Cryptocurrencies have taken the financial world by storm, with Bitcoin leading the way as the most popular and widely recognised digital currency.
As the popularity of cryptocurrencies has grown, many other digital currencies have emerged, and with them, concerns about scams and dodgy schemes.
One such cryptocurrency that has generated significant interest and scepticism is the Pi Network, often referred to as just “Pi.”
I have been a member of the Pi network since March 2022 and can confirm they do not ask you for money at any stage.
But is the cryptocurrency Pi a scam? What does it actually offer?
In this comprehensive analysis, we will explore the Pi Network, examining its origins, technology, community, and potential legitimacy.
Understanding the Pi Network
What is the Pi Network?
- Pi Network is a relatively new cryptocurrency that aims to create a more inclusive and accessible digital currency.
- Unlike traditional cryptocurrencies like Bitcoin, Pi Network does not rely on energy-intensive mining processes.
- Instead, it uses a mobile app to mine and distribute tokens.
- Pi is often promoted as a user-friendly and eco-conscious alternative to traditional cryptocurrencies.
- The project was initiated by a group of Stanford graduates, including Dr. Nicolas Kokkalis, Dr. Chengdiao Fan, and Vincent McPhillip, and it was introduced in March 2019.
- The Pi Network’s core idea is to provide an opportunity for individuals to mine and own cryptocurrency without the need for expensive mining hardware and energy consumption.
- Users are called “Pioneers“.
- An essential step is to download the Pi Browser App. This is installed to your device from the IOS App Store/Google Play Store.
- Here you create a digital wallet to store your Pi Coins.
- You also complete your identity verification here (KYC).
- The idea is that these Pi Coins can then be traded for goods and services on the Pi Network marketplace, although this is currently still being developed, and eventually (although this is also yet to happen) used as legitimate cryptocurrencies.
- Part of your Pi Coin balance can be locked up. This is an optional feature and enables you to earn at a higher rate, but these coins are then unavailable for use for a given time.
According to the current information from Pi, their ultimate vision is “To build the world’s most inclusive peer-to-peer ecosystem and online experience, fuelled by Pi, the worlds most widely used cryptocurrency.”
How Pi Mining Works
- Pi Network’s unique mining approach involves the use of a mobile app, available for both Android and iOS devices.
- Initially you will be invited to join the network by someone you know.
- They will send you a personalised link – this is the only way to join the network.
- If you want to take a look and claim 1 x Pi you can click this link: The Pi Network and use my username (suewilliams777) as your invitation code.
- Users are required to install the app and verify their identity using their phone number or Facebook account.
- The app then allows users to mine Pi tokens by simply pressing a button once a day.
- Unlike traditional cryptocurrencies, Pi mining does not require users to solve complex mathematical puzzles or invest in expensive mining equipment.
- The mining process is designed to be user-friendly, enabling individuals with smartphones to participate in cryptocurrency mining without any technical expertise.
- The mining rate depends on the number of individuals who are in a user’s security circle, which is essentially their network of referred users.
The App’s Gamification and Social Aspects
- Pi Network incorporates gamification and social elements to encourage user engagement and growth.
- Users can build their security circles by inviting friends and family to join the network, and their mining rate increases as their security circle expands.
- This referral system is a key feature of the Pi Network and contributes to its rapid user acquisition.
- Pi Network also plans to introduce additional features, apps and utilities for Pi tokens, such as a marketplace, which would allow users to spend their Pi on various goods and services.
- This is part of the project’s vision to create a fully functional digital currency ecosystem.
Legitimacy of the Pi Network
The Origin of Pi
One of the first aspects to consider when evaluating the legitimacy of any cryptocurrency project is its genesis.
- The Pi Network was founded by a team of Stanford graduates with backgrounds in computer science, and it was introduced openly and transparently to the public.
- The co-founders have provided information about their academic and professional backgrounds, adding an element of credibility to the project’s origins.
Technology and White Paper
- The Pi Network has published a white paper that outlines its vision, technology, and development roadmap.
- While the white paper provides a general understanding of the project, it’s important to note that it lacks the technical depth and specificity found in the whitepapers of more established cryptocurrencies.
- The Pi Network’s approach to mining, using a mobile app and a social referral system, is innovative but relatively unproven in the cryptocurrency space.
Theoretical Basis
- The Pi Network is built on a new consensus algorithm called the Stellar Consensus Protocol (SCP), which aims to provide a decentralised and secure network.
- However, the SCP is complex and largely unproven outside the Stellar ecosystem.
- The Pi Network’s application of the SCP is still largely theoretical and has not yet undergone extensive testing.
Lack of Mining Competition
- One of the key elements that has raised scepticism regarding the Pi Network is its lack of mining competition.
- In traditional cryptocurrency networks like Bitcoin and Ethereum, miners compete to solve complex mathematical puzzles, and the competition ensures the security and decentralization of the network.
- In contrast, the Pi Network’s mining process is considerably easier and lacks the competitive aspect found in more established cryptocurrencies.
Potential Red Flags
Several aspects of the Pi Network have raised red flags among some experts and cryptocurrency enthusiasts. These include:
- Lack of a clear path to decentralisation: The Pi Network has not provided a concrete plan for decentralising the network over time. A centralised structure can undermine the security and trustworthiness of a cryptocurrency and there have been concerns about the amount of control retained by the core team. At the time of writing there is a Version 1 Roadmap (see below) however there is no projected date for the open Mainnet phase.
