COULD PI COIN BE THE NEXT BIG THING IN THE CRYPTO REVOLUTION?
Oh my! what if these people are just trying to harvest your data and resell it? Maybe this could be one of the biggest scams to go down in history. I mean, who gets free money by just tapping a freaking button on the phone that says MINE?
Let’s calm down a bit; we may be getting ahead of ourselves here.
The Pi network and Pi cryptocurrency have been generating a lot of buzz lately, so I thought: “the heck why don’t I just take a look at this and see how I can help the guy next door make sense of the whole Pi buzz all over the place?” Maybe you’ve seen the Pi mobile app which you can use to mine Pi for free before the mainnet is launched, and you are wondering what the Pi network and Pi cryptocurrency are all about, we are going to settle that in this post.
If you’re ready, I’m ready, so shall we get started now?
WHAT IS PI NETWORK?
The Pi network is the system or set of all intact interconnected nodes that maintain the integrity and security of the Pi blockchain. The Pi Network is based on the Federated Byzantine Agreement system which is a system consisting of nodes and quorum slices for each of these nodes; this is the same algorithm that Stellar is based upon. We’re talking about the Stellar Consensus Protocol (SCP) here.
IS THE PI NETWORK LEGIT?
Yes, the Pi network is legit. The Pi network is not a get-rich-quick scheme, it’s a deliberate effort by a group of Stanford graduates to bring cryptocurrency to the common folks. The strategy was to launch in beta, create a faucet-like arrangement that lets people mine from their mobile phones, and allow people to accumulate some Pi coins for themselves. before the mainnet is finally launched. So, you can rest assured that the Pi network is not a scam.
Please note that The Pi network doesn’t require any payment or registration fee of any kind from you, it’s absolutely free to join. So, if you are by any means interested in getting some Pi cryptocurrency for yourself, this is the best time to join the moving train, because the nearer the project gets to the final phase, the more difficult it will be to mine Pi cryptocurrency.
How do you join the Pi network? First, download the Pi app, register with your correct details, and start mining. Please note that you will be required to verify your account later (KYC), so, for this reason, I recommend you sign up with verifiable and correct details only.
I just reassured you that Pi network and Pi cryptocurrency are not scams, so if you decide to mine some of Pi cryptocurrency, use the invite code ralphesan because you can’t get in without an invite code.
WHAT PHASE IS THE PI NETWORK IN?
The Pi network is in the 2nd phase of the deployment plan which is the testnet; this is the phase before the launch of the mainnet. Currently, these are the milestones the Pi network has reached:
- The Pi core team is currently developing the Pi crypto wallet for users to hold their mined Pi coins.
- The test running of nodes and supernodes on the Pi testnet.
- The release of the Pi SDK for developers to develop apps for the Pi ecosystem of apps that will run on the Pi network.
WHAT IS PI WORTH RIGHT NOW?
Because Pi is still in the beta phase (phase 2), not listed on any exchange, and hasn’t launched the mainnet, Pi is not worth anything right now. In essence, what I’m saying is that Pi cryptocurrency’s value is not yet known, and you cannot convert Pi crypto to US dollars or any fiat currency for that matter. The Pi price prediction is that one Pi could be worth anything between one to one hundred dollars when the mainnet launches, but these are mere speculations that you shouldn’t really concern yourself with.
Nobody knows the Pi network price for now or what it will be worth later. The value of Pi crypto will be determined by its utility which the core team is still working on. I think the future is looking really bright for Pi considering the rate of adoption by people from all walks of life. If this matters to you, then owning some Pi may not be for you. But if you’re looking to the future for your gratification, then it’s advisable to own some Pi now since it costs you nothing.
The Pi mainnet is scheduled to be launched in the last quarter of 2021, and we will know what Pi coin is worth when this goes live.
THE PI APP
The Pi app, also called the Pi cryptocurrency app by some people is the official app developed by the Stanford graduates that started the Pi revolution. This is the app that every member of the Pi network has to install on his or her smartphone to be part of the Pi network. When you install the Pi app, there are roles you can take as a user which are as follows:
A pioneer is a user of the Pi mobile app who is simply confirming that they are not a robot daily. This type of user validates his or her presence every time he or she signs in to the app. By doing this, the user gets to mine some Pi just for opening and signing into the app every day.
A contributor is a user who is contributing to the security of the Pi network by defining his or her security circle. This user provides a list of pioneers that he knows and trusts as his quorum slice, and helps build a global trust graph in aggregate.
