Pi Network & The Potential
For the past few weeks, my brother has been consistently checking in with us, making sure we are mining our daily amount of Pi tokens. I signed up for Pi about two weeks ago because my brother was persistent about being a Pi pioneer. He compared it to how Facebook started. For those not familiar (I'm pretty sure everyone knows about Facebook), Facebook started as a college application.
I had promised him that I would look more into the potential for the Pi tokens and how it could be the new cryptocurrency to watch. I am unfamiliar with how cellular mining works, the White papers in general, and the overarching problem Pi solves. So, this blog will allow both of us to gather new knowledge on Pi and, in a more generalized way, on cryptocurrency. I found a useful YouTube video explaining the Pi Network (I'll post the link below the blog)
---Disclaimer: I am not giving investment advice, I am only making you aware of the recent news regarding cryptocurrency so you can better understand the coin, technology, and the overall effect cryptocurrencies are currently having in the world we live in.---
Let's dig in.
Question: "What is the Pi Network?"
Answer: Pi Network claims to be the first cryptocurrency you can mine on your mobile device. I have heard of other currencies allowing for this mobile device mining (you might be familiar with Bee and their Bee Coins.) Like all cryptocurrencies, Pi Network wants its processes to be secure, cannot be falsely replicated, and mining the Pi tokens does not drain your phone's battery.
The creators of the Pi Network all have completed PhDs from Stanford University. The inception of Pi is similar to the development of Facebook with Mark Zuckerburg and his Harvard peers.
The developers of the Pi Network are Dr. Nicolas Kokkalis, Dr. Chengdiao Fan, and Dr. Vincent McPhillip. People curious can find the Pi Network on social media. They have a Facebook, Instagram, and Twitter Account. Interestingly, though, you only see Vincent McPhillips's face through social media platforms. Also, their Twitter account has just over 150 tweets. I would feel as if the Pi Network would be more into growing their social media awareness because they are in the beginning phases of their cryptocurrency.
Just like any business, there are phases in which a company or program develops and grows. The Pi Network is on the latter end of phase one. The three phases are 1) Designing and Developing a user interface to increase volume and awareness of the Pi Network. Here you cannot buy or sell Pi tokens on an exchange site. 2)Deploying the node software on the test net. Pi Network users will download their nodes and prepare the Pi Network for the Mainnet (mainnet refers to the blockchain running effectively). 3) The first phase will cease to commence, and all mined cryptocurrencies will be open for trading.
Currently, there are four types of miners on the Pi Network in the starting period for phase one. The four types are as follows: Pioneer, Contributor, Ambassador, and Node Holder. Pioneers are the individuals who mine Pi tokens using the mobile application. In phase two, Pioneer users are also able to send or receive Pi tokens. Contributors or users who find new users to be within the Pi Network. An ambassador is an individual that is a glorified contributor. They receive a 25% increase in mining power for finding new Pi Network users.
For example, I am a pioneer. I click the mining button daily to get the .12 PI tokens. My brother referred me to the Pi Network and has earned the mining increase. He is an ambassador. Lastly, the final mining type is the Node Holder. These individuals are running the blockchain through their computers and help with the ledger recordings.
You aren't subject to any one type of Pi miner. You can be someone who holds a running node while expanding the public awareness of Pi and clicks the daily mining amount.
Now we know about the Pi Network.
Question: "What are the economic principles of the Pi Network?"
Answer: The total supply of Pi tokens equals the total mining, referral, and developer rewards. (TS = MR + RR+ DR)
MR (mining rewards): There is a fixed supply of Pi tokens for the first 100 million users.
RR (referral rewards): The referral of a user will never cease to exist. Once you refer someone and mine their tokens, you gain the reward percentage (25%).
DR (developer rewards): Pi tokens minted from the process of being mined. (similar to Bitcoin mining. If a supercomputer completes the math problem first, the miner is rewarded with a fraction of a Bitcoin.)
Question: "What are some instances in which network users can use Pi?"
Answer: Potential areas users can use the Pi Network are in the Pi Stack. Those areas revolve around an open ledger and trust between the users and the overall network, and attention marketplace (this area is similar to the Basic Attention Token aka BAT on the Brave Browser), and finally decentralized applications (applying smart contracts).
Just as I was typing this, I thought to myself, "I hadn't mined today." When I opened the application and pressed the little mining button, a notification popped up that was new. It revolved around the attention marketplace. The Pi app showed two ads, and after a few seconds, you can escape the ad.
The ads reminded me of almost any game app on my smartphone and how ads are relevant when you want to exercise an action in the game you are playing. I'm not sure how the payment process works, but I'm assuming it has to deal with the volume and amount of Pi Network users and how often the ads present themselves when the user mines Pi tokens.
I'm not too fond of the ads; it makes it feel like mining the Pi tokens is a game when it is a possible investment opportunity. Pi should focus their acceptance to ads in fields related to cryptocurrency, Coinbase ads, or maybe even Brave browser ads.
Question: "What are some things that are still unknown about the Pi Network?"
Answer: There are a few things that stick out. The first being the total supply of Pi tokens on the blockchain when it hits phase three. Unlike Bitcoin (21 million) or Litecoin (84 million), Pi has no set amount on the total supply. The second is the credibility of the network. Truly the only face on Pi's social media is Vincent McPhillips. I'm curious as to why the other two Stanford doctors are hiding in the shadows. The last question is a big one. Pi Network's selling point on all this is you are mining these tokens on your smartphone. The term "mining" is not used accurately. What you are being rewarded with when you press the "mining" button are Pi tokens. Still, you aren't creating (aka mining), hence developing additional nodes on the blockchain. We are still in phase one (no testnet released); therefore, no blockchain has been available. You cannot create a cryptocurrency for a nonexistent blockchain.
Overall, I'm glad that my brother is taking an interest in blockchain technology. Maybe my dinner talks about cryptocurrency were interesting enough for him to conduct his research. I am intrigued to see what lies in the future for the Pi Network. You best believe I'll stick to my word and check the Pi application daily. Who knows, maybe this is the next Facebook.
Until next time,
Seth Hinkle
Thank you to the Blockchain For Beginners YouTube channel for having an informal video on the Pi Network. Most of the information in this blog is found in the YouTube link below: