How Ethereum Is A Scam
In a post shared on his X (formerly Twitter) platform, Bit Paine shared his perspective on Ethereum and other altcoins, illustrating “a brief history of the rise and fall of ethereum.” He referred to the Ethereum network as a “world computer,” which he labeled a scam.
According to Bit Paine, this “world computer” only succeeded, despite being a scam, because of “one very potent use case,” which is that it provided a platform for anyone to easily create and sell “digital penny stock” (which he also referred to as unregistered securities).
He further mentioned how this use case was appealing to Venture Capitalists (VCs) as it provided them an opportunity to make profits without regulatory scrutiny, particularly in relation to violation of securities laws, which would typically require these VCs to disclose their crypto accounts and ensure there were no fraudulent activities.
Bit Paine also accused crypto exchanges like Coinbase of benefiting from the “scam,” alleging that these “crypto casinos” seek to maximize their gains by listing as many coins as possible to increase trading volume and earn more fees.
Furthermore, Bit Paine accused crypto traders, bots, and influencers of engaging in hyping, pumping, and dumping these penny stock scams onto retail investors.
The accusations against Ethereum followed former ETH legal counsel Steven Nerayoff’s accusations against founders Vitalik Buterin and Joseph Lubin for carrying out a scam larger than what Sam Bankman-Fried did with the FTX crypto exchange.
The Only Legitimate Cryptocurrency
Bit Paine didn’t miss the opportunity to praise Bitcoin and suggested that the foremost cryptocurrency is the only one that embodies the ethos of decentralization. He stated that Bitcoin has only one ethical use case, which is that it is “fair, neutral, global, uncensorable digital money.”
He also claimed that Bitcoin aligns incentives for humanity, while suggesting that Ethereum “hyper-charged the broken incentives of fiat-finance” and evaded laws “that have made it less overtly a scam.”
His theory seems to be based on his belief that Bitcoin is the only cryptocurrency created with the purpose of serving humanity, unlike other tokens like Ether (and the ones created on the Ethereum network), which are primarily for financial gains. This could explain his statement that digital properties are not created “ethically equal.”
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