An ambassador helps maintain the liveness and the growth of the network by inviting and introducing other users to the Pi network.
A node is any Pi network user who is a pioneer and contributor, and also runs the Pi node software on his computer. The Pi node software is the software that runs the core SCP algorithm, making use of the global trust graph information provided by the contributors. We will still take a thorough look at Pi nodes later on as we look at the Pi whitepaper.
Pi mining is the process of contributing to the growth and security of the Pi network and being rewarded with Pi coins in the course of doing that. You can take on any of the four aforementioned roles and you’ll be rewarded with Pi cryptocurrency for doing that. To start mining Pi, you need to download the Pi app, and also the Pi node software if you intend to run an instance of Pi node.
Although decentralized, Pi is not an anonymous network or blockchain; it is based on mutual trust and being able to identify every member of the network. When you are registering for an account on the Pi network, you provide details like your real names, username, and mobile phone number which you will verify by sending a text message to a number provided by the Pi core team. Please note that you will need to provide your ID documents before you claim your mined Pi coins when the mainnet is finally launched; this is to prevent the hoarding of Pi by some folks who would create fake accounts to accumulate as many Pi coins as possible. The KYC has already started and will cover the whole network with time.
THE PI INVITATION CODE
Joining the Pi network is strictly based on invitation. So, if you are going to join the Pi network you need someone who’s already part of the network to invite you. Since you are reading this, use the invitation code ralphesan to join the network because you’ll need it (you’ll be asked).
THE PI CORE TEAM
It’s expected that you’d want to learn about the people behind Pi, and I’m going to tell you a bit about them. The following three people are key to the creation of the Pi network.
- DR. NICOLAS KOKKALIS (HEAD OF TECHNOLOGY)
Dr. Nicolas Kokkalis (Head of Technology for the Pi Network Project)
Dr. Nicolas Kokkalis is the head of technology for the Pi network. In his own words, he has been a technologist all his life and this led him to do a Ph.D. at Stanford University. He taught Stanford’s first decentralized applications class; combining distributed systems and human-computer interaction to bring cryptocurrency to everyday people.
As a young undergraduate, Nicolas Kokkalis designed and built a novel computer motherboard from scratch in the lab, and also created a framework for writing smart contracts on fault-tolerant distributed systems before blockchain and Ethereum came to exist, which was published in his MS thesis.
Nicolas Kokkalis was also part of the brains behind an online Game platform known as Gameyola in the company. Other co-founders include Abhishek (Abhi) Kumar, Drew Uher, and Sanaz Motahari. The current team members of Gameyola include Ketan Shah (CEO) and Nicolas Kokkalis (Founder).
As you can see, Nicolas has been a technologist all his life, but it would appear that the most successful venture he ever got himself involved in is the creation of the Pi network. That’s how most people will ever know his name.
- DR. CHENGDIAO FAN (HEAD OF PRODUCT)
Dr. Chengdiao Fan (Head of Product Pi Network)
A mother, who is also a scientist, an engineer, and a Ph.D. holder in computational anthropology. Dr. Chengdiao Fan, as the name suggests, is of Chinese descent, and has various research projects and papers to her credit.
Chengdiao once founded a startup that builds an email productivity platform that scales conversations by crowdsourcing. She states that she’s excited by blockchain technology and what excites her about blockchain technology is the merging of decentralization with an economic instrument just as it is in the case of the Pi network.
- VINCENT MCPHILLIP (HEAD OF COMMUNITY)
Vincent McPhillip (Head of Community Pi Network Project)
Vincent is from Trinidad and Tobago, and he describes himself as a Yale and Stanford-trained social movement builder on a mission to democratize how society defines, creates, and distributes wealth.
After graduating from Yale University (BA, Political Science), he turned down an investment banking job on Wall Street to launch WellWyn, a community-based wellness practice. Frustrated by how hard it was to create social work at scale, he decided to join a nonprofit / NGO consulting company called Bridgespan where he worked with philanthropists and NGOs to raise funds for education and workforce development in communities across the U.S.
During his time at Bridgespan, Vincent became convinced that providing people with equal opportunity to acquire wealth would require shattering a deep-rooted myth: that you can’t prosper financially while doing good for the world.
Vincent later enrolled at Stanford’s Graduate School of Business, where his passion for devising ways for equal distribution of wealth among the common folks only grew explosively. He is convinced that cryptocurrency is one of the most powerful tools available to provide opportunities for people everywhere to achieve a new meaning of prosperity. This is the reason for his involvement in the Pi network project.
Vincent is a social movement builder, comes across as a philanthropist, and a genuinely nice guy. You can read his full profile here.
THE PI WHITEPAPER
Let’s take a look at the documentation that explains everything about Pi, from conception to inception to completion; let’s look at the Pi whitepaper. Things are going to get a bit technical from here on though, but I’ll do my best to simplify them.
THE NEED FOR PI NETWORK AND CRYPTOCURRENCY (THE PROBLEM)
Where there is a problem, a solution becomes a necessity. There is a problem that the Pi core team are trying to solve, and you will see that the Pi core team members have a valid point when you look at the problem they discussed in the Pi whitepaper that was the precursor to the creation of the Pi app, and as a whole, the Pi network.
So, what is the problem the Pi core team wants to solve? Actually, it’s a common problem with cryptocurrencies; it is the problem of accessibility. According to the Pi whitepaper, the centralization of power and the bulk of the first generation of cryptocurrencies being owned by only a few early birds is the major problem they have to solve. Accessibility is a major problem that still plagues the first generation of cryptocurrencies like Bitcoin, and many other altcoins that followed.
After conducting research, the Pi core team discovered the biggest barrier to mainstream adoption of cryptocurrency is the risk of investing/mining. The common folks can’t afford the expensive rigs required to mine most of these cryptocurrencies or the high energy charges that come with them. This presents a problem that needs a comprehensive solution that the Pi core team decided to tackle headlong, and for this reason, the Pi network and cryptocurrency were born.
Now, let’s look at some excerpts from Pi whitepaper discussing the issues Pi is meant to resolve:
As the world becomes increasingly digital, cryptocurrency is the next natural step in the evolution of money. Pi is the first digital currency for everyday people, representing a major step forward in the adoption of cryptocurrency worldwide.
Our Mission: Build a cryptocurrency and smart contracts platform secured and operated by everyday people.
Our Vision: Build the world’s most inclusive peer-to-peer marketplace, fueled by Pi, the world’s most widely used cryptocurrency.
In the early days of Bitcoin, when only a few people were working to validate transactions and mining the first blocks, anyone could earn 50 BTC by simply running Bitcoin mining software on their personal computer. As the currency began to gain in popularity, clever miners realized that they could earn more if they had more than one computer working to mine.
As Bitcoin continued to increase in value, entire companies began to spring up to mine. These companies developed specialized chips (“ASICs”) and constructed huge farms of servers using these ASIC chips to mine Bitcoin. The emergence of these enormous mining corporations, known drove the Bitcoin Gold Rush, making it very difficult for everyday people to contribute to the network and get rewarded. Their efforts also began consuming increasingly large amounts of computing energy, contributing to mounting environmental issues around the world.
The ease of mining Bitcoin and the subsequent rise of Bitcoin mining farms quickly produced a massive centralization of production power and wealth in Bitcoin’s network. To provide some context, 87% of all Bitcoins are now owned by 1% of their network, many of these coins were mined virtually free in their early days. As another example, Bitmain, one of Bitcoin’s biggest mining operations has earned billions in revenue and profits.
Source: Pi Whitepaper
Okay, we know the problem that led to the creation of Pi cryptocurrency, but what about the solution that the Pi network is bringing to the table?
…and the solution is
PI – ENABLING MINING ON MOBILE PHONES
After identifying these key barriers to adoption, the Pi Core Team set out to find a way that would allow everyday people to mine (or earn cryptocurrency rewards for validating transactions on a distributed record of transactions). As a refresher, one of the major challenges that arise with maintaining a distributed record of transactions is ensuring that updates to this open record are not fraudulent. While Bitcoin’s process for updating its record is proven (burning energy/money to prove trustworthiness), it is not very user (or planet!) friendly. For Pi, we introduced the additional design requirement of employing a consensus algorithm that would also be extremely user-friendly and ideally enable mining on personal computers and mobile phones.
In comparing existing consensus algorithms (the process that records transactions into a distributed ledger), the Stellar Consensus Protocol emerges as the leading candidate to enable user-friendly, mobile-first mining. Stellar Consensus Protocol (SCP) was architected by David Mazières a professor of Computer Science at Stanford who also serves as Chief Scientist at the Stellar Development Foundation. SCP uses a novel mechanism called Federated Byzantine Agreements to ensure that updates to a distributed ledger are accurate and trustworthy. SCP is also deployed in practice through the Stellar blockchain that has been operating since 2015.
