacked and robbed, sparking commentary and critique among the country’s local cryptocurrency community.

It began with the Coinrail hack on June 9. At the time, the popular South Korean cryptocurrency exchange tentatively announced a “cyber intrusion” that saw the loss of $40 million worth of cryptocurrencies.

The exact number and amount of tokens taken from the exchange have yet to be confirmed by the company itself, though a third-party firm assisting Coinrail gave a few estimates in a blog post the following day.

If that wasn’t enough, on June 20, Bithumb – South Korea’s largest by trade volume – also announced a major security breach in which $31 million was reported to be lost. In a post published on their official website the same day, Bithumb reassured customers that their assets were now securely stored in offline “cold” wallets unreachable to hackers and the stolen funds would be fully reimbursed.

Combine this environment with a recent bearish market trend taking the price of bitcoin down in a way not seen since 2014 and you get the kind of social media uproar that questions just about everything.

As one Korean cryptocurrency skeptic tweeted:

Along the same lines, @marco20bil mocked a past Coinrail advertisement boasting its security by uploading a picture of the ad and tweeting at the company:

Anyone would look at this and see it as an insider act, no? Please catch the culprit and restore the platform back to the original state as soon as possible…You said there is no vulnerability of being hacking in an advertisement. Are you joking me right now?”

Digging Deep

For most, it’s not a matter of tech security – that’s a given for those that care – but rather about the people who operate the exchanges behind the scenes.

As @leejongsul78 puts it:

Indeed, much of the community’s ire has been pointed toward those operating the exchanges.

One user, @dongjinkim5, addressed Bithumb directly in light of their urgent notice Twitter announcement to users on June 19, pleading:

Another accused Coinrail of withholding information about what actually went down during the hack.

As might be expected, some of the furor devolved into the downright conspiratorial. For example, one user emphasized the possibility Bithumb may be creating a cover-up by claiming it had been robbed through a hack.

No strangers to risk

As far as answers go, the community can only watch and wait as the investigations unfold.

And as it stands, the government of South Korea is doing some of the heavy liftings there: the Korea Internet and Security Agency (KISA) and the Ministry of Science, Information, and Communication Technology are currently in the process of investigating both hacks, but have yet to make any public disclosures on their findings.

But South Koreans are no strangers to the riskiness of crypto markets, as just last year, another notable cryptocurrency exchange, Youbit, was hacked for a reported $73 million worth of bitcoin, and subsequently, filed for bankruptcy last December.

Nor are South Koreans quick to accept these incidents as merely cyber-related heists by criminals out for the money.

As reported by the Wall Street Journal, speculation arose around the possibility of the true culprit behind the Youbit hack being none other than their adversarial counterpart, North Korea. It has been reported from other sources that this is by no means the first time the South Korean National Intelligence Service has suspected North Korea to be behind cryptocurrency hacks as a method to evade financial sanctions.

One of the alleged targets was Bithumb, which reportedly saw $7 million pilfered during a string of attacks last year.

Still, the avid support of cryptocurrencies in South Korea remains strong, and while the fallout of past weeks events is still taking shape, eyes are not only looking to South Korea, but to the world.

As one South Korean cryptocurrency trader, @sunghq2, put it:

The price impact that the Bithumb hacking will have is determined by the West’s reaction to the incident amplifying Asia’s reaction, which then impacts Asia’s reaction, impacting the West’s reaction, and back and forth.”

It’s just like that (slightly amended) famous saying goes: Back and forth the crypto markets go – where it’ll stop, nobody knows.

Editor’s Note: Statements in this report have been translated from Korean. Not all statements are fully translated. 

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21e800: Bitcoin, Satoshi and the Mystery Twitter Is Obsessing Over

#00000000000000000021e800c1e8df51b22c1588e5a624bea17e9faa34b2dc4a

This is a hashtag, but not just any hashtag. In all likelihood, it’s the longest and most confusing one you’ll ever come across trending in the crypto community.

Posted on June 19 by Mark Wilcox, the hashtag actually represents a cryptographic code known as a hash that’s produced each time new transactions are validated and written onto the bitcoin blockchain. There are several of these written each day, so at first glance, it seems strange that this particular one produced on Tuesday at 19:32:37 (UTC) would be of any groundbreaking importance.

That’s where you’d be wrong.

Well, actually, that’s where you might be wrong.

