Is Ethereum (ETH) a Scam?

Why controversy?

  • A. DAO hack
  • B. Centralization concerns with EEA
  • C. Vitalik comments on pedophilia
  • D. Multiple co-founders leaving after disagreements couldn’t be resolved
  • E. Anyone can build on it, making it a platform on which multiple scams have launched
  • F. Multiple delays for launching ETH 2.0

1. Do they make bombastic claims?

While I’ve never seen Vitalik or anyone on the ETH Core team make claims that guarantee high returns, bombastic claims aren’t limited to promises of ROI. Ethereum from it’s inception has been a huge project, aiming to provide multiple solutions for everything from gaming developers to enterprise, DeFi, and beyond. Might Ethereum’s claim that they’ll be able to handle transactions at scale while still providing a decentralized platform on which developers can build a multitude of applications might itself be bombastic?

  • A. “The Foundation for our digital future” – open access to digital money and data friendly services regardless of background or education
  • B. Banking for everyone
  • C. A more private internet
  • D. A peer-to-peer network
  • E. Censorship-resistant
  • F. Commerce guarantees
  • G. Compatibility-by-default

2. Is there a tiered-referral system?

No

3. Where can it be traded/used?

ETH is the second largest crypto by market cap (July, 24 2020 8:52am MST), and therefore it’s traded on most exchanges. It’s also used for gas fees when sending ERC20s or other ERC tokens on the blockchain

A. Exchanges

  • i. Binance
  • ii. Huobi Global
  • iii. Okex
  • iv. Coinbase Pro
  • v. HitBTC
  • vi. BitMax
  • vii. Kraken
  • viii. BKEX
  • ix. ZB.com
  • x. CoinBene
  • xi. Bitrue
  • xii. Coineal
  • xiii. Bitfinex
  • xiv. BW.com
  • xv. DigiFinex
  • xvi. ZBG
  • xvii. Bibox
  • xviii. HBTC
  • xix. Lbank
  • xx. KuCoin
  • xxi. Gate.io
  • xxii. FTX
  • xxiii. Upbit
  • xxiv. CoinTiger
  • xxv. Bithumb
  • xxvi. MXC
  • xxvii. WhiteBIT
  • xxviii. Bitstamp
  • xxix. BitFlyer
  • xxx. VinDAX
  • xxxi. BigOne
  • xxxii. Poloniex
  • xxxiii. BitZ
  • xxxiv. CoinEx
  • xxxv. LATOKEN
  • xxxvi. BitUBU
  • xxxvii. TOKOK
  • xxxviii. Coinone
  • xxxix. P2PB2B
  • xxxx. Gemini

B. Used

  • i. Anywhere that processes payments using BitPay, which is what I most frequently setup for small business that I convince to accept crypto because it auto-converts to fiat, giving merchants peace of mind
  • ii. Staking rewards
  • iii. Can be used on some defi platforms for staking rewards
  • iv. Some dark web markets allow ETH payments

4. Is it legal in the US & other regulated countries? Why or why not?

Yes, with many American companies on the EEA, Ethereum is absolutely legal in the US, despite some controversy over how the team ran the token sale. In June 2018, the SEC officially ruled that ethereum (ETH) is not a security, despite some community members saying the SEC was wrong. In any case, we do now know that ethereum is not illegal and will not be retroactively deemed a security

5. Do actual experts promote it?

Numerous people who have been active in the cryptography and development of bitcoin from its inception have touted Ethereum’s merits. Even Nick Szabo, who many insist is the man behind bitcoin’s mysterious creation, has expressed excitement over what ethereum could offer. Recently, even Andreas Antonopoulos acknowledged that ethereum-based defi can be used to generate passive income.

6. Who are they marketing to? Noobs or savvy buyers?

Well, in reality, they aren’t really marketing to anyone. Although founder and frontman Vitalik Buterin has acknowledged that a lack of focus on marketing the base layer protocol was a mistake, I haven’t seen much to indicate that will change anytime soon. Perhaps Buterin is just waiting until they’ve officially rolled out ETH 2.0 to start redirecting funds to marketing

7. Who is on the team? Are they real, pseudonymous, or fake?

A. Founders

  • i. Vitalik Buterin – young gifted programmer and writer who co-founded Bitcoin Magazine before he went on to spearhead Ethereum
  • ii. Anthony Di lorio – financier
  • iii. Charles Hoskinson – left July 2014, co-founder ETH, co-founder IOHK, founder Cardano
  • iv. Mihai Alisie – co-founder of Bitcoin Magazine w Vitalik, VP Ethereum foundation until late 2015, founder of AKASHA.org
  • v. Amir Chetrit – was on the founding team but opted out of the AMA
  • vi. Joseph Lubin – entrepreneur & founder of consensus
  • vii. Gavin Wood – computer programmer, invented solidity, wrote the yellow paper, co- founded parity technologies & credited for coming up with the concept of web 3
  • viii. Jeffrey Wilke – Wilke is the creator of Ethereum. He started the first implementation of Ethereum using the Go programming language in 2013 and continues to lead Ethereum development today

B. EEA – has over 200 members and continues to grow, some EEA members include:

  • i. Blockchain Research Institute
  • ii. Hyperledger
  • iii. Banco Santander
  • iv. The Bank of New York Mellon
  • v. Cambridge Blockchain
  • vi. CipherTrace
  • vii. Dragonchain
  • viii. First National Bank of Omaha
  • ix. JP Morgan Chanse
  • x. Microsoft

8. Have the founders made claims that have since proven false?

YES! Vitalik has claimed ETH staking would take place at various different times, but has never been able to implement staking. There are a number of tasks that should have been completed on the roadmap which have been continually delayed

9. Do they have a functioning blockchain or token?

Yes! Ethereum is the second largest cryptocurrency by market cap and currently more bitcoin is stored as an ERC-20 on ethereum than there is on the lightning network. Multiple projects are built on top of ethereum and it is the top DeFi platform

10. Check Github repository for relevant activity

11. Look up the smart contract, see if it’s fair

12. Listen to your gut/instinct