What is the Pi network and is it safe?
(Last Updated On: 17. January 2023)
The Pi Network (PI) had caught the attention of crypto enthusiasts before the coin was even available for trading. Some users see it as a way to get involved in a cryptocurrency from scratch and profit in the future, just as some of the early Bitcoin (BTC) entrants have made profits from mining and holding the coin. Others, on the other hand, have compared Pi-Crypto to a Multi Level Marketing (MLM) scam that has no value. But what is the Pi network and how does it work? Have you heard about this new cryptocurrency and are wondering whether the PI coin is worth as a potential investment? This article provides an overview of what the Pi Network (PI) aims to achieve and what the Pi coin price prediction looks like. Also, we will delve into the question “Is Pi network a scam”.
What is the Pi Network and what is the main idea of it?
So what is the Pi network? It’s a digital currency project that aims to make cryptocurrency mining accessible, as the centralization of first-generation currencies like Bitcoin has made them unattainable for normal users. The Pi Network, developed by a team of Stanford grads, allows users to mine coins with a mobile app, the PI Mining App, by validating transactions on a distributed data set. In other words, the Pi network allows you to mine PI coins on your mobile device without draining your device’s battery.
But what is the idea behind the Pi network? Well, the main idea of this project is to establish a marketplace like Amazon. Within this market, people would offer products and services which would be paid with the PI coin.
The idea of a market where you can buy a product or a service (or sell it) and pay it only with a cryptocurrency is not new and it reminds me of the cryptocurrency Electroneum and its ETN project. That’s the long story short. But now, let’s continue with some details.
Unlike nodes on networks like Bitcoin, which use Proof-of-Work (PoW) protocols, Pi-nodes use an algorithm based on the Stellar Consensus Protocol (SCP). Pi Nodes validate transactions on a distributed ledger and reach consensus on the order of new transactions that the ledger records.
In the context of SCP, the PI nodes form security circles or groups of three to five trusted individuals known to every user of the network. Security circles form a global network of trust that prevents fraudulent transactions since transactions can only be validated in the common ledger if the trusted nodes approve them.
Phase 1 of the project, which branding is based on the number π, started in 2019 on Pi Day, March 14, with a free Pi mining app. As of June 2019, the Pi Network had more than 100,000 active users. A year later, when phase 2 started, there were more than 3.5 million users. In May 2020, the app began advertising to create a funding source for the project. On September 24, 2021, the number of users had increased to 25 million, compared to 14 million in March 2021.
The Pi Coin, or PI, is the cryptocurrency that runs on the Pi network and like other cryptocurrencies e.g. B. Bitcoin, it was designed to be halved regularly to protect its scarcity. Halving means that the number of coins a miner receives for processing new transactions is reduced by half. This usually happens when a certain milestone is reached. PI’s mining rate halved from 1.6π per hour when it reached 100,000 users, halved again to 0.4π per hour when it reached 1 million and halved again to 0.2π when it reached 10 million. This halving will continue and reach zero at 1 billion users.
In the second phase of the project, users can voluntarily test the Pi Node desktop software on their computer. The Pi Wallet and Pi Browser were released for testing on April 1, 2021. And on June 28, a developer portal, software development kit (SDK) and other resources were released. The third phase was launched in December 2021.
Check this promo video of the project makers, folks:
Who invented the Pi Network and what makes it unique?
The Pi Network was founded by two PhD’s in computational engineering and social sciences from Stanford: Dr. Nicolas Kokkalis and Dr. Chengdiao Fan.
Both are believers of the technical, financial and social potential of cryptocurrencies. But they see the actual problems and are frustrated by their limitations. To resolve traditional blockchains’ shortcomings, they have a user-centric design philosophy that turns the development process of new blockchains upside down.
So what makes the Pi network unique? As mentioned, Pi’s blockchain uses an adaptation of the Stellar blockchain to validate transactions. Compared to traditional blockchain mining methods like proof of work or stake, the Pi Network uniquely provides decentralized control, low latency, flexible trust and asymptotic security at a fraction of the environmental cost.
Long story short, fault tolerance is achieved through a decentralized trust network of mobile device users who validate their daily presence and vouch for others’ authenticity in the network to earn PI. Environmental impact is vastly lowered since this method does not require energy-intensive hardware to mine.
How To Buy Pi Coins?
To buy PI coins, this cryptocurrency must be listed on a cryptocurrency exchange. As long the phase 3 (moving to a decentralized blockchain) was not accomplished, you could only obtain PI coins by mining them with your mobile device. Furthermore, you needed an invitation from an existing user to “activate” your account for the mining process.
The mainnet has been launched in December 2021, which marked the point at which an exchange could list the coin: “Pi will be tradable in phase 3 of the project (i.e. mainnet). At that point, exchanges can decide to list Pi,” said Network Pi.
But in 2023, there is still no cryptocurrency exchange which was willing to list the PI coins. Therefore, at this point you still can only obtain PI coins by mining them on your own.
To do this, download the Pi mining app and then enter my username when you will be asked which is domaxi198
PI remains in pre-release mode
Users who have mined the Pi cryptocurrency are still not be able to withdraw or exchange their coins until the 3rd phase of the project, when it will transition to a decentralized blockchain.
With the launch of Phase 3, holders can take full control of their private and public wallet keys and use the coin to purchase products and services on Pi’s peer-to-peer marketplace. But the problem is that in 2023, there is still no marketplace available. On the Pi’s marketplace website, you can read that the market place will be available as soon as there would be at least business sellers.
Until this happens: The PI mining app acts as a crypto wallet linked to the user’s mobile number or Facebook account. As with other public blockchains, the Pi blockchain will allow external wallets to hold Pi coins and transmit transactions directly to the blockchain.