Some background: There is a theory in physics that attempts to explain the interactions and dynamics of all forces, including gravity, in the universe with one simple mathematical structure known as the E8. Presented in a paper titled, “An Exceptionally Simple Theory of Everything” by Garrett Lisi in 2007, it still remains unproven.

Couple the unsolved status of the E8 theory with the equally unsolved mystery of the exact identity of the person(s) who brought bitcoin – with its supply cap of 21 million coins – into existence, and you get the hypothesis that “21e800” isn’t just some random string of numbers and value. In fact, the theory seems to suggest, it is a “vanity hash” purposefully placed by the creator of bitcoin himself/herself/themselves, Satoshi Nakamoto.

Starting to get goosebumps yet?

If this hash is indeed a “vanity hash” or, in other words, one deliberately created as some kind of sign, the computing power to create it is not only magnitudes greater than is currently capable by the average computer, but the time needed to create it is somewhat jaw-dropping, as shown in a chart posted by developer Andrew DeSantis.

So for all these reasons and a few more (which we’ll get to shortly), several people on Twitter are raving about the sheer impossibility of the existence of this hash, if indeed it was created and purposefully marked by an unknown person(s).


The impossibility of it all has led others to assert that perhaps the true identity of the creator of bitcoin is really something out of this world.


Hold your horses

But before we go jumping to any more wild conclusions, it is important to note the possibility that perhaps this string of characters is just random and simply the output of an ordinary hash function – not engineered by a hidden mastermind.

As Cornell University professor and blockchain researcher Emin Gün Sirer explains, the string of characters “21e8” isn’t all that “magical” and actually occurs about once a year.

To this point, many others have also refuted the idea of a “vanity hash” entirely. Instead, they see the more likely idea being that “21e8” isn’t anything special and might even be a complete hoax.

What’s keeping the magic alive?

What’s clear from the day’s social chatter is that the mystery behind this hash value is closely linked to the mystique – and fascination –  with Satoshi Nakamoto and the creation story of bitcoin itself.

Indeed, a post on the Bitcoin Talk forum highlights how today’s viral mystery is actually a rather old one.

Begun back in 2013, a post dubbed “A mistery[sic] hidden in the Genesis Block” on bitcointalk.org questions the creation of the first verified transaction using bitcoin.

As you may have heard, mining, the activity that verifies or “unlocks” blocks on the blockchain to write in new transactions is getting progressively harder. However, back in bitcoin’s early days, the computing power required to process a block was comparatively lower – and at the same time, the computing processors in use weren’t as powerful as today’s power-hungry ASICs.

To put things in perspective, from unlocking Block 0, the genesis block, to Block 1, the approximate time to transpire was 6 days.

But according to calculations that have to do with the size of nonces – which are basically the additional data values added by miners to the hash function in order to get the appropriate hash value validating the next block – the approximate time to unlock Block 0 was only 4.2 minutes.

How is that possible?

Alas, that mystery persists. Perhaps, as in the words of @nondualrandy, these are all a series of “easter eggs” strategically planted to keep the magic behind bitcoin alive.

Ready to go hunting?

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EOS May Be Live But the Debate with Crypto Critics Continues

After a messy weeks-long process, CoinDesk broke the news yesterday that the EOS blockchain is officially live.

To some, it’s already an event for the cryptocurrency history books.


Still, if you haven’t been following the event closely, it might beg the question, ‘What is EOS anyway?’

When we talk about EOS, think about a cloud computing service like Amazon Web Service. It’s a platform for the storing or hosting of data, except rather than using a centralized server, EOS is attempting to distribute the data in a distributed system using blockchain technology.

It was created by blockchain startup, Block.one, and was able to gather over $4 billion to develop its open-source software over a year-long initial coin offering (ICO).

Last week, however, Block.one turned its code over to the world, or more specifically, to developers willing to work on the software as well as 21 block producers who will approve its transactions. The idea is that, in order to be more efficient than your average blockchain, EOS reduces the number of individuals or companies that can validate transactions.

Rather than competing in a global open market like bitcoin’s, users who own tokens are constantly voting for block producers.

The votes

Sounds pretty ideal right? Well, the trick is getting a global network no one is supposed to control off the ground.

Some questioned the set-up, as it ensured the voting process went on for some time while all the distributed users of the network struggled to coordinate. In this way, the more damaging criticisms might come from those who were eager to point out this has been done before (with varying results).


Overall, it’s safe to say this voting process looked a bit confusing from the outside, and other market observers were perhaps a bit too quick to cast judgement.

