Pi Network (PI) Pi Network enables users to mine its (unreleased) cryptocurrency on their phones. According to Pi Network, this allows the community to build the “world’s most inclusive peer-to-peer marketplace, fueled by the world’s most widely used cryptocurrency.”
The network claims to offer a solution by allowing “everyday people to mine,” offering a solution to what it sees as the centralization of blockchains, inaccessibility of mining for retail users due to costs and the environmental impact of proof-of-work mining
Users can join the Pi Network but not without an invite by another user and a valid phone number. They can then “mine” PI on the network’s mobile app at the click of a button, although the accumulated balance does not reflect any real-world value.
Pi claims to have aggregated 33 million users (called "pioneers") on its app since the project’s inception in 2019.
On December 30, 2022, Huobi announced the listing of Pi, after Justin Sun, whose reportedly acquired Huobi in October 2022, ran a Twitter poll.
Since launching on Dec. 29, 2022, the token surged to a high of $318, although prices have now dropped to the $80 range. At the time of writing on Jan. 4, 2023, the 24H trading volume on Huobi is $24.4M.
However, the Pi Network warned against this token listing, as it was “without the consent, authority or involvement of Pi Network.” It further explains that Pi Network is currently in the ‘Enclosed Network’ stage, which does not allow trading of Pi on exchanges.
Users have reportedly claimed that Pi tokens could not be transferred from Pi Network wallets into the exchanges, and that the PI token’s real value is in cents, and not the price reflected on the exchanges. Pi Network has requested for the listings to be taken down, and is considering further actions.
CoinMarketCap has put up the following alert on our PI token page.
There have been reports questioning the legitimacy of Pi Network. Please note that mainnet has not launched yet and the price displayed below for certain exchanges reflect the value of the IOUs and it may not be transferable across exchanges. Read more here and DYOR.
How Does Pi Network Work?
Pi Network claims to utilize the Stellar Consensus Protocol (SCP) and its Federated Byzantine Agreement (FBA) algorithm for mining its (still unreleased) cryptocurrency. This is a legitimate consensus mechanism used by Stellar, a payments-focused project. Pi Network stresses the “green” aspect of this consensus mechanism and how SCP does not “have energy waste,” juxtaposing it with the oh-so-wasteful proof-of-work blockchains.
Pi applies several “adaptations” to the SCP, officially to enable mining by individuals. It introduces four roles to the network:
Pioneer: A user of the Pi mobile app that needs to log in daily and restart their “mining” process. The app functions as the project’s main hub and offers a chat function, access to the project’s info material, and referral codes to funnel new users to Pi.
Contributor: A user that verifies other users to “build a global trust graph.”
Ambassador: A user that has referred at least seven new users.
Node: A user who is a pioneer and a contributor using the Pi mobile app. They also run the Pi node software on their desktop or laptop computer.
Pi also promises utility and a two-phased governance model that is an improvement over existing models of governance by other blockchains. Its promised utility is called the Pi Stack which strings together a few pleasant-sounding buzzwords without any real insight into its execution.
For instance, Pi Network claims to “facilitate transactions between strangers that would not have otherwise been possible” with its “trust graph” but offers zero perspectives of how this will look like in practice.
Its “Attention Marketplace” is a rehashed version of obvious truths about the value of attention, with the promise that “in Pi’s attention marketplace, companies seeking to reach Pioneers will have to compensate their audience in Pi.” The same goes for its “Barter Marketplace” and “Decentralized App Store” that make vague promises without any realistic execution plan.
Pi’s two-phased governance model is a thinly-veiled version of centralized decision-making by the team that is supported by a “committee” proposing and soliciting suggestions past a user base of five million (currently 33M). Presumably, this committee can influence Pi’s three-part roadmap, which currently sees Pi in Phase 3 - mainnet launch. According to the official “Pi White Paper,” this is how the mainnet launch is decided on:
“When the community feels the software is ready for production, and it has been thoroughly tested on the testnet, the official mainnet of the Pi network will be launched.”
To launch the mainnet, users have to pass comprehensive KYC, which critics claim is contradictory to the core tenets of decentralization and permissionless usage of public blockchains.
Pi Network Features and Controversies
The Pi Network white paper and website are currently offline. An analysis of the white paper finds many typos and spelling mistakes, with no specific plans for executing on many of its promises or explaining the network's real-world utility.
The Pi Network team is run by a team of Stanford alumni, as reported.
Pi Network Mobile App
Pi’s mobile app does not currently offer any utility besides mining the unreleased PI coin. Furthermore, users have to sign up with a phone number and can use an invitation code from another user.
There are several allegations of Pi Network being a scam on public forums like Quora and Medium.
No Pi Coin After Three Years
Pi recently released an article on its official Medium blog, detailing a process of how users will have to go through KYC to receive their mined coins. In short, PI will have a total supply of 100 billion, 20% of which will be reserved for the team. Following this announcement, some Pi miners on Pi Reddit were not amused:
[...]” have little lest then 10k, just me and few friends ‘mine’ and after finding out that supply is 100bn, feel like shit, because when we hit the market, my 2year mining will be able to buy for few dollars…”
Although most of the Pi Network community is based in developing countries, the massive token supply could render user balances virtually worthless depending on the final tokenomics.
Pi Network does not currently cost money and only requires the user’s attention. Its supporters argue that Pi Network is just “taking its time” and costs nothing, and scam allegations are just FUD.
However, Pi Network collects private data through its KYC process for the token launch that will presumably happen at some point. Furthermore, it has already collected the phone numbers of all the users signed up for the network.
The official launch date of Pi Network is unknown.
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