• Pi Network’s mobile-based mining model enables users worldwide to participate in cryptocurrency mining, democratising access and promoting inclusivity within the DeFi space.
  • Unlike traditional cryptocurrencies, Pi Network employs the SCP to validate transactions, rewarding users for their active involvement in maintaining network integrity.
  • Through its invitation-based system and incentivisation mechanisms, Pi Network fosters a strong sense of community engagement and collaboration.

Pi is a network of tens of millions of humans mining Pi cryptocurrency to use and build the Web3 app ecosystem, led by Stanford University academics Nicolas Kokkalis and Chengdiao Fan. This initiative is changing the landscape of cryptocurrency mining and decentralised finance (DeFi).

What is Pi Network?

Pi Network, established by Nicolas Kokkalis and Chengdiao Fan, both Stanford University academics, in 2018, introduced its whitepaper on 14 March 2019 alongside the launch of the Pi Network app. Utilising the app, users engage in mining for the Pi cryptocurrency by simply pressing a button every 24 hours.

Distinguishing itself from other cryptocurrencies, Pi Network employs its own proprietary mechanism, the Stellar Consensus Protocol, which rewards users for their active participation within the network.

The Pi Network comprises four distinct user categories:

Pioneers: Individuals who mine Pi by tapping the lightning button. As of 5 January 2023, there were over 35 million Pioneers.

Contributors: Users who furnish the network with a list of trusted individuals in exchange for incentives.

Ambassadors: Individuals who introduce new users to the network via their referral code.

Nodes: Participants utilising Pi node software on their personal computers.

Upon its inception, the initial mining rate on the Pi Network stood at 1.6 PI per hour, subsequently reducing to 0.8 PI after reaching 100,000 users. As the user base expanded to one million, the reward further decreased to 0.4 PI per hour, ultimately dropping to 0.2 PI per hour with 10 million users. Mining operations are projected to continue until the network reaches one billion members.

Also read: What’s the best cryptocurrency to invest in?

How does Pi Network work?

At its core, Pi Network operates on a consensus mechanism known as the Stellar Consensus Protocol (SCP). This protocol enables users to validate transactions and reach agreement on the state of the ledger without the need for mining. Instead of competing to solve complex mathematical puzzles, users simply confirm transactions initiated by other members of the network.

Upon joining Pi Network, users are rewarded with Pi tokens for their contributions to the network. These tokens can then be traded or exchanged for goods and services within the Pi ecosystem. Additionally, users have the option to increase their mining rate by forming security circles, groups of trusted individuals who vouch for each other’s authenticity.

Also read: Who invented Web3?

The impact of Pi Network

Pi Network’s mission to bring financial services to the unbanked and underbanked aligns with the inclusive vision of Web3, which seeks to empower individuals by providing access to decentralised financial tools and services. By lowering barriers to entry and promoting financial literacy, Pi Network contributes to greater economic empowerment and inclusion within the Web3 ecosystem.

Pi Network’s mobile-based approach to mining consumes significantly less energy compared to traditional cryptocurrencies, thereby reducing its environmental footprint. By prioritising energy efficiency and sustainability, Pi Network sets a precedent for environmentally conscious blockchain networks within the Web3 landscape.

Pi Network’s focus on community engagement and collaboration embodies its participatory ethos, which emphasises the importance of user-driven governance and collective decision-making. Through its invitation-based system and incentivisation mechanisms, Pi Network fosters a sense of ownership and agency among its users, empowering them to shape the direction of the network and contribute to its growth and development.