Some even went so far as to blame the plan of action for the token’s poor market performance over the last few weeks.


Education to come

These comments point to a central issue – EOS operates differently than other blockchains.

This means it’s still taking the industry a while to see what EOS is trying to create and that this vision actually adds value to the users it wants to reach.

As long-time industry observers point out, it’s still not really clear who would want a blockchain that’s not that decentralized. After all, blockchain believers cite decentralization as a key advantage of blockchains over the existing financial system.

As these tweets show, some already have their minds made up about how EOS will work.

Some even go so far as to argue past investments are influencing current opinions on the project.

But with EOS is ranked as the number five cryptocurrency on CoinMarketCap, there are those who remain eager to defend its vision.

As the tweet below shows, crypto Twitter might be divided on this view for some time to come.

EOS money image via Shutterstock

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6 Outrageous Moments In Crypto Twitter Scam History

Scammers are a nuisance.

Perhaps nowhere else within the cryptocurrency space have scammers become more frustrating than on crypto Twitter. The social media site has been overtaken with accounts impersonating notable figures and businesses promising tens of thousands of bitcoin or ether or XRP, in return for users merely sending a small amount of a cryptocurrency to their accounts in return.

While it might seem intuitive that these giveaways are suspect, the fraudsters are playing to people’s FOMO (fear of missing out), but also the language and cultural barriers that exist within the diverse, global community.

Indeed, crypto aficionados of all kinds – not just the most prominent founders, but also low-profile developers and newly announced ICO issuers and nearly everyone in between – wake up every morning, scouring their Twitter accounts and reporting the abuse to the social networking giant.

Yet, it seems there isn’t an easy way to stop the shakedowns.

It’s led many crypto visionaries to go about getting Twitter’s blue check mark, a sign that an account has been verified and so, supposedly more legitimate. But even that has proved manipulable.

Airing frustration towards the chaos that crypto Twitter has devolved into, a well-known cryptocurrency advocate known as Thomas ‘Mad Bitcoins’ Hunt tweeted:

“Your system is broken. Allowing users to choose the same name and image as other users is a mistake that leads to fraud. Change your system. End this fraud.”

But still the chaos has continued (if not gotten worse), and many crypto enthusiasts are deciding if you can’t beat ’em, you might as well laugh at ’em.

As such, they’re tweeting out the most egregious interplay between themselves and the scammers, and sometimes one con man to the next.

1. Not giving away ETH, but giving away ETH

The instances of impersonation have gotten so bad, that many crypto visionaries have added language to their profiles stating “[Not giving away ETH/BTC]” – as if it was their middle names.

But, although it could seem counterintuitive, as these fraudsters merely copy and paste the name and image onto their scam accounts, that language too has carried over.

Generally, these accounts comment their giveway images under a post from the real person they’re trying to impersonate, hoping to pray of users that aren’t looking closely at the handles, which at times are only one letter off from the originals.

And as scammers have become more sophisticated, they’ve taken to blocking the person they’re trying to impersonate, so that that person can’t see their posts, report it and get shut down by Twitter.

2. Follow Fridays

Just like the scammers above try to confuse users by putting their fake posts side-by-side the people they’re impersonating, other scammers have jumped on posts where many people are mentioned.

Recently, South African crypto exchange, iceCUBED, tweeted out a list of crypto notables for what has become known as “Follow Fridays” – whereby a user tweets out people that their followers should follow.

I was featured alongside folks like monero lead maintainer Riccardo Spagni, Lightning Labs founder Elizabeth Spark and litecoin creator Charlie Lee (I know, I’m not worthy).

Right under that post, though, another user by the same name, but with a different handle, posted about an ETH giveaway.

And in that way, some unsuspecting users could think that not only the exchange but also the people tagged in the post support the promotion.

While journalists might seem strange characters to impersonate (especially since I’ve written about not being a crypto millionaire), it has become a popular move since they typically have significant followings of users of all skill levels, including newbs to the cryptocurrency scene who might not be well-versed on the state of the industry.

3. Getting personal

Another way scammers (whose accounts generally have only a couple followers and whose only tweets are the ones about the giveaways) are trying to trick users is by creating more personal accounts.

For instance, a Twitter user names Dennis Parker was recently impersonated. The account copied and pasted his name and picture but the bio was very different.