- Unclear regulatory compliance: As the cryptocurrency space is increasingly subject to regulations, the Pi Network’s compliance with legal requirements in various jurisdictions remains a concern.
- You do need to verify your identity. While this in some ways confirms the legitimacy, some people may not like sharing their personal details. In order to complete KYC “Know Your Customer” users are required to upload photo ID such as a passport or driving licence, and then take a selfie while holding the ID up.
- Pi Coins are, at the time of writing, not available for trading outside of the Pi Network. This is because the system is still enclosed and not part of the open market or available on exchanges like Coinbase or Kraken. This Mainnet launch has no firm date.
- The Marketplace for goods and services is not yet up and running. Again there is no clear date for this.
The Pi Community
- One of the remarkable aspects of the Pi Network is its rapid growth and enthusiastic community.
- The referral-based system has driven significant user adoption, and many individuals have joined the network with the hope of gaining value from their mined Pi tokens in the future.
- The Pi Network’s user base is widespread, spanning across the globe.
Scepticism and Concerns
Despite its large and active community, the Pi Network has encountered scepticism and concerns.
- Cryptocurrency experts and enthusiasts have questioned the project’s feasibility, particularly the mobile app-based mining process and the lack of transparency in certain areas.
- Sceptics have raised concerns about whether Pi tokens will ever hold value or if the project is merely an attempt to build a large pyramid style user base for other purposes.
The Future of the Pi Network
Development Progress
The future of the Pi Network will depend on the project’s development progress and the ability of its team to deliver on their promises.
- The project has stated that it intends to create a marketplace where Pi tokens can be used, but this has not yet materialised.
- The introduction of such features and utilities will be a significant milestone in determining the legitimacy and value of Pi tokens.
- The recently published Version 1 Roadmap outlines the following three phases, with phase three being split into two parts. Currently Pi is at Phase 3 Part 1: Enclosed Mainnet.
Version 1 Roadmap
Phase 1: Beta
“In December 2018, Pi publicly listed the mobile app on the major app stores as an alpha prototype that onboarded the initial Pioneers. On Pi Day, March 14, 2019, the original Pi White paper was published, marking the official launch of Pi Network.”
Phase 2: Testnet
“This phase started on March 14, 2020, marking another critical preparation to the transition to a decentralised blockchain – a live Testnet with distributed Nodes from all over the world. Pi Testnet along with the accessible Node software not only enabled the testing of the blockchain but also initiated the decentralized building efforts by the community to create utilities using Test-Pi.”
Phase 3 Part 1: Enclosed Mainnet
“This period began in December 2021. The Enclosed Network period means that the Mainnet is live but with a firewall that prevent any unwanted external connectivity. Pioneers will be able to take time to KYC and migrate their Pi to the live Mainnet blockchain while the community builds apps and utilities on the Enclosed Mainnet for the network.”
Phase 3 Part 2: Open Mainnet
“The Open Network period will begin depending on the maturity of the Enclosed Network ecosystem and the progress of the network’s KYC. Open Network means that the firewall in the Enclosed Network period will be removed, allowing any external connectivity, e.g., to other networks, wallets, and and anyone who wants to connect to Pi Mainnet.”
Regulatory Environment
- The regulatory environment for cryptocurrencies is constantly evolving, and compliance with legal requirements is crucial for any cryptocurrency project’s survival.
- The Pi Network will need to navigate and adapt to changing regulations in various jurisdictions to ensure its continued operation.
Market Value
The true test of Pi’s legitimacy will be its market value.
- If Pi tokens gain real-world value and can be traded on reputable cryptocurrency exchanges, it will validate the project to a certain extent.
- However, the market value of a cryptocurrency is influenced by various factors, including adoption, technology, and investor sentiment.
Conclusion
Is the cryptocurrency Pi a scam? The answer is not definitively one way or the other.
The Pi Network presents a unique approach to cryptocurrency mining and has garnered a large and active user base.
- There is no fee to join, and the app and mining process is entirely free.
- The only thing your spend at the entry level is a small amount of time setting up the app and pressing the button daily.
- These factors are certainly positive, and the fact that it is in the formative stages may well encourage users to join now and enjoy the benefits later. I bet we all wish we had been in at the beginning of Bitcoin!
- If you want to take a look and get 1 x Pi Coin you can click this link: The Pi Network and use my username (suewilliams777) as your invitation code.
However, the project’s legitimacy and value are still uncertain and largely depend on its ability to deliver on its promises.
The Pi Network has raised concerns related to its technology, transparency, and potential centralisation.
The lack of competition in the mining process and the use of a mobile app-based system deviate from the norms of established cryptocurrencies like Bitcoin and Ethereum.
Furthermore, the lack of a clear path to decentralisation is a significant issue.
The future of the Pi Network remains uncertain and will be influenced by various factors, including its development progress, regulatory compliance, and market value.
Individuals considering involvement in the Pi Network should exercise caution, remain informed about its developments, and be aware of the risks associated with investing time and resources into a project with an unproven track record.
As with any investment, it’s crucial to do thorough research and exercise due diligence before participating in the Pi Network or any other cryptocurrency project.
Interested in other ways to make money online? Check our our article on Matched Betting.