However, unlike other blockchains, the developers have not yet released the source code which fuels the reproaches the Pi network is just a scam which is skimming user data and showing ads.
Nevertheless, early adopters are accumulating Pi coins in anticipation that the price will surge after Phase 3 launches and a marketplace would be established. Although the mining rate has been reduced by half, users can increase their mining rate by connecting with other active miners.
The project’s developers claim that the Pi Network’s security is enhanced by personal networks that encourage users to invite friends and family – raising skepticism that it could be a multi-level marketing or Ponzi scheme.
In November 2021, the organization began releasing technical and product updates to provide an overview of the work being done behind the scenes over the previous month. The October Bulletin states that the “Core Team has spent significant time introducing new and updated product features to the Pi Ecosystem.”
These included the KYC (Know Your Customer) App Pilot and Block Explorer. After being tested by community moderators, the KYC app pilot was implemented “on a limited scale” to begin the process of pioneer verification and improve the app’s usability and machine automation.
The Pi Block Explorer, which allows users to view transaction history and identify transaction details such as sender, recipient and amount, has also been launched. It also updated the Pi Wallet, in which the company created push notifications to alert Pioneers when they receive a payment on the blockchain and fixed a bug for Android users who couldn’t see their wallet passphrase.
The Pi Network team added that the Brainstorm app is now a redesigned app with hackathon winners, a streamlined user interface, improved tag functionality that allows users to create custom tags for their projects, and a feature that lets projects Upload logos to their Brainstorm site. Some crypto watchers have now started forecasting the Pi Network price. Now let’s take a look at the latest Pi Network price prediction.
What is Pi network worth? A prediction
So what is Pi network worth? Well, as with other digital coins at launch, the value of the PI cryptocurrency is likely to start at relatively low levels against the US dollar and rise as usage increases. What do price forecasters suggest? What is the Pi cryptocurrency value prediction?
Both cryptocurrency data provider CoinMarketCap and algorithm-based forecasting site Wallet Investor are giving a Pi cryptocurrency prediction of a current value of $0.007077 for the Pi Coin.
Depending on the number of cryptocurrency users and exchanges that embrace PI, the bull case could start the coin price at $0.16 and hit $1 a year later, according to crypto exchange Changelly. Longer term, the price could climb to $5 in five years. But of course, it’s just a forecast which you should keep in mind.
It’s important to remember that cryptocurrency markets remain volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even more difficult to make long-term estimates. Therefore, analysts usually do get wrong with their forecasts. That’s why I encourage you always to do your own research and to check the latest market trends, news, technical and fundamental analysis before making any decision.
Is Pi network a scam?
There is really a lot of conversational discussing on the net dealing with the question “Is Pi network a scam”. My personal perception is that there are two camps and no majoritarian opinion about the Pi network. So what speaks in favor for the question “Is Pi network a scam”?. Well, a lot of people claiming that the Pi Network is a scam because
- The app does not provide any utility. Most users hold on to it just with the hope that they will sometime convert their PI coins to FIAT money
- At first blush, the app seems to work like a direct selling or affiliate marketing system, promising higher rewards to users for bringing in new users. Some people find this concept similar to Multi Level Marketing
- Furthermore, they are claiming that the Pi Network is a scam because the app seems to collect user’s data and also requires to get access to contacts stored on your phone. Also, it seems to share the data with advertising platforms.
- Next reproach: Founders are already profiting from the app because they launched optional video ads to monetize the active user base. The app also has a KYC process to have a verified audience which would increase advertising revenues.
These were just some of many assertions I found on the internet. But there were also contrary arguments speaking against the scam allegations:
- The whole Pi network concept was founded by two PhDs from Stanford. I cannot believe that these two persons are really risking their personal future by launching a scam project. And I cannot believe that the Stanford University would jeopardise its own reputation as a prestigious institution by allowing such campaign if it was a scam.
- Another counter-argument for that the app does not provide any utility I found on the internet is: because of a different approach and a unique concept, it just takes its time to develop the project to a stage where the app would have any utility.
- Next: the app seems to be similar to a Multi Level Marketing system. Counter-argument from the pro camp: you can only earn PI coins from your own direct network (3 – 5 users) and NOT from the whole network which would include all the other users. Therefore, this seems to conflict with the usual MLM system or a pyramid scheme.
- Next one: the Pi Network app collects user data. Counter-argument: there are millions of legit apps (even from Facebook, Amazon, Google & Co.) collecting user data every day and selling them do ad companies. And in the roadmap of the Pi project there was also a publication where the creators said that they use ads to finance the project
- The founders are already profiting from the app because they launched optional video ads. Counter-argument: who says that the founders are profiting? Do you have evidence in black and white?
My personal opinion about the question “Is Pi network a scam”
Of course, I cannot reassure that the PI project is not a scam. But the very fact that the founders are PhDs working at the Stanford University is letting me to say that the Pi network is probably not a scam.
For me, it’s just another cryptocurrency project which is different from usual approaches, like the IOTA project. And yes, at this moment you can just mine PI Coins and they have no worth and it’s not said that they will have a worth in the near future at all. An no, it’s not a cryptocurrency project where you can get “rich over night” as you have seen in the section “What is Pi network worth”. Also, it’s not said that the Pi project will ever succeed.
So, is Pi network a scam? Maybe. But maybe not. I tend to say it’s not a scam, but that’s just my personal humble opinion. To be more objective: At this stage, even with millions of users of the Pi network, there is a 50% / 50% chance, like every other young cryptocurrency project, e.g. like Elongate. So the only thing we can do is to lean back and to wait and see what happens.
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