Bitcoin had caused significant anxiety and confusion to people when it just became available for investing. This is why it’s only reasonable that people question a newbie on the market.
The Pi network is a new token that has been circulating in the cryptocurrency world and leaving many questioning – what on earth is Pi? Is it a scam? Is it legit?
“Developed by Stanford PHDs, Pi is the first and only digital currency that you can mine on your phone by leveraging your existing social connections.” – is what you see when you land on the cryptocurrency’s website.
Pi is a new social cryptocurrency that claims to be secured and backed by any person out there. It can be easily mined on mobile phones at a low financial cost and subsequently with a light footprint on the plant. This makes Pi seem like a gift from the digital gods: mining consumes a lot of energy and is extremely costly.
The platform has been around for years now. It was launched in March 2019 and had over 100,000 active users. It claims to offer some groundbreaking benefits to its users like simplicity, fair distribution (unlike Bitcoin with its whales, bulls, and other animals), and…. Extra earnings. This point is what reminds so many people of an MLM scheme. Pi is working very hard to make as many people as possible join the network, which will essentially increase the value of the coin over time.
How does the Pi network work?
To start mining Pi, you firstly need to install their app on your mobile phone. The app then connects to nodes and checks whether the transactions are validated on the ledger. It gets the recent block number as well as the has value and then connects to multiple nodes to verify this information.
Currently, Pi is in a test phase and is not actually live yet, so there is no money involved at this staged. The team of Pi is working on improving the coin where possible; once it goes live, then all coins mined by users will go live too.
Currently, Pi is not listed on exchanges and cannot be purchased. The only way to join the network is by receiving an invitation, downloading the app, and letting it mine.
The new BTC?
Pi claims to be a truly decentralized network. The platform claims to offer extra advanced blockchain technology that focuses on security and legitimacy. The cryptocurrency claims that it cannot be modified or altered. Similar to BTC when it was just launched, Pi is very easy to mine. In 2009-2010 you could mine over 50 BTC on your PC by simply running some mining software. But as the value of Bitcoin grew, mining became more complex and is now a luxury only available to mining rigs with sophisticated hardware. Mining rigs require significant power and computational resources; this made it almost impossible for ordinary people to mine coins and get rewarded. This also led to the concept that BTC lost its decentralization since now only 1% of the network controls most of the Bitcoins in the world. Large mining companies like Bitmain have earned billions through this.
Pi uses the Stellar Protocol, which is a consensus algorithm called FBA (Federated Byzantine Agreement). Here, the nodes are not in competition with one another. Instead, each node is responsible for determining whether a transaction is valid or not. The Stellar network was actually launched by the co-founders of Ripple on a website called the ‘Secret Bitcoin Project’. The Stellar Network consists mostly of institutions and corporations as nodes.
At this stage, Pi is a very new project which makes it hard to forecast its future. Bitcoin was born into a doubtful world as most people did not believe in the coin or its success. It expanded through its followers and believers. This could very much happen to Pi, but the question is, why Pi? While BTC was the first of its kind, Pi is by far not a new altcoin on the market. Bit as with every cryptocurrency, only time will tell.