Pi Network describes itself as a “social cryptocurrency and developer” platform. It claims to allow users to mine Pi coins straight from their smartphones, without environmental impact: “Pi makes crypto mining easy. Breakthrough tech allows you to mine Pi on your phone without draining your battery.”
According to CoinMarketCap, the platform has an engaged user base of more than 35 million. But with reports questioning the legitimacy of the platform, it appears not all is as it seems…
Let’s dive into this controversial project!
What is it?
Pi Network is a crypto platform that allows users to complete ‘mining’ operations on their smartphones. It was created by Stanford University graduates, Chendiao Fan, Nicola Kokkalis, Vince McPhillips, and Aurélien Schiltz. It launched in 2019.
Pi Network ‘miners’ are rewarded with the PI coin, which the team claim will gain value when it is listed for trading.
Pi claims to simplify the mining process as ‘miners’ only need to click a button every 24 hours to complete mining activity through their smartphones.
It claims to use a consensus mechanism called the ‘Stellar Consensus Protocol’ and an algorithm called ‘Federated Byzantine Agreement.’ Pi claims that this method is faster, more secure, and more scalable than consensus mechanisms like proof of work and proof of stake.
Is PI available for sale?
PI is not currently listed for sale.
In December 2022, some crypto exchanges, such as Huobi, listed a synthetic version of the PI coin. However, this was simply an IOU (I owe you) token that can be used to speculate on PI’s price movement. So, holders cannot sell these tokens on exchanges.
Pi Network responded that they do not endorse unauthorized exchanges and third parties listing PI or tokens pretending to be PI. They added that users should not “engage with any of these exchanges or third-party actors as their actions are not affiliated with Pi Network.”
Pi Network is currently not approved for listing on any exchange. The network is also not holding ICOs or crowdfunding. Any such sales are unauthorized and not linked to Pi Network.
Legitimate?
A warning on the CoinMarketCap website reads: “There have been reports questioning the legitimacy of Pi Network. Please note that mainnet has not launched yet and the price displayed below for certain exchanges reflect the value of the IOUs and it may not be transferable across exchanges.”
After a deeper dive into the platform and its structure, PI appears, at worst, to be a massive ponzi scheme. At best, it’s a pyramid scheme.
Pi ambassadors onboarding more people with incentives (more Pi coins)? Pyramid scheme.
The saying “if you don’t know where the yield comes from, you are the yield” feels relevant.
It is also unclear how Pi can mine without using power. It’s not really mining, it’s proof of stake wrapped up as “mining” to attract those who have heard of Bitcoin mining. Another red flag.
As we’ve seen in the past, if it seems too good to be true – it is.