Source: Pi Whitepaper
In essence, the Pi core team is saying the solution to the problem of accessibility and adoption that affect most potential users of cryptocurrency is to create a cryptocurrency that they can mine on their mobile phones. Since almost everybody makes use of a smartphone these days, this will ensure a high level of inclusion.
Now, we’ve gotten down the problem that necessitated the creation of Pi and the solution that Pi has provided. What’s next now?
From the definition of the Pi network that I gave above, you’d notice there are important concepts that must be understood about blockchain technology in general if we are to understand the Pi network and Pi cryptocurrency to the best of our abilities. Let’s take a look at some of these vital concepts that we need to grasp to have a clear picture of what we are talking about here.
THE PI DISTRIBUTED LEDGER (BLOCKCHAIN)
Why is it called a distributed ledger? It’s because this virtual ledger is distributed to all members of a (usually decentralized) network of peers. It’s like saying everybody (node) will have his/her own copy of this virtual ledger, and every individual copy of the ledger will be actively updated when new transactions happen, so far the node is not faulty.
A blockchain is a specific type of DLT (distributed ledger technology) that can be defined as a sequential block of transactions that are cryptographically hashed together.
The blockchain is made up of nodes that are actively being synchronized and updated with immutable records of transactions known as blocks.
Blocks can be likened to something like a page of a ledger where you input transaction records and turn them over to the next page once that page is full of records or completed. Each new block validates the records of the previous blocks before it with cryptographic hashes to maintain the validity and sanctity of the blockchain.
Do note that the strength and security of any distributed ledger technology depend on the nodes (computers and smartphones) that power it even if its consensus protocol is fault-tolerant.
Okay, that is my own simplified explanation of the distributed ledger technology, and more specifically, the blockchain.
Let’s see how the Pi core team defines the Pi blockchain
A blockchain is a fault-tolerant distributed system that aims to totally order a list of blocks of transactions. Fault-tolerant distributed systems is an area of computer science that has been studied for many decades. They are called distributed systems because they do not have a centralized server but instead they are composed of a decentralized list of computers (called nodes or peers) that need to come to a consensus as to what is the content and total ordering of blocks. They are also called fault-tolerant because they can tolerate a certain degree of faulty nodes into the system (e.g. up to 33% of nodes can be faulty and the overall system continues to operate normally).
ADVANTAGES OF DISTRIBUTED LEDGERS (BLOCKCHAIN)
- NO CENSORSHIP
Since most distributed ledgers are intended to be decentralized in nature, there is no central authority that keeps records of transactions, controls the flow of money, or censors the stakeholders of a blockchain-driven economy. In other words, there is no central record of truth used in deciding the fate of every transaction, as we have in the traditional banking system and societies.
- SMART CONTRACTS
Smart contracts are contracts that are automatically executed as predetermined by a publicly auditable code that had been put in place. A smart contract bypasses the need for middlemen or a trusted escrow service because it is automatically executed once certain conditions are met and cannot be altered or falsified. In other words, smart contracts are immutable and autonomous because they run on blockchain technology.
Cryptocurrencies that are powered by any blockchain are held in cryptographic wallets with addresses that are publicly accessible in the blockchain network. These cryptographic wallets are secured by privately held keys that only the owner has access to. It’s like having a purse in a marketplace where everybody can see it and put coins inside but it’s only the person with the key to that purse that can open it, see the content, or take anything out. Only the person with access to a private key can take control of the content of a wallet. So, if someone has your private key, I don’t need to tell you the rest…
Since transactional records on a blockchain are irreversible, nobody can steal anybody’s funds except they can alter the records and cryptographic hashes on every block ever created. That would mean they need to access every node (computer) that contributes to the blockchain because it’s a peer-to-peer network we are talking about here; not a centralized network. The point is once a transaction is validated, it cannot be reversed. That is like saying if you mistakenly send coins to the wrong person, no way to get them back unless this person sends them back to you; transactions are irreversible.
THE PI CONSENSUS PROTOCOL (STELLAR CONSENSUS PROTOCOL, SCP)
There are two broad categories of consensus algorithms: The ones that elect a node as the leader who produces the next block, and the ones where there is no explicit leader but all nodes come to a consensus of what the next block is after exchanging votes by sending computer messages to each other. (Strictly speaking, the last sentence contains multiple inaccuracies, but it helps us explain the broad strokes.)
