Shill Bidding? Is it evident/Problematic to our community?

[Kazkaz27]

Shill Bidding is Prohibited on Most Major Platforms.

Shill bidding—where a seller or their associates place fake bids to artificially drive up the price of an item in an auction—is widely regarded as unethical and often illegal because it distorts the natural bidding process and harms genuine participants. It can deceive buyers into paying more than the item’s true market value, creating an unfair advantage for the seller while eroding trust in the auction system as a whole. In many jurisdictions, it’s classified as fraud, potentially leading to legal consequences like fines or shutdowns for those involved. Even in cases where a form of it might be disclosed, it still raises concerns about transparency and can expose systemic issues in markets like collectibles. Overall, it skews prices, discourages fair competition, and can damage the entire hobby industry.

The pressing question here regarding this topic is “is shill bidding acceptable here?”

[rat03gopoh]

Obviously that is unethical and should not be allowed.
I think a better question is: how to identify such activity? The thing is, having an alternative account is allowed here. Accusing the wrong person will reduce the engagement of future organic auction participants

[Kazkaz27]

Thank you, rat03gopoh.

Very valid response.

So it would seem problematic as well as something that can/does easily exist/flourish in the space due to the environment of the space itself. You speak truth, the solution to the shill bidding issue is not something that can be easily fixed. It may just be impossible to combat due to the circumstances.

My next question: Where to go from here? (Suggests on how to identify such activities)

[rat03gopoh]

My next question: Where to go from here? (Suggests on how to identify such activities)

So far, I haven't thought about it. It would be a good idea to adopt additional auction rules like those found elsewhere, such as:

• Hosted by an independent escrow member(s)
• Auction entry fees
• Blind auctions (if possible)

Here, public auctions without escrow and without a blind mechanism are structurally vulnerable to manipulation by sellers/auctioneers.

[lornadane]

I see shill bidding as more than just a pricing issue, it’s a reputation issue. Once people start suspecting fake bids, every auction becomes questionable. Even if it’s not explicitly spelled out in every thread, the spirit of the marketplace is fair play. Anything else deserves negative trust feedback imo.

[Kazkaz27]

My next question: Where to go from here? (Suggests on how to identify such activities)

So far, I haven't thought about it. It would be a good idea to adopt additional auction rules like those found elsewhere, such as:

• Hosted by an independent escrow member(s)
• Auction entry fees
• Blind auctions (if possible)

Here, public auctions without escrow and without a blind mechanism are structurally vulnerable to manipulation by sellers/auctioneers.

Hey, rat03gopoh

Thanks again for the reply. Your feedback and insight is much appreciated.

I believe those are probably some of the best suggestions that could help. At the very least as a preventative. Not sure how bulletproof every element is. I like the idea of entry fees. I think that is the most effective considering it’s an upfront cost to bidders and that the number of entries could be validated on the blockchain if participants were required to sent to a public address for the auction entry fee.

As for escrow and hosting through a trusted source I believe that’s smart and is mostly how things operate now.
(The issue of Shill Bidding is not really addressed by this or if it is please let me know how)

I am curious about Blind auctions. (How would/could that work?/how is that a possible preventative?)

I see shill bidding as more than just a pricing issue, it’s a reputation issue. Once people start suspecting fake bids, every auction becomes questionable. Even if it’s not explicitly spelled out in every thread, the spirit of the marketplace is fair play. Anything else deserves negative trust feedback imo.

Hello, lornadana

Thanks for chiming in.

I too see shill bidding as a serious issue that I’m not sure has ever been addressed fully. I’m hoping we might be able to come up with some solutions together to better the space and prevent this unethical and possibly criminal activity. I too think that reputation is tied into this. It is social engineering the system in a diluted way.

I want to give credit to a member named howardsentell [https://bitcointalk.org/index.php?action=profile;u=3725863] who attempted to address this issue twice but had his post deleted/removed anonymously 2 times by moderators. (This to me is also concerning)

[rat03gopoh]

I am curious about Blind auctions. (How would/could that work?/how is that a possible preventative?)

There are actually several different technical arrangements, but the main point is that the host keeps all participants' bids confidential until the auction ends. For example:

• The host (escrow) starts an auction event thread.
• Each participant submits a bid and attaches proof of entry (payment txid) via PM to the host (or simply publishes the txid in the thread and the bid amount via PM).
• At the end of the auction, the host will publish all received bids along with the proof of entry (txid).

Keeping the bid amount and/or bidders confidential makes it difficult for shillers to identify the latest high bid. And, thanks to the entry fee requirement, it will prevent them from submitting multiple bids.

