Pi Network (crypto): Everything You Need to Know

(Updated 08.09.2022)

You’ve probably heard of rich Bitcoin miners and their million-dollar mining rigs. Probably it feels like you’ve missed the mining boat and that it’s too expensive now. For this reason, a group of Stanford Ph.D.’s launched the Pi Network, which allows you to mine directly from your phone. I’m excited by this prospect and have dived deep into researching everything you need to know about the Pi Network.

The Pi Network aims to be a decentralized smart contract platform that minimizes technical and economic barriers to entry. This allows everyday people to mine, trade, and interact in a peer-to-peer fashion, fueled by the Pi cryptocurrency.

Here’s a short video from their YouTube channel:

Is Pi Network Legit?

It is effortless to get started with the Pi Network. By simply downloading the app and logging in each day, you can ‘mine’ Pi tokens. Once the blockchain and exchange are launched, these can then be sold or swapped for money or other tokens. This is cheap and extremely simple. Ideal for someone starting in crypto!

To support Solberg Invest, you can use “OskarSolberg” as your invitation code and/or use this link to download the app.

However, some do question whether Pi Network is legit:

Firstly, technical questions have been asked regarding the legitimacy of ‘mining’. Miners do not expend energy (as in bitcoin mining) or risk capital (as in proof of stake projects). It is questionable what security the act of mining confers to the network. Additionally, as miners earn rewards for bringing in new participants, some claim the mechanics are simply a pyramid or multi-level marketing scheme.

I believe these views to be misplaced:

It’s true that the ‘mining’ Pi doesn’t meet the typical blockchain criteria. However, it does represent a means of distributing Pi tokens widely, which is an essential component of a block reward program. By rewarding those users who bring in new members, the network also bootstraps its adoption.

To conclude this section:

Yes, Pi Network is legit. Unlike traditional crypto projects like Bitcoin, the mining of Pi is not to secure the network and validate transactions, but to distribute tokens and ramp up adoption. It is not a pyramid scheme, as old miners don’t receive a portion of new miners’ rewards.

What Is The Value Of Pi Network?

The question as to whether the Pi Network is worth anything divides opinions.

On the one hand, as the network is not yet launched, there is no active market for Pi tokens. Clearly, without a market, the price of the tokens is nil. So technically, you could argue that the Pi Network is worthless.

I believe that is a short-sighted and one-sided view. In any good valuation model, one must assess future as well as current prospects.

Right now, millions of people are actively mining Pi and keeping engaged within the community. There is a tremendous amount of excitement and enthusiasm for the project. It is unimaginable to me that once the network marketplace launches, there will not be buyers of the token.

Let’s do an illustrative example to explore the potential of the network:

Ethereum currently has 1.3 million transactions per day and a market cap of $350 billion. This equates to $2,700 per daily transaction.

If we assume the Pi Network, once launched, has just 100k transactions per day and 25% of Ethereum’s per-user value, this equates to a market cap of $68 million!

Clearly, this is hypothetical. But it serves to show if Pi Network can launch, it likely has at least some value.

Given how other new crypto networks have exploded once they gain a user base, the value of the network could be highly significant. The caveat to this is that the future is uncertain. If the exchange never launches or users lose interest, a lot of that potential value will dwindle or disappear.

I guess my answer is this:

Yes, Pi has value. Technically speaking, the price is zero. However, considering the future potential and the huge user base, Pi Network might become a highly valuable project.

Support this website and use “OskarSolberg” as your invitation code.

Does Pi Network Have Potential?

In my opinion, the Pi Network has very significant potential.

Regardless of underlying utility, the greatest driver of token price is awareness and use of the network. We have seen many recent examples of ‘new’ networks launching, and their native token exploded in price.

A notable example is MATIC, the Polygon Network token, whose price history is charted below:

You can see that shortly after the network launched in April 2021, the MATIC price increased 8x. This is because the network got greater visibility, more users, and speculators conflated users with network value.

PS:
Join the free newsletter of Solberg Invest, where you get technical analyses on Bitcoin, Ethereum, Cardano, and others. Also, you’ll get some free guides and reviews. Sign up for free below:

Recent estimates suggest that the Pi Network has between 35 and 50 million miners. As well as meaning 35-50 million holders of Pi tokens, this also suggests excellent brand recognition and public awareness. These are all central drivers of value and speculation if or when the network finally launches.

For context, there are only 157 million Ethereum addresses and 77 million Bitcoin addresses. As individuals often have more than one address, this overstates the actual number of ETH and BTC holders. For a new and unlaunched network, 35-50 million users is therefore extremely promosing.

The network’s potential is therefore hard to deny. In my opinion, the probability of executing on this potential is consequently linked to the likelihood of the network launching correctly. Currently, they have a polished app, a detailed whitepaper, a functioning mining ecosystem, a Pi wallet, and a Pi browser. The network is currently in test mode, meaning developers but not casual users can interact with it.

Mainnet (also known as Phase 3) has begun. They started migrating minder over to the mainnet in July of 2022.

Can Pi Network Make You Rich?

As I alluded to above, the potential of the Pi Network to make you rich is nuanced.

On the one hand, if you are active on the network, it is possible to accumulate Pi tokens quickly. If you have been mining for years, you will likely already have a vast number of tokens in your wallet. The mining distribution rewards early and active users the most. So, if you missed the early mining rewards, you can still make up for it by referring a lot of new users.

If you can accumulate a lot of Pi tokens, you could be greatly rewarded financially. There are currently almost 100 projects with a market cap greater than $1 billion. If Pi Network launches successfully, it is therefore quite conceivable it grows to this level. If you’ve managed to accumulate 0.1% of the total tokens that would net you $1 million!

Of course, not everyone can mine 0.1% of the total. However, the point remains that if the Network launches successfully, current holders can make great financial returns.

It is important to note that this is not a given. Progress towards Phase 3 has been plodding. The Pi Network may never launch or may experience technical errors. If this happens, your Pi tokens will never have an active market and will never realize their potential. However, given the ease and low acquisition cost, I still see Pi mining as a good bet for anyone to make.

Sign up now using “OskarSolberg” as your invitation code to support this website.

Conclusion

The Pi Network is legit and is a great way for newcomers to crypto to gain exposure to high-growth potential coins. With its 20m users, strong brand, and developed support infrastructure, it has enormous potential if it launches successfully. While success is not guaranteed, its low entry costs make it a solid bet.

---