Blockchain will save the market from manipulation in the era of fake news

Due to the lack of regulation, digital currencies remain highly vulnerable to market manipulation. One of these manipulation tools is “fake news,” which is actively used for speculation in the cryptocurrency market.

For example, you can take the news about the “death of Vitalik Buterin” last year, which reduced the price of Ethereum by 11%.

The popularity of social networks such as Twitter has influenced the emergence of a business that is built on manipulation and disinformation. It is closely related to the jump in the value of digital currencies.

A striking example: the darknet service TheInside, whose main task is to deliberately “pump up” the value of altcoins by distributing various messages on social networks. In his report, Michael Marriott, an analyst at online security firm Digital Shadows, talks about it.

“TheInsider then resells cryptocurrencies, using multiple accounts he owns, thereby raising their value, and then sells them on exchanges to traders seeking to purchase coins when prices rise,” Marriott notes. He believes the main reason for manipulation is the lack of regulation of cryptocurrency.

Sometimes fake news is launched in order to bring down the price of a particular cryptocurrency or, conversely, increase it. For example, WhatsApp has closed groups in which traders coordinate efforts and “play” with raising or lowering prices. Access to such communities requires a fee.

Cambridge Business School researcher Garrick Hileman sees the reason for manipulation as independent research is available to investors in more consolidated asset classes, such as stocks. Thanks to them, you can realistically evaluate the benefits of investments.

“For example, about 30 companies constantly publish research results on the shares of Facebook alone. While the total market capitalization of crypto assets is roughly half that of Facebook, none of them have the same level of coverage,” Hileman notes.

However, the likelihood that the problem will be solved is very high. Blockchain technology itself will help change the situation, creating a new model of journalism. Currently, there are already many projects whose main goal is to create this model with a decentralized source of funding and rewards for their readers..

So, PressCoin is developing a system that will provide cryptocurrency rewards to readers depending on their activity in the system. The project's white paper states that activity will be measured in "community-controlled ways that allow real-time calculation of the value of each user or node for the entire system." Aggelos Kiayas, director of the blockchain technology laboratory at the University of Edinburgh, is also of the opinion that blockchain can lead the media out of crisis.

"In particular, blockchain can be used to track the reputation of news sources, says Kiayas. “Such a solution would allow freelance journalists to use social networks and online platforms like blogs to inform the general public, while at the same time providing readers with the opportunity to assess the reliability of the source.”

At this stage, it is too early to predict the effectiveness of projects like PressCoin. Despite this, it can already be stated that blockchain influences disinformation schemes and helps combat manipulation in the digital currency market.

According to https://cryptocurrency.tech