Pi Network has successfully cultivated an expansive user base of over 33 million people. However, despite its popularity, Pi Network has yet to launch a functioning blockchain or establish a market value for its PI coins. This guide delves into the workings of Pi Network and evaluates its potential benefits.
What Sets Pi Network Apart?
Pi Network presents a unique blend of digital currency, a mobile application, and elements reminiscent of a multi-level marketing (MLM) strategy.
The central attraction of Pi is its mobile mining capability. Unlike other cryptocurrencies, such as Bitcoin, which require substantial processing power and specialized mining equipment, Pi can be mined simply using the Pi Network app on a smartphone. However, the "mining" process in Pi Network is quite different from traditional crypto mining; it involves tapping a button on the app every 24 hours rather than performing transaction verifications. Essentially, users earn PI coin vouchers for daily app engagement and verification of their human identity.
Pi Network employs a referral system where users earn additional coins by inviting others to join using their specific invitation code.
At present, the Pi you accumulate is confined within the app; it cannot be withdrawn, sold, or exchanged for other cryptocurrencies. According to Pi Network's roadmap, these functionalities may become available in its third phase with the launch of the mainnet, although no specific launch date has been announced.
The Origins of Pi Network
Pi Network was founded by Nicolas Kokkalis and Chengdiao Fan, researchers from Stanford University, with the vision of creating a digital currency accessible to the average person. They initiated the project in 2018 and launched the Pi Network app and a white paper on March 14, 2019, coinciding with Pi Day. Kokkalis and Fan remain at the helm of the project, leading the development and product strategy.
How Does Pi Network Function?
The Pi Network app is user-friendly, featuring a lightning button for mining Pi. Users tap this button to start a 24-hour mining session, and must repeat the action daily to maintain their mining activity. The app doesn't need to remain open during this period.
Your mining rate depends on the timing of your membership, with earlier members mining at a higher rate. Increasing your mining rate is possible through inviting new users or forming a security circle.
Pi Network offers four user roles:
- 1. Pioneer: Mines Pi by tapping the lightning button.
- 2. Contributor: Adds trusted users to a security circle, earning extra PI per hour.
- 3. Ambassador: Invites new users and earns a mining bonus for each referral.
- 4. Node: Participates in the Pi node software testing phase.
Users can assume multiple roles, enhancing their mining capabilities.
Pi Network's white paper indicates that its development is based on the Stellar Consensus Protocol, which is also used by Stellar (XLM). This choice was made to facilitate user-friendly, mobile mining.
Partnerships and Community Initiatives
Currently, Pi Network does not boast significant partnerships. However, it has hosted a Pi Hackathon to stimulate the development of Pi-related applications and an ecosystem. Winners and notable entries received funding in U.S. dollars and PI coins.
The first Pi Hackathon's winning business app was Pi Workforce Pool, a job marketplace for Pioneers. The top ecosystem app was PiCare, a bug-reporting tool for Pi applications.
Potential Risks of Pi Network
The primary risk associated with Pi Network is the investment of time rather than finances, as the app is free. The crucial consideration is whether the time spent mining Pi is worthwhile. For some, the prospect of potentially valuable PI coins in the future justifies the minimal effort. However, skepticism remains due to the project's prolonged development phase and the current lack of value for its cryptocurrency. There are concerns about the possibility of Pi Network being a prolonged social experiment.
Moreover, it's important to note that the Pi Network app can collect and potentially sell user data, including personal and app usage information. The Pi Network also mandates "Know Your Customer" (KYC) information for future transactions, which might deter those cautious about data privacy.
How to Acquire Pi
Pi is not available for purchase or sale and is not listed on cryptocurrency exchanges. The sole method of obtaining Pi is through the Pi Network app. Here's how to start:
- 1. Download the Pi Network app on your smartphone.
- 2. Create an account with a username, password, and contact information.
- 3. Use an invitation code to register.
- 4. Tap the lightning button to begin mining.
- 5. Visit the app daily to continue mining.
While accumulating Pi is straightforward, its future value and utility remain uncertain. If you're considering incorporating cryptocurrency into your investment portfolio, exploring established options like Bitcoin or Ethereum may be more prudent.