Bitcoin uses the first type of consensus algorithm: All bitcoin nodes are competing against each other in solving a cryptographic puzzle. Because the solution is found randomly, essentially the node that finds the solution first, by chance, is elected the leader of the round who produces the next block. This algorithm is called “Proof of work” and results in a lot of energy consumption.
Source: Pi Whitepaper
The Pi Consensus Protocol is based on the Stellar Consensus Protocol and an algorithm known as the Federated Byzantine Agreement. Unlike Bitcoin’s Proof of Work Consensus Protocol, these algorithms do not waste energy but instead rely on a system of messages that are exchanged between the nodes in the Pi network that precedes a voting process to determine what the next block should be, the order of the blocks, the transactions to be recorded in the blocks as valid, and the order of these transactions based on a consensus that emerges after the voting process is completed.
for a network of computers to agree on which transactions to record in a block and the order of these transactions and blocks, they need to message each other and have multiple rounds of voting to come to a consensus. Intuitively, such messages from different computers in the network about which block is the next would look like the following: “I propose we all vote for block A to be next”; “I vote for block A to be the next block”; “I confirm that the majority of the nodes I trust also voted for block A”, from which the consensus algorithm enables this node to conclude that “A is the next block, and there could be no block other than A as the next block”; Even though the above voting steps seem a lot, the internet is adequately fast and these messages are lightweight, thus such consensus algorithms are more lightweight than Bitcoin’s proof of work. One major representative of such algorithms is called Byzantine Fault Tolerance (BFT). Several of the top blockchains today are based on variants of BFT, such as NEO and Ripple.
One major criticism of BFT is that it has a centralization point: because voting is involved, the set of nodes participating in the voting “quorum” are centrally determined by the creator of the system in its beginning. The contribution of FBA is that, instead of having one predetermined quorum, each node sets its own “quorum slices”, which will, in turn, form different quorums. New nodes can join the network in a decentralized way: they declare the nodes that they trust and convince other nodes to trust them, but they don’t have to convince any central authority.
SCP is one instantiation of FBA. Instead of burning energy like in Bitcoin’s proof of work consensus algorithm, SCP nodes secure the shared record by vouching for other nodes in the network as trustworthy. Each node in the network builds a quorum slice, consisting of other nodes in the network that they deem to be trustworthy. Quorums are formed based on their members’ quorum slices, and a validator will only accept new transactions if and only if a proportion of nodes in their quorums will also accept the transaction. As validators across the network construct their quorums, these quorums help nodes to reach a consensus about transactions with a guarantee of security. You can learn more about the Stellar Consensus Protocol by checking out this technical summary of SCP.
Source: Pi Whitepaper
What this means is that the Stellar Consensus Protocol (which Pi network uses) itself is based on the Federated Byzantine Agreement algorithm which is a permissionless BFT protocol, unlike the Delegated Byzantine Fault Tolerance Protocol (DBFT), and the Practical Byzantine Fault Tolerance Protocol (PBFT), which are both variants of the Byzantine Fault Tolerance Protocol.
Instead of having a preselected set of nodes that can take part in the voting process to validate transactions and reach a consensus on the creation of new blocks by a central authority like the other variants of the Byzantine Fault Tolerance (BFT) algorithm, any node can join and contribute independently to the validation of transactions in the blockchain.
Each node in the Pi network can create a security circle of trusted nodes; these are nodes that a user can vouch for to be reputable and not faulty. These other nodes can go on to create their security circles too, inevitably leading to a Global Trust Graph being created; something like a tree of trust.
Before a transaction is agreed upon, or a consensus is reached in the blockchain, a node suggests its resolve to its immediate ‘quorum slice’, this is then debated and agreed upon in that circle, and the node relays the consensus to the other nodes in the network afterward.
You can download the paper on Stellar Consensus Protocol which Pi is based upon for more details.
THE PI NODE
If you’ve been following, you’ll remember I have explained this briefly before. A Pi node is an instance of the Pi node software that is running on a computer. These nodes are meant to validate transactions on the Pi network or blockchain. Since these software applications are run by computers, the computers themselves can also be referred to as nodes.
According to the Pi whitepaper, a correctly connected node is defined as an intact node by the SCP whitepaper.
