I was recently asked this question on Twitter:
While Ethereum isn't an obvious scam in the traditional sense, it does have many disreputable characteristics that have led many to accuse it of being a scam, and avoid it.
The first reason for this is Ethereum's premine at its genesis, in which approximately 70% of what was then planned to be the total supply was given to the developers and initial insiders on the project.
Contrast this with Bitcoin's genesis, in which Satoshi Nakamoto did the same work that anyone else would have to do, in order to find a block and earn new bitcoin. He even embedded that morning's newspaper headline, "Chancellor on brink of second bailout for banks", as proof that the first block had not been mined previously.
Ethereum's monetary policy, including its total supply and issuance schedule, changes frequently. It has no supply cap, and more coins have continued to be issued beyond its original promised limit of 100 million. This contrasts sharply with Bitcoin's predictable and unchanged monetary policy of halvings every 210,000 blocks, leading to a total supply of just under 21 million.
While Ethereum claims to be decentralized, experience has shown it to actually be very centralized, like the banking system. For example, in 2016, a vulnerability in its code was exploited, leading to 3.6 million Ether being stolen, which was worth about $50 million at the time. To fix the exploit, Ethereum's central authorities rolled back the blockchain to undo the theft, and all legitimate transactions that had taken place since along with it.
Then, in 2022, Ethereum merged from being a Proof of Work (PoW) system, in which new coins are issued and transaction fees are taken based on real-world work, to Proof of Stake (PoS), in which new coins are issued and transaction fees are taken based on the amount of coins one has staked as collateral in order to validate blocks. PoS is an unavoidably centralizing force, leading many to conclude that Ethereum is a scam.
Ethereum's premine, ever-changing monetary policy, unlimited supply, false claims to decentralization, and switch from PoW to PoS make it apparent that Ethereum exists to move money from the hands of the poor, and into the hands of the wealthy. This is further demonstrated by the myriad of DeFi projects built on top of Ethereum, which are known to enrich insiders at the expense of new entrants.
In conclusion, the truth of whether or not Ethereum is a scam largely rests on the intentions of Vitalik Buterin and his associates, which is beyond my ability to determine. However, its history, policies, lack of hard-capped supply, centralized control, Proof of Stake algorithm, and platform for thousands of morally-questionable projects have caused many newcomers to lose their money to those in charge of Ethereum and the projects built on it. As this differs drastically from Bitcoin's history of verifiability, predictability, immutability, decentralization, and Proof of Work, many see Ethereum as a scam, and choose to use #Bitcoin instead.
FAQs
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While Ethereum isn't an obvious scam in the traditional sense, it does have many disreputable characteristics that have led many to accuse it of being a scam, and avoid it.
Is Ethereum really worth anything? ›
Experts acknowledge that due to several use cases and its unique blockchain, Ethereum has a stable future, and there is a chance it may perform exceptionally well compared to Bitcoin. However, it is considered highly unlikely for Ethereum to surpass the price of Bitcoin.
Is it worth putting $100 in Ethereum? ›
The short term can be rocky for crypto, and if you'd invested in late 2021 right before prices plummeted, your investment would have declined in value. But if you'd invested just four years ago and held through all the ups and downs, you'd have nearly 8 times your initial investment by today.
Can Ethereum still make you rich? ›
Key Points. Investors need to focus on Ethereum's growth potential, not past results. Ethereum is facing a much more competitive landscape than it did a decade ago. For Ethereum to make you a millionaire, it would need to increase 1,000-fold in value, which is highly unlikely.
Is it risky to invest in Ethereum? ›
Bitcoin and Ethereum Performance
Both Bitcoin and Ether have been exceptional long-term investments, but both are prone to extreme price volatility. Buying either crypto requires a high risk tolerance.
Can I lose money on ETH? ›
The value of Ethereum can fluctuate significantly. Be prepared for potential price swings and only invest what you can afford to lose. Consider Ethereum as a long-term investment. Don't expect overnight profits (although they can happen).
Should I keep money in ETH? ›
As currently one of the leading cryptocurrencies with robust blockchain technology and wide adoption, many investors believe in its potential for significant long-term growth. However, as always, potential investors should carefully consider the inherent risks and volatility of cryptocurrency investments.
How much will 1 Ethereum be worth in 2025? ›
Ethereum (ETH) Price Prediction 2024-2040
| Year | Minimum Price | Maximum Price |
|---|
| 2024 | $4,215.58 | $4,773.52 |
| 2025 | $5,907.41 | $7,194.28 |
| 2026 | $8,232.18 | $10,283.97 |
| 2027 | $11,892.81 | $14,527.55 |
8 more rowsIf this pattern continues into 2030, the price could peak around 2029 or 2030, potentially aligning with Wood's price prediction. If Wood is correct and Bitcoin reaches $3.8 million, a $100 investment in Bitcoin today would be worth $5,510 in 2030. This translates to a compounded annual growth rate (CAGR) of over 95%.
What if you invested $1,000 in Ethereum? ›
That marks a roughly 10,000% increase in value. If you had invested $1,000 at $0.31 per coin, you'd have owned 3,225.81 ETH coins. At today's pricing, that would be worth $10,183,871. Today's pricing doesn't even represent Ether's peak.
Crypto markets aren't ready for such a stretched valuation. Ethereum's chart doesn't support moving to $100k in the coming years. While ETH to $100,000 might happen at a certain point in time, it won't happen before 2030, is what we confidently can say. Here is a path to $10,000 though.
How much Ethereum should I buy to be a millionaire? ›
To have a million dollars worth of Ethereum at $3000, you would need around 333.33 ETH tokens. The cost of 333.33 ETH at current prices is about $747,333. However, if ETH reaches its all-time high of $4878.26, the same investment would be worth around $1,626,000 ($1.62 million).
Should I buy Bitcoin or Ethereum? ›
Key Points. If two of the catalysts expected to push Bitcoin higher this year fail to materialize, Ethereum could outperform Bitcoin. Anticipation of a new spot Bitcoin ETF pushed Bitcoin higher in 2023, but it is uncertain how much of an impact it will have in 2024.
Will Ethereum reach $3,000 again? ›
That being said, it is a 100% return from current levels and, therefore, will be a difficult target to hit. The Digital Coin Price Ethereum forecast calls for the market to be relatively flat through most of 2023 but does have an Ethereum Price Prediction of higher levels in 2024, breaking the $3000 level.
Are there Ethereum millionaires? ›
Both Bitcoin and Ethereum have created millionaires, but it's not a guaranteed ticket to wealth.
Is Ethereum a real thing? ›
Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network that securely executes and verifies application code, called smart contracts. Smart contracts allow participants to transact with each other without a trusted central authority.
Can Ethereum become real money? ›
Absolutely! The most common way to cash out Ethereum is by using a crypto exchange. A cryptocurrency exchange is exactly that – you can exchange one currency for another. Cashing out Ethereum is when you exchange your cryptocurrency for fiat currency (usually Dollars or Euros).
Are Ethereum events legitimate? ›
Cryptocurrency website eth-event.co appears to be engaged in fraud against California consumers | The Department of Financial Protection and Innovation.
Should I buy an ETH coin? ›
Ether, like Bitcoin, is a volatile asset that could easily lose half its value before it doubles again. Therefore, investors shouldn't use any cash they need over the next five to 10 years to buy Ether.
