I was recently asked this 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.