Pi Network Coin Worth Nothing? Think Again

Pi Network’s KYC process has successfully verified just 12 million of its reported 60 million users. Despite the inflation of Pi’s tokens doubling, a significant portion of coins remains locked, which limits the circulating supply. The network, which is built on Stellar, is progressing slowly but is prioritizing scalability and security in its development.

While Pi Network claims to have over 60 million users, recent data raises concerns about this figure. Blockchain explorers like ExplorePi and Pi Door indicate that only 6.2 million wallets exist. This discrepancy between the number of reported users and actual wallets has led to skepticism. Nevertheless, Pi Network is still undergoing its migration phase, with many users awaiting the completion of their KYC process, a crucial step for transitioning from Testnet to Mainnet.

The KYC process in Pi Network is designed to verify that users are genuine individuals, not bots. Without completing KYC, users are unable to fully participate in the ecosystem. Currently, only 12 million users have passed this verification, which explains the discrepancy in wallet counts. Many users may still be in the transition phase, awaiting confirmation to join the Mainnet.

Pi Network boasts an active community, with 3.3 million followers on X and 1.5 million on YouTube, indicating strong user engagement. While these figures lend some support to Pi’s claims, more activity on the Mainnet will provide clearer insights into user participation.

Pi Supply and Inflation: Current Trends

Inflation is a concern raised by critics regarding Pi’s token supply, which more than doubled by September 2024. This rapid increase has led some to worry about the long-term value of Pi coins. Despite these concerns, many tokens remain locked, which may help stabilize the effects of inflation.

As of August 2023, approximately 1.29 billion Pi coins were locked by users, reducing the available supply and balancing inflationary pressures. Although Pi’s inflation rate is currently higher than that of established cryptocurrencies like Bitcoin (which has a yearly inflation rate of 0.8%), Pi is still in its developmental phase. As the network matures and the Mainnet progresses, the inflation rate may become more stable.

Comparing Pi to more mature cryptocurrencies like Bitcoin or Ethereum may not offer a complete perspective, as Pi Network is still evolving. The true effects of its increasing supply will become clearer as the ecosystem grows.

Pi Mining: More Than Just Screen Tapping

Some critics dismiss Pi mining as merely screen tapping. However, Pi’s mining model is based on Stellar’s Federated Byzantine Agreement (FBA), allowing users to participate without the need for expensive hardware, unlike traditional mining systems such as Bitcoin’s Proof of Work (PoW).

In Pi Network, users earn Pi coins by daily interactions with the app, emphasizing accessibility and making cryptocurrency engagement easy for anyone with a smartphone. While it diverges from conventional mining practices, Pi Network aims to develop a decentralized network over time. As more users join and validate transactions, the network’s capabilities will expand.

Validation in Pi’s system is primarily conducted by Pi Nodes, where users run node software to help verify transactions. Meanwhile, other participants, known as Pioneers, contribute by engaging with the app daily, creating a broader network of contributors.

The KYC Process and Data Collection

The KYC process in Pi Network requires users to submit personal information, including ID documents and selfie videos. Critics have raised concerns about the extent of this data collection; however, KYC procedures are common in many cryptocurrency platforms. They serve to ensure regulatory compliance and help mitigate fraud.

Many prominent cryptocurrency exchanges, such as Binance and Coinbase, also implement KYC processes. Pi Network’s strategy focuses on establishing a verified user base to prevent bots and fraudulent accounts from infiltrating the network, which is essential for fostering a secure and trustworthy blockchain environment.

Pi Network’s Development Timeline: Gradual Progress

Pi Network has faced criticism regarding its pace of development, as the Mainnet launch remains unfinished after five years. However, it’s important to note that other projects have also taken years to develop. For example, Cosmos required five years to create its Inter-Blockchain Communication Protocol.

The slower timeline of Pi Network may be attributed to its distinctive approach. Unlike projects like Dogecoin, which launched rapidly, the Pi team emphasizes building a secure and scalable platform. As a fork of Stellar, the development process involves necessary adjustments to ensure scalability and facilitate mass adoption.

Although the slow rollout has left some users feeling frustrated, it enables thorough testing and a smooth user migration process. This gradual transition to the Mainnet is designed to ensure that the network is both secure and reliable when it becomes fully operational.

Instead of emphasizing Pi’s perceived shortcomings, it’s important to acknowledge the unique advantages it offers: accessibility, phased development, and a careful move toward decentralization. Labeling Pi as “worthless” overlooks the potential opportunities it may create in the future, making it a project worth monitoring closely.