To run the Pi node, you need to head over to the official Pi network website and download the node software.
ABOUT QUORUM AND QUORUM SLICES
Before a node can be correctly connected to the Pi network, the node is expected to provide a quorum slice, The major unique contribution of Pi to the Stellar Consensus Protocol it uses is the introduction of the concept of trust graph provided by Pi Contributors as information that can be used by Pi nodes when they are setting up their configurations to connect to the Pi mainnet.
WHAT IS A QUORUM?
A quorum is a set of nodes that is enough to have a truly fault-tolerant Federated Byzantine Agreement consensus protocol. A set of nodes can be called a quorum if it is non-empty, and with quorum slices for each member node.
WHAT IS A QUORUM SLICE?
A quorum slice in the Pi network is a security circle. It is a subset of nodes chosen by a node as its security circle to strengthen the security and safety of the network. So, each node in the Pi network gets its own slice which gives it the opportunity of telling the network the nodes that it trusts and considers dependable.
So, let’s say the total number of nodes necessary to reach a consensus in the Pi network is a quorum, then a quorum slice will be like a clique (a subgroup of nodes) with members that a particular node in the network vouches for as being trustworthy and dependable. In essence, what we are saying is that each member node gets to choose its own quorum slice that it considers trustworthy and dependable.
One of the unique advantages of the concept of quorum slice in an FBA system is that it makes it harder for any node with malicious intentions to achieve any selfish goal that is against the network. Even if he adds a million evil nodes to the network, they won’t have any effect unless he convinces most nodes to include these evil nodes in their quorum slices… He’d have the most difficult task of convincing a lot of people to trust a lot of nodes.
For clarity, let’s call a node Matt. Matt, our dearest node is entitled to creating his own little cabinet of folks he loves and trusts to make his own quorum slice.
So, Matt goes like this:
“Since I have a choice to create a circle of people I can trust and always depend on, I think it’s high time I brought in a couple of my own folks that we can deliberate on issues together and submit our consensus to the network.”
“Okay, so I know Eric, Jake, and Ian. I trust and can vouch for them as being dependable without evil intentions. I want them to be part of my security circle in this network, so I’m just going to include them in my security circle straight away, and we’re going to make our voices heard together.”
…but Eric has other plans:
Eric doesn’t know those two other guys that Matt has included in his little quorum slice, but he has a right to create and declare his own quorum slice too. So, Eric decides that since he knows Matt and trusts him to always have the best interest of the network at heart, then it wouldn’t be a bad idea to include Matt in his own quorum slice too. So, Eric includes Matt and a couple of other friends he trusts in his security circle or quorum slice. The presence of Matt (a node) in more than one quorum slice is known as a quorum intersection, and this ensures the safety of the system as no two nodes agree on a different consensus this way because every quorum slice is interconnected with others this way.
…and then Matt always relays the consensus in his quorum slice with other slices he is part of:
“Hey guys, this is what we decided in my own quorum slice, and if you look at issues critically, you’ll see we are correct.”
…and the other guys go like: “oh yeah, we’ve been thinking the same thing too, now you just convinced us we made the right choice. Can somebody get Matt a chilled bottle of beer?”
The input of all these quorum slices is taken into consideration before a consensus is reached in the network.
THE PI ECONOMIC MODEL
If you will agree with me, these three things are very important to the success of any blockchain project: utility, accessibility, and scarcity. How does the Pi network want to balance these factors to create an economically viable crypto revolution? Pi network intends to create a sense of scarcity, but at the same time make Pi coin available to the masses as much as possible. Pi network is structured in such a way that prevents an unfair accumulation of Pi into a very small number of hands in the beginning; it seeks to reward every member fairly for their efforts.
Below are excerpts from Pi white paper that spell out everything:
Pi’s economic model design requirements:
- Simple: Build an intuitive and transparent model
- Fair distribution: Give a critical mass of the world’s population access to Pi
- Scarcity: Create a sense of scarcity to sustain Pi’s price over time
- Meritocratic earning: Reward contributions to build and sustain the network
PI – TOKEN SUPPLY
TOKEN EMISSION POLICY
- Total Max Supply = M + R + D
- M = total mining rewards
- R = total referral rewards
- D = total developer rewards
- M = ∫ f(P) dx where f is a logarithmically declining function
- P = Population number (e.g., 1st person to join, 2nd person to join, etc.)