Whereas the real Dennis Parker’s bio just says, “Bitcoin Maximalist,” the scam account (which was still active at the time of this writing) says, “Foodie, Editor, Water Protector, Wine Connoisseur, Unwashed Mass. I own 25 hoolahoops.”

As Parker tweeted:

“My scam accounts are getting personal.”

Not only that, but scammers have also gone to other lengths to try and bilk users out of their crypto. Notable venture capital investor Tim Draper, tweeted about one of his impersonators asking his followers for funds in exchange for mining bitcoin for them.

4. Scammers calling out scams

Most people in the crypto scene know Neeraj Agrawal, the communication lead at Washington D.C.-based lobbying group Coin Center and also a meme god on crypto Twitter.

Lesser-known is NeerajKAgrawal7, who recently replied to an offering of ETH with one word – “scam.”

While that might not seem particularly surprising, what’s absurd is that the response came from one of Agrawal’s imposters, not Agrawal himself.

As Agrawal tweeted, “My ether scammer is calling out other ether scammers.”

In a similar instance, an account posing as Bruce Fenton (the thought leader and investor in the cryptocurrency space who founded Satoshi Roundtable) commented with its own crypto giveaway on the giveaway post from a fake Mad Bitcoins.

Speaking to the event, Mad Bitcoins tweeted:

“It’s a beautiful cycle of spam Twitter and you should make it stop!”

5. Tons of Charlie Shrem’s

As mentioned above, many of the most acclaimed people in the cryptocurrency space deal with insane amounts of scam accounts.

Case in point, Charlie Shrem, the founder of now-defunct early bitcoin exchange BitInstant and now an adviser for several blockchain projects, tweeted recently about all the scam accounts under his name.

He said:

“I do give away stuff from time to time, but will never ask you to send me something first.”

The tweet was accompanied by images which display just how rampant the scam accounts have become.

Another crypto character that gets impersonated quite a bit is John McAfee, who became famous after launching the popular anti-virus software, is now promoting ICOs on Twitter for a charge.

Yet, many crypto enthusiasts might not sympathize with McAfee since they see his new “job” as dubious.

In fact, McAfee’s latest ICO-promoting tweet featured Pink Taxi Coin, a fraudulent ICO project that featured a plagiarized white paper and website, among other red flags.

6. “I’ve made it”

While these impersonators have become a scourge on crypto Twitter, some have taken to joking about how having a scammer impersonate them is a way to display that they’re popular.

A prominent parody account in the space, Swift on Security said, after a fraudster impersonated the account, “I’ve made it. I’ve finally made it.”

As such, Kevin Pham, who became a staple of crypto Twitter this year, tweeted (after being impersonated):

“Fuck blue checks. Having a scam account is the free market signalling you’re a somebody on Crypto Twitter!”

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Bad Checks: Twitter's Identity Crisis Is Costing Users More Than Bitcoin

Trust, but verify.

Borrowed from a Russian writer, it’s one of crypto’s most widely embraced slogans, though one that’s becoming even more relevant on social media, where battling factions bent on promoting the next great high-tech investment are now turning the very symbols meant to protect users against them.

Whether it’s an account impersonating the world’s largest exchange or its most widely known tech visionaries, no company or individual is too sacred for a simple takedown that’s spreading like wildfire, propelled by lax verification practices at name-brand social media giants.

Still, it’s perhaps “crypto Twitter” that’s bearing the brunt of the criticism.

Armed with a photo ID, scammers are successfully duping Twitter into giving them a “blue check mark” of authenticity so they can impersonate real individuals and entities, all in an effort to bilk users out of money.

Take “seifsbei,” a verified account associated with freelance film producer and director Seif Elsbei, which was hacked and then posed as the official account of the verge cryptocurrency. The hacker didn’t stop there, later posting messages as crypto exchange Bitfinex and ethereum creator Vitalik Buterin.

The verified account “Protafield” displayed similar bad behavior in early April, briefly changing its name and account details to impersonate crypto exchanges to specifically stage fake ether giveaways.

And these incidents display how crypto Twitter’s current mess isn’t likely to be saved merely by the blue check mark, or any other simple verification process.

“People at home see this as a stamp that Twitter sees this as a good account, which can be very subjective,” said Tim Pastoor, founder of the Netherlands-based digital identity startup 2way.io.

By vetting merely the identity behind the account, and not the intent, when issuing blue check marks, Twitter inadvertently makes scams even more dangerous, he continued.

