Pi Network has caught the attention of the entire crypto industry, offering an accessible and novel mechanism for mining cryptocurrencies using only a mobile phone.
Since its launch, the project has been considered both disruptive and controversial, breaking the paradigms of a sector historically dominated by specialized equipment and high energy consumption. However, despite its rapid growth, Pi Network has been severely questioned regarding the long-term sustainability of its model.
What is Pi Network?
Pi Network is a crypto platform that aims to democratize access to mining. Unlike projects like Bitcoin or Ethereum, whose mining requires large investments in specialized hardware and consumes a massive amount of energy, Pi Network proposes an accessible alternative: mining through a mobile device. This groundbreaking change has the potential to open the doors of mining to people worldwide, regardless of their purchasing power or previous technical knowledge.
Launched in 2019 by a team of Stanford University PhDs, Pi Network seeks to fundamentally change the established rules of the crypto industry. The project’s main proposal is to allow users to earn cryptocurrencies simply by participating daily in the network, without the need to invest in extremely expensive equipment.
By eliminating the technical and financial limitations traditionally associated with conventional cryptocurrency mining, Pi Network could be an alternative capable of attracting a massive audience, especially in regions where the infrastructure for traditional mining is limited or outright unfeasible.
Since its creation, the platform has managed to gather a community of over 60 million users. These users, known as “Pioneers,” have access to a simple and straightforward way to generate Pi tokens, solely through the use of a mobile application. Although the platform is still in its development phase and has not launched its open mainnet, the growth of its user base and the interest generated around it suggest that Pi Network could be a significant shift for the industry.
How Does Pi Network Work?
Pi Network’s operation stands out due to a consensus system that directly involves its users. Instead of relying on powerful mining machines and high energy consumption, the Pi Network is built on the Stellar Consensus Protocol (SCP), a mechanism that allows transactions to be validated efficiently and with less environmental impact.
Users participate in the network by performing a simple action: logging into the mobile app and pressing a button that allows them to “mine” Pi tokens. This process is repeated once every 24 hours, generating a daily reward in tokens that accumulate in their personal balance. This system is designed to be extremely user-friendly, enabling anyone, regardless of their knowledge level, to participate in the ecosystem.
Additionally, Pi Network has a unique role system in the industry. Users are not limited to mining but can also take on different responsibilities within the network. Users are grouped into different categories: Pioneers, Contributors, Ambassadors, and Nodes. Each has a role that contributes to the network’s growth and security.
For example, Contributors are responsible for creating trust lists that validate other users, while Ambassadors invite new members to join the network. Nodes, on the other hand, maintain the operational infrastructure by running validation software.
This role system allows Pi Network to operate efficiently without requiring specialized hardware. The network does not rely on users’ processing power but on mutual trust among members. Instead of traditional proof-of-work (PoW) or proof-of-stake (PoS) processes, the platform relies on a model that rewards trust and community collaboration.
Moreover, as the community expands, the reward system adjusts. Initially, users receive a larger amount of Pi tokens for each action, but as new members join the platform, the reward decreases to keep the supply under control. This deflationary reward model aims to ensure that Pi tokens maintain their value over time.
What is Pi Coin and What Is It For?
Pi Coin, the native token of Pi Network. As mentioned earlier, its distribution model is deflationary, meaning that the reward users receive for their daily participation progressively decreases as the user base grows. This structure seeks to create token scarcity and, consequently, increase its value over time. A maximum supply of 100 billion Pi tokens has been set.
Of this total supply, 80% is allocated to users through mobile mining, while the remaining 20% goes to the development team. While this model aims to be transparent, it has generated some controversy due to its reliance on a referral model.
Criticism of the Model and Lack of Transparency
Despite its rapid growth and the enthusiasm of millions of users, Pi Network has been under criticism for a considerable time. One of the most significant critiques is the prolonged wait for the launch of its open mainnet.
Since its inception in 2019, the platform has operated under a closed model, preventing Pi tokens from being traded in public markets or used outside the application. This extended delay has raised doubts about the project’s viability and maturity, especially when compared to the speed at which other blockchain projects have launched their mainnets.
Another aspect that has generated concern is the referral model, which some consider similar to a pyramid scheme. By relying heavily on recruiting new users to reward participants, this system could compromise the project’s decentralization and favor those who have been involved from the beginning. Additionally, the Know Your Customer (KYC) process required to access certain functionalities has raised concerns about privacy and data handling, as users must provide sensitive information to operate normally.
The Future of Pi Network: New Implementations
Pi Network has continued to innovate to expand its token’s applications beyond mining. Recently, the network launched the auction of “.pi” domains and began integrating new functionalities in its browser.
Although the project is still under development, the team has announced that the transition to an open mainnet is scheduled for 2025, allowing users to trade Pi Coin in external markets and potentially integrate it with other cryptocurrencies.
Furthermore, it could also be integrated into decentralized applications (dApps) and DeFi services, granting it greater utility within the financial ecosystem. However, the success of these developments will depend on the team’s ability to address criticism about its model, including the lack of transparency regarding its mainnet transition and the real adoption of the token outside its network.
Conclusion
Pi Network is a unique proposal designed to democratize access to cryptocurrency mining through mobile phones. A tool with the potential to dismantle many of the economic and technical barriers that limit the participation of small investors in the crypto ecosystem.
Although the project has grown rapidly and has a model that aims to create deflationary value in its token, it still has much to prove and accomplish. Pi Network’s ability to address these challenges and expand its capabilities will determine whether it can sustain itself in the crypto industry