- R = r * M
- r = referral rate (50% total or 25% for both referrer and referee)
- D = t * (M + R)
- t = developer reward rate (25%)
M – MINING SUPPLY (BASED ON FIXED MINING SUPPLY MINTED PER PERSON)
In contrast to Bitcoin which created a fixed supply of coins for the entire global population, Pi creates a fixed supply of Pi for each person that joins the network up to the first 100 Million participants. In other words, for each person that joins the Pi Network, a fixed amount of Pi is pre-minted. This supply is then released over the lifetime of that member based on their level of engagement and contribution to network security. The supply is released using an exponentially decreasing function similar to Bitcoin’s over the member’s lifetime.
R – REFERRAL SUPPLY (BASED ON FIXED REFERRAL REWARD MINTED PER PERSON AND SHARED B/W REFERRER AND REFEREE)
For a currency to have value, it must be widely distributed. To incentivize this goal, the protocol also generates a fixed amount of Pi that serves as a referral bonus for both the referrer and the referee (or both parent and offspring 🙂 This shared pool can be mined by both parties over their lifetime – when both parties are actively mining. Both referrer and referee can draw upon this pool to avoid exploitative models where referrers can “prey” on their referees. The referral bonus serves as a network-level incentive to grow the Pi Network while also incentivizing engagement among members in actively securing the network.
D – DEVELOPER REWARD SUPPLY (ADDITIONAL PI MINTED TO SUPPORT ONGOING DEVELOPMENT)
Pi will fund its ongoing development with a “Developer Reward” that is minted alongside each coin that is minted for mining and referrals. Traditionally, cryptocurrency protocols have minted a fixed amount of supply that is immediately placed into the treasury. Because Pi’s total supply is dependent on the number of members in the network, Pi progressively mints its developer reward as the network scales. The progressive minting of Pi’s developer reward is meant to align the incentives of Pi’s contributors with the overall health of the network.
F IS A LOGARITHMICALLY DECREASING FUNCTION – EARLY MEMBERS EARN MORE
While Pi seeks to avoid extreme concentrations of wealth, the network also seeks to reward earlier members and their contributions with a relatively larger share of Pi. When networks such as Pi are in their early days, they tend to provide a lower utility to participants. For example, imagine having the very first telephone in the world. It would be a great technological innovation but not extremely useful. However, as more people acquire telephones, each telephone holder gets more utility out of the network. To reward people that come to the network early, Pi’s individual mining reward and referral rewards decrease as a function of the number of people in the network. In other words, there is a certain amount of Pi that is reserved for each “slot” in the Pi Network
Source: Pi Whitepaper
This is one of the most important factors that drive the value of any cryptocurrency. Without any purpose that a cryptocurrency serves, it’s pretty much useless. So, how is Pi going to be useful and serve the people who own it? Below are some of the ways Pi is intended to be of value:
PI’S ATTENTION MARKETPLACE (MONETIZE YOUR ATTENTION)
This is like saying there is a large social media which is the Pi network, and members of this social media can wager some Pi coins to get their content, messages, ads, surveys, and whatever it is in front of other members of the network. It’s like being paid for your attention as a user who opts in to receive messages like this.
Companies pay hefty amounts of money to get their messages in front of potential customers and clients, think Google Ads, Facebook Ads, Instagram, YouTube, etc. As high as this money spent on adverts is, you as the viewer of these ads get no cut of this huge cake. Now, what if there are social media that actually pay you for the content you interact with and pay attention to? The money paid by advertisers in Pi is not going to any central authority because there is none. Instead, the money goes to the targeted audience of these adverts which is you!
Because the Pi network has a large user base who are actually engaged and passionate, this seems like a brilliant idea to me. Wouldn’t you want to get your product in front of millions of people too? This is one of the decentralized applications Pi intends to create.
PI’S BARTER MARKETPLACE (YOUR VIRTUAL STOREFRONT)
As a Pi crypto network member who contributes her attention and trust to the network, you can also get paid for your skills or sell products with storefronts that run on the Pi network. You can offer any form of service, or sell any products so far they are lawful. This eliminates the need for you to set up a payment method with third-party payment providers because you already have Pi blockchain to process these transactions and smart contracts. I’m still looking forward to this being implemented; I think it would be cool.
