Lack of transparency about blockchain, limited information about the team behind it, while the "fanatical" community makes the Pi Network project cause mixed reactions.
After 6 years of waiting, the Pi Network team announced "opening the network", which means allowing players to trade Pi coins outside the market. However, since its inception, this project has caused a lot of controversy, while not being highly appreciated in terms of technology.
The Roadmap
Pi Network was launched on Pi Day, March 14, 2019, by Nicolas Kokkalis, Chengdiao Fan, and Vince McPhillip, with McPhillip leaving the project due to disagreements. The first version of the mobile app allowed users, called Pioneers, to “mine” Pi directly from their smartphones.
A year later, Pi Network entered its testnet phase, marking a major step towards decentralization, enabling the deployment of distributed nodes around the world, testing the blockchain, and creating utility using Test-Pi. Later that year, the project launched the Pi Node feature to run network nodes on personal computers.
In December 2021, Pi Network launched a "closed mainnet", allowing players to trade Pi coins internally with each other. In the middle of last year, the project scheduled an "open mainnet" and expected to "open the network" on February 20.
According to the announcement of Pi Core Team (PCT), the team behind Pi Network, the project had 60 million users in the middle of last year. In the latest announcement, there were 10.14 million mainnet migrations, surpassing the initial target of 10 million. The project also has more than 19 million people who have verified their identity (KYC).
On social media, Pi Network has attracted a lot of attention, with 111,000 followers on Reddit, 2.9 million on Telegram, 3.5 million on Twitter, and 1.65 million on YouTube.
Not Quite Blockchain Yet
Except for those who operate Nodes, for most Pi players, the only task is to log in to the phone, "trigger the lightning" and wait 24 hours to repeat. They call this action "mining".
“We define ‘mining’ more broadly than the traditional meaning, which is implementing a proof-of-work consensus algorithm like in Bitcoin or Ethereum,” the Pi Network whitepaper states. However, the term appears to be redefined by Pi Network to serve its own purposes.
When it comes to cryptocurrencies, mining means validating transactions and securing the network. For Bitcoin, it means solving complex mathematical puzzles and receiving rewards through a resource-intensive system of machines. Pi Network falls short in this regard.
Pi implements Stellar's Federated Byzantine Agreement consensus mechanism, by exchanging computing power among groups based on trust, rather than computational effort. When enough trusted nodes agree, the transaction is confirmed. This "trust" is controlled by the Stellar Development Foundation.
Unlike Bitcoin and many other cryptocurrencies, where economic incentives motivate miners and validators to act properly, Stellar relies on the goodwill of participants. Pi Network also lacks transparency by allowing players to invite others to join with minimal oversight.
“What happens if the foundation of trust fails?” CCN asked. “Imagine a scenario where bad actors infiltrate the network, bail each other out, and spread without limit. What are the consequences? Virtually no penalties.”
In fact, Pi's blockchain network is not yet fully decentralized like many other cryptocurrency projects. Active mainnet nodes are controlled by the Pi Network. "All active mainnet nodes are exclusively managed by the Pi core team, contrary to the team's claims of decentralization," CoinTelegraph quoted a blockchain expert as saying. "While the project promises decentralization, its current structure raises doubts about the Pi Core Team's commitment to this principle."
The issue of not having a smart contract after 6 years, even when the network is about to be "opened", also makes many people skeptical about the project. Blockchain expert Nguyen Viet Dinh commented on Facebook that Stellar Core has deployed smart contracts from version 20 onwards, but Pi Network is still using version 19.1. "Maybe they will upgrade to the latest version 22.1 in the near future," he predicted.
According to experts, the participation of millions of people in Pi Network is a strange case, because the question is: What motivates users to invest their time and resources in a network that is not yet fully decentralized.
“It all comes down to the mining illusion,” Crypto Potato commented. “By incentivizing one tap per day, Pi Network creates the illusion of participation. However, this action does not authenticate transactions and secure the network, it is just a ploy to maintain user interest.”
