That’s The Way The Bitcoin Crumbles

Is Bitcoin imploding? It’s a question that needs to be asked.

Bitcoin Crumbling
Source: TheDigitalConsultant

In the past few weeks we have had the Mt. Gox Bitcoin exchange go ‘belly up’ in a rather spectacular fashion. It reportedly lost 750,000 Bitcoins, blaming its demise on a ‘bug in the Bitcoin system’.

This has been followed by Canada’s Flexcoin who closed down after losing around 440,000 euros worth of Bitcoins to hackers.

Today there are reports of the American CEO of Bitcoin exchange company First Meta, who is based in Singapore being found dead near her apartment. The reason for her death has yet to be explained.

Also today we finally discover, through the investigations of Newsweek, who the founder of Bitcoin actually is. Mr Satoshi Nakamoto is a 64-year-old Japanese-American and has subsequently disowned the project and strongly denies any current association with the crypto-currency.

I am no longer involved in that and I cannot discuss it,” he says, dismissing all further queries with a swat of his left hand. “It’s been turned over to other people. They are in charge of it now. I no longer have any connection” he told Newsweek.

However, all is not what it seems as it turns out that the Mr Nakamoto was in fact NOT the creator of Bitcoin after all.

It is barely two days since the Monetary Authority of Singapore (MAS) issued a warning to consumers and businesses ‘to be cautious with transactions involving Bitcoin, as virtual currencies are unregulated and consumers may not have legal recourse should there be problems’.

Clearly this prophecy has come to pass and these recent developments are hardly reassuring for those who have taken the plunge and are, or were, playing the Bitcoin market.

Not to be deterred, Singapore also recently installed two Bitcoin ATM’s where people can insert their hard-earned Singapore dollars and convert them to Bitcoins.  I shouldn’t imagine there is much of a queue to do so given all of the above.

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I Know What I ‘Like’, Or Do I?

Somewhere in the steamy streets of Dhaka an earnest posse of veiled women and young men are busily becoming admirers of a bevvy of stars and businesses around the world.

They are employees of what are euphemistically termed ‘click farms’; a sort of agricultural production line of fake ‘Likes’ that pepper Twitter, Facebook and other social media.

In the good old days we had automated bots that did this job and social media companies such as Google waged a war to counter the automated trend.  To a certain extent they won the battle, but the fake brigade still smelt money and re-focused  their operations on human keyboard-tappers instead.

While the capital of Bangladesh, Dhaka, is a recognised hub for click farms so are other places such as Cairo and Indonesia.  It is no coincidence that these centres are located in countries where workers get paid a pittance.The Guardian reports

For the workers, though, it is miserable work, sitting at screens in dingy rooms facing a blank wall, with windows covered by bars, and sometimes working through the night. For that, they could have to generate 1,000 likes or follow 1,000 people on Twitter to earn a single US dollar.

Another dubious example is Shareyt, whose owner Sharaf al-Nomani, told the same newspaper that: “around 30% or 40% of the clicks will come from Bangladesh“. The Guardian equated this statistic to 25,000 people in Dhaka repetitively punching their computer keyboards, hour after hour, to enhance the visibility of a client’s product or service.

But these sweatshop conditions doesn’t seem to deter well known clients; some of which may surprise you.

For example, the USA State Department recently had its knuckles rapped for spending US$630,000  to boost its Facebook fan following.  Most of these new fans came from Cairo, which given the current political sensitivities has an aura of the absurd.

There is nothing covert about click farm companies and the ‘Likes’ they generate are quite genuine, in the sense that a human being created the action.  Take a company such as Its domain name choice is clearly not attempting to mask its activities.  If I was so inclined I could buy 10,000 ‘real worldwide likes’ for less than $US100.

Practical yes, ethical…barely. So why do businesses indulge in such activities?.  

The greatest motivation is fear. Fear that their enterprise will look pathetic with its 200 genuine Facebook Likes compared to Competitor X down the road who has 10,000. A common belief is that customer perception of their brand might be adversely affected by such a discrepancy in numbers.

While there may be an element of truth in this assumption (according to  research 31% will check out reviews, ratings, likes and followers before buying), buying 1 million twitter followers from an Indonesian web entrepreneur for $US600 for your farmhouse cheese brand, isn’t necessarily going to solve your online marketing woes.  

Customers are becoming increasingly aware of the ruse and the more savvy they become, the less effective these click farms buy-ins will be.

But one business often begets another. Click Auditors are the new breed, with London’s Status People being one such service provider. They assist companies to block out the fakes for as little as $US5.50 per month.The real trouble for a business begins when you start to believe your own marketing hype and strategically plan based on false social media analysis. I would like to say that such folly does not exist but regrettably it does.Of course this being a genuine blog post I would welcome genuine ‘Likes‘ and ‘Followers‘ – although it is highly doubtful that Mr Sharaf al-Nomani, will do so personally.


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2013 in review

The stats helper monkeys prepared a 2013 annual report for this blog.

Here’s an excerpt:

A San Francisco cable car holds 60 people. This blog was viewed about 2,600 times in 2013. If it were a cable car, it would take about 43 trips to carry that many people.

Click here to see the complete report.

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