Fake News in Crypto
The crypto industry is complex. It requires an individual to understand technology, business, economics, law, and politics. Each of these concepts are tough to tackle by themselves, let alone under the context of a global, decentralized, digital world.
Fortunately, we have the internet. There is a seemingly unlimited amount of information available at our finger tips. These sources of information range from professional media outlets to meme-filled subreddits — if you are interested in something, there are people somewhere willing to talk about it.
Unfortunately, there is also a lot of inaccurate information as well. Whether it is a company’s financial performance, the behind the scenes actions of a leadership team, or even quantifiable metrics surrounding the performance of a piece of technology. We all see numbers, unverified reports, and “inside information” flying around the internet.
My hypothesis is that a material percentage of the information we consume in crypto is “fake news.” Sometimes these inaccuracies are labeled as FUD (fear, uncertainty, doubt) and other times they rapidly spread as fact. In order to better understand the nuances of this phenomenon, I designed an experiment.
What would happen if I intentionally created a tweet that was inaccurate and presented it as fact?
It took me a few days to think of the proper tweet for an experiment like this. I wanted to make sure the inaccuracy (1) wasn’t harmful to anyone, (2) would be believable by majority of people, and (3) was related to something in crypto that people cared about. It was honestly harder to design than I originally thought.
Eventually I settled on a tweet describing the probability of winning the lottery vs owning Bitcoin.
The tweet is easy to read, related to recent news (MegaMillions lottery) and appeals to the emotion of cryptocurrency enthusiasts across the world. At the same time, the tweet includes inaccurate statistics and compares a game of luck to a purchase decision.
I had a feeling that this tweet would go viral. It was the perfect mixture of fact and fiction, mixed with bullish sentiment. To ensure maximum effect, I tweeted it on a Friday night around 10p EST (one of the highest engagement times on Twitter).
Within minutes of tweeting the experiment, the engagement and subsequent virality was obvious. Within the first 10 hours, I was able to reach 88,000 people with a tweet that was mathematically proven to be inaccurate.
The good news is that not everyone was fooled by the tweet. Numerous people called out the inaccurate math or the irrational comparison. At the same time, plenty of people were fooled — almost 400 people retweeted the information without catching the issues. The implications are quite scary when you think about it.
This brings me to the my point: Crypto has a high propensity for fake news. The concepts are complex, the information is often hard to corroborate, and most “inside information” is user-generated content on Twitter, Telegram, Reddit, etc.
We must remain vigilant. Decisions are being made by lawyers, regulators, law enforcement, and entrepreneurs based on the information they consume from the community. If we aren’t careful, we may end up shooting ourselves in the foot.
Remember the golden rule of crypto: Don’t trust, verify.
SIDE NOTE: This was a one-time experiment. I don’t plan to make this a regular thing so don’t worry about future tweets being part of an experiment :) I have also deleted the original tweet to ensure the inaccuracies don’t continue to spread.
Some of the crypto-focused information sources I have found to be most accurate are CoinDesk, The Block, and Messari. If you’re interested in staying on top of the industry, while avoiding the fake news, you should give them a follow.
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