Lack of Transparency
According to CCN, Pi Network has attracted attention thanks to its introduction of helping users mine cryptocurrencies without consuming a lot of energy, technical expertise or expensive equipment. "But is Pi Network a real opportunity or a cleverly disguised pie?", the site commented.
First, the site questions the 60 million user figure announced by PCT. Third-party blockchain checkers like ExplorePi determined that the project had around 10 million wallets on the Pi network as of mid-February, while Pi Door counted 6.15 million wallets as of October 2024. That means the number of wallets owned by users represents less than 15% of the total number of users. Additionally, only around 20,000 wallets show daily activity, suggesting a significant gap between reported and actual engagement.
“To complete the KYC process, players must have a Pi wallet,” CCN said. “We wonder if the millions of other players are real or fake. Is the project being overhyped?”
“In the cryptocurrency world, discrepancies in user statistics can seriously impact perceived legitimacy,” the OneSafe site similarly opined. “Lack of honesty can erode trust, making potential users wary.”
On the KYC front, CoinTelegraph reported that the project’s mandatory KYC process raises significant privacy concerns, as users are required to submit sensitive personal data including selfie videos and government-issued identification. The data is processed by regional validators or players themselves who register as validators, increasing the risk of misuse or identity theft.
Previously, experts warned that Pi completely lacked the transparency of a blockchain project when there was very little information about the team behind it. The smartphone application alone required a lot of access to the user's contacts. In addition, if the money was only stored on the phone or a centralized server, the administrator could change and create as much money as he wanted.
"Addictive"
In Atomic Habits, author James Clear explains that habits are formed through small actions repeated consistently over time. This is demonstrated by the Pi Network "roll call". The task seems simple: click the "lightning" button and receive a small amount of Pi, almost effortless.
But over time, this action becomes a daily habit. For many, stopping logging into Pi every day is like admitting that all previous efforts have been in vain. "The app traps users in its own trap," according to OneSafe. "Pi incorporates a social element by allowing users to invite friends and build networks, thereby tapping into the basic human need for social validation."
What makes it difficult to leave Pi is the hope that the token "will one day have real value". Meanwhile, Pi Network's "invite" model is considered a form of Ponzi, where the more players they invite, the higher the amount of Pi they receive, urging them to find ways to attract new people.
In fact, Pi Network has created a fanatical community. As seen on Facebook groups with hundreds of thousands of members or X accounts, issuing conflicting warnings about the project is often immediately criticized.
"Pi Network seems to have created a new 'cult' after many years," said Le Binh, who has been active in the cryptocurrency market for more than 6 years. "They are willing to attack and criticize those who disagree with their opinions, even if those opinions are correct."
Price Controversy
In the Pi Network community, many people believe that the price of this virtual currency will be very high. Many people call for setting a "consensus price" for each Pi from 500 to 1,000 USD and request "no devaluation". There is even a community that has formed the so-called GCV (Global Consensus Value) of Pi at 314,159 USD and strongly defends this point of view.
However, according to OneSafe, this is an "unimaginable" number. PCT announced that the maximum total supply is 100 billion Pi. Meanwhile, the initial supply is estimated to be about 6 billion Pi released to the market after the network opens. According to CoinTelegraph, as of January, the circulating supply reached 5.56 billion tokens.
"If Pi is as valuable as the community expects, its market capitalization will be at an unbelievable level, without any real basis or market data to prove it," commented Nam Nguyen, who has been involved in the cryptocurrency market for 4 years.
According to Mr. Nguyen, the Pi Network community's self-valuation of Pi and its "optimism" makes others feel unreasonable. The arguments started from there.
“There has been so much hype about Pi Coin and Pi Network since its launch. This project only survives on its hype by exploiting the emotions of investors, just like Hamster Kombat,” Crypto Times commented. “However, over time, people will reality check whether Pi is a long-term racehorse or not.”