TLDR: Ethereum is a computing platform running on computers all over the world. Ethereum network using a language named Solidity. People can ask these computers to run programs that can’t easily be shut down because all the computers create a token ethereum the code with each other.
If you want to run a program that takes a long time to finish, you have to pay the computers in the network a currency called Ether. An unregulated, global financial market with a multimillion USD market cap, yes please! Why would you want to create a scam using Ethereum? Well, because it’s a financial wild west: unregulated, unsafe, and large enough you can hide in plain sight. Ponzi Schemes So, first-off let’s talk about ponzi schemes.
Ethereum executes smart contracts that allow you to strictly enforce the execution of a ponzi scheme with no oversight after people start buying in. The code will continue executing indefinitely. Some researchers from Cornell University did extensive research to discover, classify, and analyze ponzi schemes running on the the Ethereum platform. Still, it is foreseeable that, as Ethereum consolidates its position as a platform for smart contracts and as a cryptocurrency, criminals will exploit it to host their scams. Besides the growth of traditional Ponzi schemes accepting ether, we expect a second wave of Ponzi schemes, but very likely they will be less recognizable as such than the ones collected in this survey. Our analysis suggests that there is still time to devise suitable policy interventions, and provides a first understanding of the issues that must be tackled in this direction. Truthfully stating what the company intends to accomplish.
Being held accountable for producing results. Not overhyping their ICO using tactics like “IPCO windows” where the ICO launches at a specific date and ends at a fixed time. Essentially, many regulations that exist in established financial markets were created for a reason. Not having some of these regulations leads to unsafe investments.
Know of some scammy behavior I didn’t list here? Ethereum is kinda nerdy But that’s ok, so is the internet. It’s not hard to understand though, so don’t be scared by all of the jargon! Here are a few keywords to get started. Decentralized – computers located all over the world, working together, if half of the computers are turned off, the other half will continue operating as if nothing happened. Cryptocurrency – a kind of digital money that gets its value from having computers do hard math problems.
Computing Platform – this is a fancy way of saying a network of computers that run programs together. So now we’re going to put all those terms together to try and explain what Ethereum is. Ethereum is a decentralized computing platform that executes programs anyone can create. In order to pay for the computing power used to execute these programs you pay with a cryptocurrency called Ether. So what, why do people care about Ethereum so much?
Speculative investing – because you can buy Ether at places called exchanges and more and more people are buying Ether, less of it is available and so the price is rising. However, like buying stocks in the stock market where companies can have ups and downs, Ethereum could experience this too, and the Ether people buy could lose value very rapidly. Technological excitement – many people are excited about Ethereum because, much in the same way that the internet changed how everyone communicates, Ethereum has the potential to change how much of the world exchanges money, and organizes around trust. Ok, so should I do anything about it? Ethereum is too new a technology to worry about.