Altcoin Spotlight: The Pi Network (PI)
Here at Mintdice.com, we care about your education when it comes to cryptocurrency projects that aren’t Bitcoin. We track the top 50 tokens on coinmarketcap.com, ensuring we prepare profiles for any token that manages to break into these high ranks.
This week, we were surprised to find that PI has managed to snag the 17th place. This relatively new project only recently came on the scene, quickly taking the crypto world by storm. Keep reading to learn everything you need to know about PI, as well as whether or not you should consider an investment.
What is Pi Network?
Pi Network was created as a platform to allow individuals to mine cryptocurrency from their phone using an app. The network uses KYC to ensure that only humans are mining cryptocurrency and is easy to use—meaning those who can’t mine Bitcoin due to their lack of technical knowledge can still mine Pi.
Like in all cryptocurrency mining, users are rewarded for their participation in the mining process with a small amount of cryptocurrency. In this case, the reward is PI, the native token of the Pi Network.
How Does Pi Work?
The Pi Network is built on the Stella Consensus Protocol. This protocol uses far less energy than Proof of Work consensus mechanism (which is used by Bitcoin) and thus makes it “light” enough to be mined on mobile devices.
Users of the Pi Network start out by building trust circles with other users and then nominate 3-5 contracts they believe to be reliable. This creates a web of verified members who can validate transactions without needing massive computing power.
Users are rewarded differently during the mining process based on their position in the trust circle. Pioneers, aka those who started trust circles, receive rewards for daily check ins and mining activity. Contributors gain bonuses by selecting new members to join their trust circle, performing the verification layer for the blockchain. Ambassadors earn their rewards by inviting new users to the app, and Node Operators gain bonuses by setting up a full node on a computer or locking up some of their earned PI.
Currently, users may use the app without fulfilling KYC requirements, but if they wish to transfer their cryptocurrency to another blockchain (for sale purposes), they must meet KYC requirements before doing so. In the future, the developers hope the change this.
What Can Pi Be Used For?
Currently, PI is a method of storing value, like Bitcoin is. Meaning individuals can transfer their PI to other blockchains, to swap it for similar cryptocurrencies, or to purchase items on PI-enabled marketplaces.
Unfortunately, due to the closed nature of the PI system, PI is mostly a speculative cryptocurrency—meaning its value is gained through speculation of future value and not necessarily what the network is worth right now. Keep this in mind as you continue reading.
Who Created Pi Network?
Pi Network was jointly founded by Dr. Nicolas Kokkalis and Dr. Chengdiao Fan, both of whom received PhD’s from Stanford University and continue to be involved in the project today. Kokkalis is currently in charge of the tech portion of the project, while Fan is responsible for the future of the other aspects of the project.
Pi is headquartered in the Silicon Valley in the United States, though they also have a presence in Europe and Asia.
Should You Use Pi Network?
We have conflicting feelings about this project. While they are open and honest about who they are and how the platform works, we aren’t sure this is enough for the platform to have a future.
Let us explain. As we mentioned above, the current value of PI is based solely on speculation—people joining the network in hopes it will be the next big thing. That being said, the current setup of the network is a bit of a pyramid scheme—you gain rewards for inviting friends—and thus, we aren’t sure whether there is really value behind the project. Because if there isn’t, the project will eventually collapse.
These worries are furthered by the fact that PI is a closed network, and while developers can create apps that use PI, the network itself lacks the capabilities and primacy that Ethereum and Solana currently have. Other than the fact that it is easy for anyone to mine PI from a mobile device, we aren’t sure we see the benefit of choosing this platform over Ethereum.
Although the creators of Pi Network plan to transition the platform into an open network which would increase interoperability, we can’t say for sure whether this will be enough to make Pi a major player in the Web3 space.
With that in mind, while we don’t advise against getting involved in the Pi project, we don’t necessarily recommend it either. Just be careful if you do decide to move forward, and never spend any money on PI that you don’t intend to eventually lose. Also, be cautious to advise any family members you invite to the project—as they may not be as knowledgeable about how a speculative cryptocurrency like PI functions.
Where Can You Buy PI?
If you want to hold PI, it seems like a good idea to download the app and become part of the mining procedure. That being said, you can also buy PI on lots of exchanges. Below are some of the easiest to access, though there are likely many more that we didn’t mention whom also sell PI.
· OKX
· Bitget
· MEXC
· Gate.io
· LBank
· Pionex
· Hotcoin
Take note that most of these exchanges are decentralized, meaning they may not have the same consumer protections as centralized exchanges and that you may be buying directly from the seller rather than from an automated market maker.
Overall, Pi Network isn’t the worst project we have featured on our altcoin spotlight, but it is far from the best. If you are looking to get involved in cryptocurrency, we highly suggest starting with a project that is not Pi Network.