Speaking to the overall cat-and-mouse game many crypto companies are having to play on Twitter, a Bitfinex representative described curbing such efforts as almost a full-time job.

A spokesperson told CoinDesk:

“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.”

Fickle reputations

There are several patterns that complicate the trouble with crypto Twitter.

For one, scammers have quickly learned to use highly technical language to cloak misinformation in trusted terminology, said Nick Lucas, founder of the Los Angeles-based social media analysis startup CoinTrend. This means simple vocabulary lists and language analysis, processes Twitter and other social media sites use, won’t be enough to weed out scams, he said.

Yet, Pastoor pointed out that bots and spam accounts often promote tokens in packs, swarming to give each other good reputations and boost visibility, which could make it easier to spot systematic scams.

However, it remains a tricky endeavour, and so Pastoor recommends that Twitter take a page from traditional psychology to help combat the problem.

Most people trust their close friends more than acquaintances, so a layered approach to trust could offer some tools for filtering the noise. For example, a user may trust a coworker’s friend more than a complete stranger, but less than a family member. Just as Facebook lets people control which people they see posts from – friends only, select groups or the public – Twitter could give users more control over who shows up in their feeds.

“There are definitely going to have to be iterations,” Pastoor said. “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.”

Twitter declined to comment on any topic related to these events or policy changes in general, but Twitter CEO Jack Dorsey recently admitted that the platform’s verification system is broken.

Changing hands

The issue is made even more confusing by the fact that accounts can change hands among owners, not only through hacks, but also simple handovers, and those new owners may have different motives.

For instance, what started much of the debates around Twitter’s policies was the suspension of the “@bitcoin” Twitter handle.

Before the bitcoin scaling debate came to a head last fall, with a significant contingent of enthusiasts splitting off the core bitcoin network to create bitcoin cash, the @bitcoin Twitter handle tweeted information in support of bitcoin. The account has been operated by many owners over the years, and the latest is an anonymous bitcoin cash fan.

As such, the account became highly controversial, tweeting out incendiary comments aimed at Bitcoin Core developers and several other leading figures in the cryptocurrency community who were on their side. Many Core developers saw this as misleading, since the handle was tweeting out things Bitcoin Core, which a majority of users and businesses still see as the “true” bitcoin, didn’t stand behind.

Because of the outrage, Twitter briefly suspended the account and then stripped it of its blue check mark (the account is active again but no longer verified).

Speaking to the debates that have plagued the leaderless tech community for some time, Sterlin Lujan, a bitcoin cash supporter and communications ambassador for Bitcoin.com, told CoinDesk:

“These social media networks should not allow handles to be censored or shut down arbitrarily, just because a bunch of people do not like it.”

And while Twitter has said the blue check mark does not imply its approval or endorsement, Lujan contends, “A person with a check mark has a stronger likelihood of appearing at the top of searches and feeds. What it boils down to is that Twitter verification processes need to be made more clear.”

Market influencers

While Twitter’s verification process is still uncertain, what remains clear is Twitter’s impact on the cryptocurrency markets.

Not only can scammers have a dire impact on user’s crypto holdings, but even those earnestly voicing their interest in a certain crypto project can cause price swings. For instance, Lucas has seen a clear correlation between tweets from influential Twitter accounts and market volatility.

“There’s basically a lot of influence on Twitter when John McAfee or someone mentions a specific coin,” Lucas said.

As an example, when McAfee tweeted about “burst,” a crypto token project focused on creating a “greener” mining process, on December 22, the price of the cryptocurrency quickly doubled.

A similar, albeit temporary, spike happened the previous week when McAfee tweeted about another crypto token project, Safe Exchange Coins. The day before McAfee’s tweet, the cryptocurrency was selling for roughly a penny each, but within 24 hours of the tweet, the price doubled and by the following week, the coin briefly sold for more than $0.06.

Some argue that when McAfee charges $105,000 per tweet, he’s basically advertising for companies for a fee. However, he told CoinDesk it’s not really advertising because he only promotes projects he truly believes in.

Twitter chatter doesn’t only drive prices up for new cryptocurrencies and crypto tokens, though. It can also have negative impacts as well.

For example, Lucas has noticed that a lot of Twitter feuds about bitcoin code changes and technical updates correlate to price dips.

“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,” Lucas said, adding:

“There’s a lot more influence coming from specific accounts, unlike, say, Reddit, which pushes more topics to be talked about rather than creating influence.”

Twitter account on computer screen image via Shutterstock

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