PI’S DECENTRALIZED APP STORE
The Pi core team already released the SDK for developing apps that will run on the Pi blockchain. The resolve is to make this process as simple and straightforward as possible and lower the barrier of entry for developers to make apps that will run on the Pi blockchain. So, as an app developer, you can develop decentralized apps that will run on the infrastructure the Pi network has already provided. Pi Decentralized App Store makes this possible. To start developing DApps for the Pi blockchain as a developer or an entrepreneur, you can propose your intentions and the kind of DApps you intend to the Pi community with requests for access to the network’s shared resources.
PI’S GOVERNANCE MODEL
Pi’s Governance model is a two-phase model: the pre-five million users provisional governance model and the post-five million users constitutional convention model. What this means is that the model designed for governing the network when it’s still under five million users and when the users are above five million users are different.
So, how does all this work?
PROVISIONAL GOVERNANCE MODEL
Well, the gist is that when the Pi network is still under five million users, the Pi core team will be in charge of taking decisions on the direction the project takes while relying heavily on feedback from the community. We don’t have to dwell too much on the pre-five million users era because that phase was long over. Pi network now has over ten million users, so you’re welcome to the second phase of governance.
This is the phase where a provisional committee is set up based on previous contributions to the Pi network. The committee will then will be responsible for suggesting to the network creative solutions to whatever problem the network is trying to solve. Also, the committee will be responsible for soliciting opinions and suggestions of Pioneers on pertinent issues that require this. Apart from this, this committee will be responsible for organizing Pi conventions where every member of the network can voice his or her opinions on ways to move the Pi network project forward. There has been one of such conventions already tagged Pi Coinvention where contributors were selected from all around the globe. More of these conventions will still happen where the future of Pi and issues about the constitution of the network will be resolved from time to time. The first convention was held remotely via the Pi app because of the Covid19 pandemic, but these conventions are meant to be held both online and offline all around the world.
WHAT DOES THE FUTURE FOR PI?
I was skeptical at first when I joined the network, but I’ve since learned that the future indeed looks bright for this project; I mean over 10 million users already is no joke! The deployment plan of the Pi network and cryptocurrency involves three phases
- Phase 1 – Design, Distribution, Trust Graph Bootstrap.
- Phase 2 – Testnet
- Phase 3 – Mainnet
The Pi network is now in the testnet phase, and according to the development timeline, the mainnet should be live toward the end of 2021.
Before I end the post, let’s take a look at some frequently asked questions about Pi:
ARE PI NETWORK AND PI CRYPTOCURRENCY A SCAM?
No, the Pi network is not a scam. Nobody is ever going to ask you to pay a dime or purchase any fraudulent package to level up or anything like that.
CAN I MINE PI ON MORE THAN ONE DEVICE?
No, there a strict rule of one account per user to prevent an unjust hoarding of PI. All fake accounts and balances will be deleted if they do not pass the KYC verification.
HOW DO I EARN MORE PI?
You can earn more Pi by declaring your security circle and inviting more users to the network which gets you a 25% bonus of your base mining rate for each active miner you invite.
DO I HAVE TO LEAVE THE APP OPEN TO MINE?
No, you don’t have to keep the app open to mine pi. Pi’s consensus is reached from the agreement of many interlocking quorum slices (security circles) to reach a consensus. You don’t need to burn energy or solve any computational puzzle to prove you are trustworthy. Remember, only add people you know and trust to your security circle.
CAN I WITHDRAW PI?
No, you cannot withdraw Pi right now. You can only withdraw Pi when phase three of the project is completed and KYC verifications have been done; this is the mainnet phase. I advise again, use your verifiable details.
IS THIS APP A WALLET? WILL WE HOLD OUR OWN PRIVATE/PUBLIC KEYS? AND CAN WE USE AN EXTERNAL WALLET TO HOLD OUR PI IN THE FUTURE?
Yes, the Pi app will serve as a wallet that will be linked to your phone number/Facebook account. As the case is with any other public blockchain, Pi’s blockchain will also allow in-app/external wallets to hold Pi and transact with it, by submitting transactions to the blockchain directly.
…and it’s a wrap on this guide to Pi network and crypto coin. If you want my candid advice, I’d say you should get some Pi while it’s still easy. A lot of us didn’t know Bitcoin was going to explode as it did, it’s better to try and fail than to always regret not having tried at all. Actually, there’s even nothing to fail at here. Mining Pi right now costs you nothing, and remember that scarcity will set in as time goes by and that will make it more difficult to own. You are not investing anything in Pi, just your contribution to the growth of the network is all that is needed.
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