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What mechanisms does OTC web of trust have against someone creating several accounts and trading between with themselves over a period of time, giving each other perfect ratings.

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The global ratings are fairly easy to manipulate as you describe, and it has been done before. There is some minor protection provided by the requirement that you need a positive OTC rating to rate anyone else.

#bitcoin-otc also supports "trust rating" (example) which can't be easily manipulated.

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