Every so often, we witness the launch of a new cryptocurrency that comes with its hype soldiers. In 2019, a new company made its debut called Pi Network, with claims of it being the new “Bitcoin of 2008”, where users can MINE the cryptocurrency Pi directly from their phones without draining through their batteries and consuming its energy. Many users rushed into it without even knowing what it is or why to use it, but rather for the sole purpose of “Get in before it’s too late” and “It’s free”.
In this article, we’re going to review in a totally unbiased manner what Pi Network REALLY stands for, the timeline of the project, the people behind the project, and if this project is really worth getting into.
Pi Network – Their Bio
Pi Network claims to be the First Digital Currency that can be mined from a regular phone, energy free. That’s the very main purpose of the project. Ultimately, they aim to become the “go-to” platform where people can transact using the Pi coin on the Pi Network.
They claim to have a team of Stanford Ph.D. graduates with extensive valuable knowledge behind the project. They also boast about their app which can be downloaded on both GooglePlay and AppStore, with 10+million users to date.
After downloading the app, you’d have to link your number and Facebook account to your wallet. Every 24 hours, you can enter the app and claim your earned Pi coins effortlessly. You can also boost your earnings by going through the KYC process.
Pi Network – Red Flags & Concerns
While researching and digging deeper into Pi Network, we couldn’t but raise many red flags that usually are not good indicators of any project that is launching. In the following section, we’re going to cite every concern and explain why they might be potential flimflam indicators:
1- Privacy Concerns
It all starts when the user downloads the app (wallet), and the need to verify a phone number and link a Facebook account. You will never face such a process when using any other wallet (not to confuse with opening accounts with exchanges). They also have a KYC step that collects Passport information, which contradicts the development of things on their platform: why make people pass through KYC and submit critical information since there is NO exchange of Pi to USD or to anything else yet? There is NO regulatory body in the world that forces companies to have KYC measures when no money transfer is involved yet.
No other cryptocurrency to date obliges users to do so, in fact, it goes against the very main reason behind cryptocurrencies, which is privacy. Their App also has many permissions on your phone (below screenshots).
2- Questionable infrastructure
There is currently no visibility of any blockchain technology. In normal scenarios, companies would publish their code as open-source for validity, a process that has yet to happen. Their “Whitepaper” is just a business plan still at Draft 1, dated back since the company started in March 2019. HUGE red flag.
Everything is still a theory with no real code in place. The Sandbox on their website is very basic and not mature for a company that started almost 3 years today. There is no proof of work being performed, users just login and click a button, and earn more by referring others. It seems like Pi Network is just using crypto lingo like Mining, Wallet, blockchain…in order to fit into the cryptocurrency sphere.
Another infrastructure concern relies on how PIs are created. Let’s move on to the next red flag, the no-energy-drain dilemma.
3- The No-Energy-Drain Dilemma
In chemistry, there is a famous saying that goes like this: “Nothing is lost, nothing is created, everything is transformed”.
If you want to mine cryptocurrencies, which is basically creating new coins, something needs to push this creation, unless the creation is meaningless and useless. In this case, we notice that the only thing pushing the creation (since no energy is being drained) is the introduction of new people, the fact that makes mining meaningless, and just a push of a button every 24 hours, in a bid to mimic the real mining mechanism for cryptocurrencies.
Why keep users coming back every day? Well, an active user who recruits others and logs into the app daily is much more valuable than a passive offline user, who only downloaded the app ages ago and forgot about it. The latter can’t be monetized as much as fresh info on active users. It also helps create a sense of hype, which is also, a red flag.
4- Newbies and third-world country focus
Most users who are sharing their referral links seem to be cryptocurrency newbies, who don’t understand how real mining works or what cryptocurrencies are really about. They just heard from the media that Bitcoin made money for early adopters, and hope to become millionaires from Pi. Also, here’s a list of the countries where Pi Network is famous:
5- Pushing the “PhD founders” status
We are always at ease when we know that “professionals” are handling a certain project. But what’s been happening with Pi Network is that people are jumping on board solely because of the founders’ credentials. Is that enough? Well, it sounds too familiar.
OneCoin, a previous cryptocurrency project was hyped as well by pushing the main person behind it who was also a PhD person in Business and Economics, “Dr. Ruja Ignatova”. The company was later shut down for running a Ponzi Scheme.
Successful companies tend to speak about their business success rather than shove their founders’ academic credentials in every pitch.
6- Beginnerish Positive Reviews
On both app stores, the app boasts many 5-star reviews, which only talks about how the app “doesn’t drain battery”. Well, we already discussed how this is bad news as it shows that the app isn’t doing anything. If you go and read positive articles, you will definitely end up with a referral link.
All positive reviews are ending in a similar way: “Well you can’t lose anything, why not try it…use my referral code.”
7- No advancements on the Timeline Horizon
The company launched in 2019, and to date, there aren’t any concrete developments in the making other than the below:
- A simple website
- A simple app
- Users referring each other
Heck, even their own users admit that the timeline plan is reaching a certain number of users:
In this case, the only real value of the company is its significant user base, which is being definitely monetized by the creators. It is not uncommon for MLM schemes to grow fast in numbers, which is not a bad thing, but it gets riskier knowing that an already shady project is using MLM for fast growth.
So what’s to lose? Why not give it a try?
If you’re not paying for the product, then you ARE the product. In this day of age, Data is very important and can be sold for hefty returns. Remember the old Facebook-Cambridge Analytica scandal where certain apps were designed on the Facebook platform to gain user information? Well, this presents a similar case where owners can monetize their user base significantly, having access to much-segregated information.
It has been discussed also that at the very start, users were exposed to video ads to help monetize their active user base:
Founders are already benefitting from the app. They launched optional video ads at launch to monetize the active user base. The app also has a KYC process of collecting passport information. Binding this to mobile IDs can be valuable information for the foundersAI Multiple research
Pi Network is far from becoming the next Bitcoin. When Bitcoin was first launched, its code was publicly available showcasing how exactly the blockchain is doing the work. Mining was a logical process, and it never required people to recruit each other (not saying that MLMs are bad). Pi Network’s only positive is that it boasts a large active user base, which is definitely benefiting the creators. When further updates happen, we’ll definitely publish another article and talk about market developments.
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