Pi Network
Pi Network is a blockchain-based project that allows users to mine cryptocurrency on their mobile phones without draining their batteries or requiring specialized hardware. The network aims to make cryptocurrency accessible through an energy-efficient mining approach to everyday people. [2]
Overview
Pi Network is a blockchain-based platform that enables users to mine Pi, the native cryptocurrency, using mobile devices. Launched on March 14, 2019, it aims to create a decentralized ecosystem where users contribute to network security and development through a lightweight consensus mechanism.
The network relies on a large user base, called "Pioneers," who earn Pi tokens by verifying their identity and participating in the system. Pi Network incorporates Know Your Customer (KYC) verification to prevent automated accounts and ensure that real individuals contribute to its development. The project emphasizes accessibility, aiming to integrate blockchain technology into everyday applications while maintaining a decentralized governance model. [1]
Open Network Launch
Pi Network's Open Network enables external connectivity and allows Pioneers to interact with the broader blockchain ecosystem. This milestone facilitates Pi's integration with centralized exchanges (CEXs) and third-party services, broadening its utility and reach. Pioneers can now engage in transactions beyond Pi’s ecosystem and access a list of KYB-verified businesses for safer interactions.
The Open Network also introduced business compliance requirements, including KYC for individuals and KYB for businesses, to ensure a secure and regulated environment. Businesses must complete KYB verification to create non-custodial Pi wallets and engage in Pi ecosystem transactions. Additionally, the Open Network allowed for removing the firewall from the Enclosed Network, enabling users to add nodes to the Mainnet blockchain. An update was released to improve node performance and prepare for public ranking. [9]
Technology and Features
Mobile Mining
Pi Network's primary innovation is its mobile mining approach. The technology lets users mine Pi cryptocurrency directly from their smartphones without significant battery drain or computational requirements. This approach contrasts traditional proof-of-work cryptocurrencies like Bitcoin, which require specialized hardware and consume substantial electrical power [2].
Mining Mechanism
Pi Network's mining mechanism stands out for its energy-efficient approach. Unlike traditional cryptocurrencies that rely on energy-intensive Proof of Work, Pi Network uses a lightweight consensus algorithm that minimizes resource consumption. Rather than solving complex mathematical problems, the mining process focuses on user engagement and network growth. Each user contributes to the network's security by verifying transactions and inviting new members, creating a sense of community and making the process accessible to a wider audience.
Users mine Pi coins by logging into the app daily, with the mining rate increasing by inviting friends to join. The app offers a user-friendly interface to track mining progress and total earnings. This system is designed to be sustainable and energy-efficient, encouraging participation and facilitating easy monitoring of mining activity. [8]
Pi Node
Pi Nodes are a crucial component of the Pi Network ecosystem, running on laptops and desktops rather than mobile phones. Nodes are responsible for validating transactions on the distributed ledger and maintaining consensus on the network. Unlike Bitcoin or Ethereum, which use proof-of-work consensus mechanisms, Pi Network uses a different algorithm based on the Stellar Consensus Protocol (SCP).
In the SCP model, nodes form trusted groups (quorum slices) and only agree to transactions that those trusted nodes agree to. The security circles from Pi mobile miners aggregate into a global trust graph that enables Pi Nodes to form quorum slices to determine who can validate transactions on the shared ledger. [3]
There are three levels of node participation in the Pi Network:
- Computer App: This basic level allows users to interact with the Pi app from their computers, with similar functionalities to the mobile app.
- Node: At this level, users can install the necessary technical components to run the blockchain component after being selected. Nodes verify the validity of the blockchain and submit transactions to be recorded.
- SuperNode: These are the backbone of Pi's Blockchain, responsible for reaching consensus and ensuring other nodes get the latest state of the blockchain. SuperNodes need to be connected to the network 24/7 and have reliable internet connections.
The selection process for Nodes and SuperNodes involves downloading and installing the Pi Node software, filling out an application, and being selected by the Core team based on criteria such as uptime, internet connection quality, hardware specifications, and previous contributions to the Pi community [3].
Pi Ad Network
The Pi Ad Network is designed to create additional platform-level utility by integrating advertising within the Pi ecosystem. Advertisers must acquire and use Pi to place ads on Pi Browser and Pi Apps. The ad network is currently being tested within the Fireside Forum app before expanding to community developers through a Software Development Kit (SDK).
The Pi Ad Network provides a monetization solution for Pi Apps developers by allowing them to earn from ad placements. This aligns financial incentives with increasing operational costs. During the Enclosed Network period, developers will receive compensation in USD or an equivalent value, with the full Pi-based ad model becoming viable in the Open Network phase.
To improve user experience, the Pi Ad Network will offer a unified framework, ensuring higher-quality ads sourced from reputable providers rather than allowing inconsistent or disruptive advertisements. This approach enhances app engagement and trust within the ecosystem.
By linking ad transactions to Pi cryptocurrency, the network reinforces the organic demand for Pi while ensuring fair value distribution among developers, advertisers, and users. This model supports the sustainable development of the Pi Network by incentivizing app innovation and creating real-world use cases for Pi. [4]
Pi Stack
Pi Ledger
The Pi Ledger and Shared Trust Graph aim to establish a decentralized trust system on the internet, reducing reliance on intermediaries like Amazon, eBay, and Yelp for transaction credibility. While existing platforms profit from user-generated ratings and reviews, Pi’s consensus algorithm builds a global trust graph that enables secure transactions without third-party control.
