Chapter Twelve - What is The Pi Network? How does it work?
The Pi Network is a new currency being developed by a team of Stanford students in partnership with professors with the mission to give ordinary people a say in the economic world.
It is a cryptocurrency that you can “mine” on your phone as you contribute to the network in multiple ways.
Given the confusing nature of cryptocurrencies, I will try to explain as best I can in super simple terms what this project entails and how it works.
To be a part of the Pi Network, You first need:
-To be above the age of 13
-Have a smart phone
-Have a phone number or Facebook
-Have some sort of identification (ID/DL/Passport) to pass KYC or Know Your Customer
Optional things to have:
-A computer to be an applicant to be a Node/Supernode
-Reliable internet service for your computer
Let’s start with Pi’s structuring:
The way the Pi Network is set up is intriguing to say the least.
Pi Network is currently centralized. Meaning all it’s currency being generated can be traced back to a single place. A center of operations.
Each Pi coin generated by each mobile phone mining it has no value. This is because it is not currently being traded in any marketplace.
The Pi Network team knows and understands this. Therefore to generate Pi coins and establish a user base, they’ve placed an incentive social interactions by creating a 4 tier way of generating coins.
Pioneers are basic users like you and me. They’re labeled this way for their jump into cryptocurrency. They earn .20 Pi/hr.
Contributors are people who legitimize people they’ve added/met. Simply by saying “Hey guys, this is my brother/coworker/friend” this helps legitimize their coins generated. They’re not bots trying to generate Pi. This earns each Contributor 0.04 Pi/hr. The maximum being 5 members, you earn an additional .20 Pi/Hr.
Ambassadors are people who invite new members into the Network. This is where the Pi really stacks up, something that the Pi creators want to place a heavy incentive on. The amount you earn increases based on each new member, so to keep things simple I won’t detail it here.
Nodes/Supernodes are currently not implemented at this stage of the project. Nodes create basically receipts for transactions that will occur between two parties. Supernodes will simply legitimize those transactions for a small transaction fee.
It is clear that in order for something to be valuable, a lot of people need to use it. But how will those people even start using it?
The Pi Network team is developing a Marketplace of sorts. Here people will be able to sell and advertise goods and services for Pi Currency.
Some example of items bought and sold can be found here: Lessons from Pi's first transactions
If you didn’t check out the video, some of the items bought and sold were bicycles and even a computer. These things sold for a small amount of Pi, which can be easily generated in a couple weeks.
Some of the other usages Pi coins have are:
-Marketplace currency
-Cryptocurrency trade for national currency
-Highly versatile as Pi’s community grows (Thanks to ambassadors)
-Organizations use currency to provide an incentive to the entire Pi Network for social cohesion
The possibilities are endless. With user base of more than a million users from all over the world with easy access to the network in a couple taps, the possibilities are endless.
Unfortunately, the mining of Pi will halve as the community grows. When it reaches it’s final stage, Mining Pi will be done only by a limited few to prevent oversupply and devaluation of Pi.
Pi Coin Supply
I hope that thus far everything has been as simple and understandable as I could put it.
The current Pi Coin supply is just a counter. It’s just a number with no monetary or itemized value.
From what I’ve gathered, this is to prevent bad actors from taking advantage of the system if the project were to have had launched straight into the real world.
However, once the Pi team has personally selected each person and done a proper KYC on them, any account who is not properly identified as a human being will lose their account and the falsely earned Pi Coins.
Based on the things I’ve read from fellow Pi Users, this is expected to cut the supply by 10-20%. We won’t know however until the project goes live.
When this happens, all legitimate users will be able to keep their accrued Pi Coins, thanks to the process of KYC (Know Your Customer).
KYC is a third party service that identifies you and well it makes sure you are who you say you are.
Similar to a store asking for creditors to see what your identity looks like economically.
The Pi Network app runs in-app ads. What for?
KYC is not a free service. Additionally, running the test server which simulates the Pi Network and hosting everyone’s usage costs money and resources.
In-app ads help cover some of those costs, helping facilitate the process from testing phase to live phase as the creators have better tools to work with.
In-app ads can also be removed, in case you find them intrusive or annoying.
Pi Network’s Decentralization
Ultimately, the creators of Pi wish for this to be a cryptocurrency widely accessible by people and for the people.
When the project goes live on the main net, The creators will no longer be able to have a hand in the way Pi Network is structured. The hope is for a democratic system of Nodes and Supernodes to shape the way the cryptocurrency works.
With this in mind, each Node/Supernode will becomes a host for the Pi Network. Instead of the Pi Network being kept in a single location, it will be hosted by millions of computers across the ENTIRE world.
Furthermore making it even more accessible and reliable from any typical smartphone with the Pi Network app.
Legitimacy and is it feasable?
Thanks to the regular videos that the creators upload as well as their Stanford University background and their affiliation with the creators of the Stellar Census Protocol (Already known for it’s own cryptocurrency), it is easy to trust in the vision of the creators.
By seeing Pi Network borrow the best qualities of other crytocurrencies, I can see that the extensive testing and dedication of the Pi Network team will come to fruition.
If this project interests you, feel free to check out their White Paper which details and describes everything I’ve outlined above with all it’s technical terms.
REMEMBER
I’ve simply outlined the very fundamentals of what is The Pi Network for those people who are interested or are just getting into this. I hope this helps people understand just a little bit better what the whole project is about.
Even though Pi Coins are worth nothing, it’s worth remembering that it’s economic impact could potentially be substantial. It never hurts to log in once a day just to tap a button and generate Pi Coins. These same coins could be used for other goods and services some day.
If you’d like to be a part of my mining team, join me!
On your mobile device simply type https://minepi.com/Rodrigov600
Use my username Rodrigov600 as the invitation code when prompted, together we can be at a better standing in the network.
If you think this article could benefit someone on the fence or someone unclear about how the Pi Network functions, absolutely share this with them!