[Kazkaz27]

I am curious about Blind auctions. (How would/could that work?/how is that a possible preventative?)

There are actually several different technical arrangements, but the main point is that the host keeps all participants' bids confidential until the auction ends. For example:

• The host (escrow) starts an auction event thread.
• Each participant submits a bid and attaches proof of entry (payment txid) via PM to the host (or simply publishes the txid in the thread and the bid amount via PM).
• At the end of the auction, the host will publish all received bids along with the proof of entry (txid).

Keeping the bid amount and/or bidders confidential makes it difficult for shillers to identify the latest high bid. And, thanks to the entry fee requirement, it will prevent them from submitting multiple bids.

I think you solved it. Very well done. Thank you, rat03gopoh.

[cryptoaddictchie]

The pressing question here regarding this topic is “is shill bidding acceptable here?”

Shill bidding should not be acceptable here because it undermines fairness, transparency, and trust in the marketplace and even if it seems harmless to some, it distorts true market value, disadvantages honest participants, and can expose the platform and its users to ethical and legal risks. That's my opinion but could be different for others.

[Kazkaz27]

The pressing question here regarding this topic is “is shill bidding acceptable here?”

Shill bidding should not be acceptable here because it undermines fairness, transparency, and trust in the marketplace and even if it seems harmless to some, it distorts true market value, disadvantages honest participants, and can expose the platform and its users to ethical and legal risks. That's my opinion but could be different for others.

Very well stated. I have to agree. It’s truly unfortunate but I am inclined to believe that’s it’s a deep seeded issue that hasn’t been fully explored/situated. It’s an ongoing issue that’s not really addressed or combated against.

Regarding rat03gopoh’s idea of Blind Auctions which I think is a great solution to this so long as there is transparency involved after the acquisition of items involved in an auction. - Building on this idea, perhaps an account made solely for this purpose that discloses bids (private messages) that occurred to showcase that the host of the event/auction is acting in good faith. (The idea is to separate a users personal private messages and auction entry’s/bids)

My next question: What is the best way to propose this idea so that it may become common practice here on the forum for auction hosts?

An incentive might be auction hosts get to keep entry fees. (Just a thought)💭

[bitgolden]

Unfortunately I have seen it too much, in fact once upon a time I was part of a project that did it, not anymore of course because they are already gone but they tried to do it. They increased their volume by fake trading between the buy and sell levels so that it would look like they are doing something but the reality was that it wasn't getting that much volume at all and it was all fake. These people ruin the market a lot and those shill bidding people are the same and ruining the market.

[rbynxx]

Nah man, shill bidding is definitely not cool here. It ruin trust and make prices fake high, the real bidders just want some fair play, not those scam vibes. It's better to keep things clean if we want some good market. Of course, anything that is deem illegal should not be tolerated especially in a forum.

[Furball808]

My next question: Where to go from here? (Suggests on how to identify such activities)

The same way we detect alt accounts. Account that has a suspicious activity count and only posts in auctions. If the accounts have any striking similarities and etc,. Timing may also be a good indicator. If the auction is not gaining enough interest, shilling may take place.

[Stalker22]

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My next question: What is the best way to propose this idea so that it may become common practice here on the forum for auction hosts?

Have you seen this kind of thing happen here before?  If so, speak up.  Just so we are clear, shill bidding is wrong and should not be tolerated.  Its basically fraud.

Its usually easy to spot when the same few accounts keep pushing up prices but never win.  If you think an auction seems fake, call it out publicly so everyone else can decide for themselves.

[aysha9853]

I do not see any scenario where shill bidding is acceptable, calling it normal or harmless is just coping, it creates fake demand and new users are the ones who usually get burned, if we want fair pricing this should be called out every time.

[Alphakilo]

In the real world we may have new regulations rising to target shill bidding, but in this our online community reality it could almost only be detected by eagle eyes especially for projects with expected large prospects.

In the real world where this happens during bidding, a Blockchain explorer like solscan or Etherscan to check if top bidders have anything to do with the creators mostly a link to the creator's account is used, but I don't know what tools can assist here because I believe there would be tools already developed to meet this need.

[Kazkaz27]

Attaching this post for a vote 🗳️
https://bitcointalk.org/index.php?topic=5569069.0

It’s a certainty that shill bidding does occur. Currently there is no protection against it and it is hard to expose even if you have firsthand accounts/experiences. Patterns are suggestive and add up but they are speculative and not considered hard evidence. I have seen patterns and had accounts from members regarding the issue. It’s a matter that hasn’t been fully addressed and is not easily proven but is clearly given the opportunity to flourish here without guidelines to prevent it.