What is Pi Network?
Launched in 2018 by Nicolas Kokkalis and Chengdiao Fan, Pi crypto was invented as an effort to simplify the accessibility of cryptocurrency and introduce more people to cryptocurrency through a simple crypto mining and management system.
The most attractive feature of Pi cryptocurrency at launch is its mobile mining feature. Using the Pi mobile app, users can mine Pi coins on their mobile devices. Participation in the mining program was by invitation only.
The Pi mobile app can be installed on Android and iOS devices. After installing and setting up the app, users can mine Pi Coins on their devices with a single click. Members of the Pi network are commonly known as Pioneers. Since its launch, Pi Network has gained a huge following on social media and has seen incredible growth in participation with a reported 33 million members as of 2022.
Network participants can play a number of roles, including running a node on their personal computers, referring new members, or mining Pi coins on their mobile devices. These roles are rewarded with Pi coins.
How Pi networking works
For the Beta stage of the project, the mobile application simulates the mining system that will be properly launched when the mainnet is fully functional. The mobile application users participate in block validation and receive rewards in Pi cryptocurrency.
When active, miners on the mobile app connect to one or more nodes. When connected, mobile miners ask if the transaction has been recorded on the ledger. They also get the most recent block number and the hash value of that block.
Rewards for mining the block are distributed to the node owners and the mobile miners.
Pi Network runs the Stellar Consensus Protocol (SCP). SCP was developed by David Mazières, chief scientist at Stellar Development Foundation for the Stellar blockchain. It uses a new mechanism called Federated Byzantine Agreements to ensure that updates to a distributed ledger are accurate and reliable.
The SCP protocol uses a real voting system. Nodes on the network vote on the validity of a block and the next block to be mined. A block is only mined when a majority of the nodes agree that it should be mined next and also confirm its validity. The nodes participating in this consensus are elected by the creator of the system. The SCP is energy friendly, but is criticized for being centralized.
Tokenomics and reward system
Pi coin is the native token of the Pi network. Users on the Pi network earn Pi coins through mining. Holders can use their Pi Coins to pay transaction fees and also perform transactions on applications and marketplaces built in the Pi ecosystem. Pi coin supply system is driven by activities on the network and distributed exclusively as user rewards.
There was no official pre-mining, but users who participated in the beta mining program could transfer their tokens to the mainnet. Unlike many other cryptocurrencies, it does not have a fixed total supply.
Each user who joins the Pi network (by creating a Pi account) and is allocated a predetermined number of Pi coins. This allocated amount is tapped over time. That is, the user can only mine this allocated number of tokens during their lifetime. This award is only made to the first 100 million users on the Pi network. A reward system also exists for users who refer new members to the Pi cryptocurrency project.
The Pi coin mining protocol makes an extra Pi coin for every coin mined for a member or referral reward. This extra coin is reserved to compensate developers on the network. The total Pi coin supply is a sum of the member, referral and developer reward.
Pi Network operates a ‘Semi-DAO’ governance model. Contrary to the commonly known decentralized management system, Pi network adopts a management system that keeps a central team in charge while the community forms a strong force that contributes to the project’s decision-making. The management model system is different; a two-phase plan that depends on the number of active network users.
If the number of active users on the Pi network is less than five million, the team directly solicits input from the general community on suggestions. Through the project’s forum built on the mobile mining app and other engagement media, the project team opens conversations with the community. Input from the rest of the community is considered before the final decision is made. The team finally decides the next course of action. As the community grows and exceeds five million active participants, the second phase of the management system is employed. The team assembles a committee made up of well-known contributors from the community. The Committee is in charge of developing proposals and organizing community contributions. The Pi network forum is still open for contributions from the community. The committee continues to make a final decision using contributions from the community members.
Testnet and Mainnet System
Pi network was launched as a research project and already operated its Beta phase in 2018. The Testnet was introduced about two years later and allowed developers on the Pi network to test certain features before they were finally deployed on the mainnet.
After much anticipation, Pi Network launched its mainnet in the last quarter of 2021. The mainnet provides a platform for pioneers to create a proper wallet and transfer their mined Pi cryptocurrency to their wallet and perform peer-to-peer transactions.
The mainnet migration includes a KYC verification process and a list of tasks that qualify users to own and operate a proper wallet.
Watch this video tutorial to learn how to create a Mainnet wallet and transfer your Pi coins.
Is Pi Network a Scam?
If you have picked up the slightest interest in Pi cryptocurrency, there is a greater chance that this interest will be crushed by statements about the value of Pi coins and the credibility of the project.
Pi crypto applications require no extra installation costs and are quite easy to run, yet the ‘Scam’ statements were very popular; they still are. This is mainly due to the delay on the mainnet and the listing of the Pi cryptocurrency on exchanges.
Thanks to users’ inability to move their mined Pi coins and the general sentiment about mobile mining, Pi Network was formed a ‘high-level’ marketing scheme and predicted to eventually end up as a scam. The continuous growth of the Pi network community and the delay in making the mined cryptocurrencies further reinforced these statements.
With recent developments, the Pi crypto team proves otherwise. With the launch of the mainnet, it now allows users to spend their Pi cryptocurrency and several markets are rumored to accept payments in Pi coins.
PCM does not participate in prizes. We also do not interfere with sellers’ prices. However, we will keep a close eye on the trade. Fraudulent behavior will be punished. You can view the relevant content in the Pi Chain Mall User Agreement. pic.twitter.com/kge0yfLqN1
— PiChain International (@pichainmall) August 25, 2022
The PiChain International is reportedly being developed to allow merchants to create stores and accept payment in Pi coins. Social media updates indicate that the marketplace is in active development and nearing its initial release.
Nevertheless, mandatory KYC is still a topic of popular discussion, and the project has been accused of complete centralization.
What is the value of Pi Network?
As of this writing, Pi cryptocurrency has not yet been listed on any crypto exchange (Separate the original Pi cryptocurrency from the other fake Pi tokens minted on other blockchains). However, there were reports of trading activity among peers. With the mined coins now transferable, several analysts have offered predictions for the value of Pi coins.
The Pi network community has also made various predictions and quotes for the Pi cryptocurrency. Digital Coin Price predicts that Pi coin will trade at around $0.007 by the end of 2022. The Pi community quotes even higher values for the Pi coins.
This is pure speculation, and the real value of Pi Network will only develop after stock exchange listing and resumption of trading activity. The actual value may differ significantly from these estimates. Investors should attempt to do their own research while working with these speculations.
The big question remains about the authenticity of Pi cryptocurrency and whether it will be valuable. Despite the credible technological developments and the large community the project has managed to build over the past four years, its reputation is still in doubt.
Considering the rigorous computational protocols involved in cryptocurrency mining, Pi Network offers an incredibly easy way to earn cryptocurrency and has seen a positive reception from enthusiasts who are keen on the idea of cryptocurrency mining. to earn with minimal effort.
Skeptical of the legitimacy of this process and the value of Pi Network, a majority of the cryptocurrency community still doubts the intentions of the project. Even with the launch of the mainnet and some serious development and adoption going on in the Pi community, these sentiments haven’t changed too much.
Aside from proposed listing on exchanges, the Pi crypto community is developing media to use the Pi coin in direct commodity purchases and other peer-to-peer exchange facilities. However, just like every other cryptocurrency business, investors are advised to exercise caution. Cryptocurrencies are still high-risk investments and Pi coin is no exception.
Joel loves to discuss cryptocurrency and blockchain technology. He is the founder of CryptocurrencyScripts. Follow the author on Twitter @agboifesinachi