Pi’s security model relies on individual Security Circles, which, when combined, create a network-wide trust layer. This structure allows users to gauge the reliability of others within the Pi ecosystem, facilitating interactions between previously unconnected individuals. By integrating trust directly into its consensus mechanism, Pi ensures that those who contribute to network security also share in the value generated by the system. [7]
Attention Marketplace
Pi’s Attention Marketplace enables members to pool their collective attention, creating a market more valuable than any individual’s engagement alone. The first application of this model is a social media channel integrated into the Pi app’s home screen, where only one global post is visible at a time. Users can stake Pi to share content or ask questions, leveraging the network’s collective insight. Pi’s Core Team has used this feature to gather community input on design decisions, such as logo elements.
Beyond peer interactions, Pioneers can also engage with companies willing to compensate them in Pi for their attention. Traditional advertising bombards users with thousands of ads daily without rewarding them, but Pi’s marketplace offers an opt-in model where users can monetize their attention. This system shifts value from advertisers to participants, creating an alternative to conventional ad-driven platforms. [7]
Barter Marketplace
Pi’s Barter Marketplace allows members to offer goods, services, and skills through a virtual storefront on the Pi mobile app. This feature enables members to list underutilized assets, such as renting a room, or showcase personal services, such as programming or design skills. As the marketplace grows, a diverse range of goods and services will bolster the value of Pi, supporting the network’s economy and enhancing its utility beyond just a currency. [7]
App Store
Pi’s Decentralized App Store enables developers to create decentralized applications (Dapps) without starting from scratch. By leveraging Pi’s existing infrastructure, shared currency, trust graph, and community resources, developers can propose new Dapps and access the network’s shared assets. The platform will also support interoperability, allowing Dapps to reference data and assets across other applications, fostering a more interconnected ecosystem for creators and users. [7]
Community and Ecosystem
Pi Network has built a large community with a network that emphasizes community participation and contribution, with users playing various roles in the ecosystem:
- Pioneers: Regular users who mine Pi through the mobile app
- Contributors: Users who help grow the network
- Ambassadors: Users who introduce others to the network
- Nodes: Users who help maintain the network's infrastructure
The Pi ecosystem includes various applications and services, such as Fireside Forum, a Web3 social app launched in May 2023 that integrates tokenomics into social interactions. [4] [7]
Pi Token
Pi is the native token of the Pi Network. It has a total supply of 100B tokens, with 80% distributed to the community and 20% to the core team. Within the community allocation: [7]
- Pre-mainnet Mining Rewards - 20B
- Mainnet Mining Rewards - 45B
- Liquidity Pool reserve - 5B
- Foundation reserve - 10B
Network Structure and Governance
Pi Network operates on a progressive decentralization model, gradually moving from centralized control toward full decentralization. The network has gone through several development stages, including a Testnet phase with three stages:
- Selection Stage: the Core Team runs the consensus algorithm with Pioneers who have applied to become Nodes to understand the requirements for individual Nodes
- Revision Stage: an iterative process of scenario testing and consensus algorithm revision to stress test the network under different conditions
- Live Testnet: different types of nodes actively perform their defined responsibilities with real data from security circles generated by mobile miners [3]
The network relies on its community of "Pioneers" (users) and rewards them through the mobile mining mechanism for their contributions and digital citizenship. Pi Network implements KYC (Know Your Customer) verification to ensure fairness and security to confirm users are real people, disempowering malicious actors, bots, or free riders [1].
Controversies
Internal Conflicts
In 2020, Pi Network co-founder Vincent McPhilip sued fellow founders Nicolas Kokkalis and Chengdiao Fan, alleging wrongful removal and financial mismanagement. He claimed their personal conflicts created a toxic work environment, interfering with his leadership and leading to attempts to dilute his ownership stake. The dispute escalated when McPhilip temporarily stepped away, which Kokkalis and Fan interpreted as abandonment, revoking his access to company assets. They countered that his dismissal was due to policy violations. Pi Network had raised funds through SAFE investments at a $20 million valuation in 2019 and 2020. The lawsuit was settled in July 2023 without disclosed terms, and McPhilip later founded Knomad while remaining active in crypto. [5]
Scam Accusations
Pi Network faced accusations of being a scam after a Bybit CEO, Ben Zhou, posted on February 20, 2023, claiming the project was illegitimate. Zhou's statement followed a claim from an "unofficial technical team" account, which alleged that Pi Network had rejected a listing offer from Bybit. Zhou also referenced a Chinese report from 2023 that warned about a project targeting elderly users, further fueling his accusations of fraud. In response, Pi Network denied any connection with Bybit, confirming that Bybit had not requested a Know Your Business (KYB) verification and had no relationship with the project. The company also clarified that it was not associated with the X account that had provoked Zhou's comments.
In addition to addressing the listing allegations, Pi Network responded to concerns raised by Zhou regarding police warnings and user base inflation. The project denied any affiliation with fraudulent actors referenced in the police warnings and condemned such activities. Pi Network also clarified that its user count of 60 million represented active app users, with over 100 million downloads on the Google Play Store. Regarding blockchain explorers showing 10.8 million users, Pi explained that these users had created wallets on the blockchain, a smaller number than the total registered users, as completing wallet creation required additional verification steps. [6]
