The cryptocurrency market is still quite new, and there is a lot of room for improvement and innovation. And because it’s new and it involves large sums of money, the crypto market is kind of a wild west.
Many have tried and failed to recreate a new and improved Bitcoin. Some people came up with new concepts, but they didn’t seem to get anywhere near the success of Bitcoin and Ethereum.
And truth be told, the more innovative, the more complicated the cryptocurrency matter gets.
Therefore, a team of Standford PhDs tackled the challenge of creating PI, a user-friendly inclusive currency that could see worldwide massive adoption. And to do so, they made use of the Stellar Consensus Protocol, another concept born at Stanford University.
What is Pi?
Well, Pi is 3.14159265359 and is a mathematical constant. But that’s not what we’re here for.
We’re here to talk about the Pi Network. Pi Network is a cryptocurrency project developed by Standford PhDs and graduates — Nicolas Kokkalis, Chengdiao Fan, and Vince McPhillip, designed to run on mobile phones.
The goal is to create a blockchain that works with the Stellar Consensus Protocol (SCP) to make it as resource-efficient and user-friendly as possible by employing a “security circles” system.
It all started on March 14th, 2019 (the official Pi Day), when the developers launched their mobile app. They marketed it as a free, battery-friendly mobile mining app that you only have to access once a day for it to continue mining for you on its own. The mining rate started at 3.1 Pi/h and halved every time the number of users grew over a certain number.
And to add up to the mining rate, each user could refer to other people in order to get a bonus.
The community grew larger and larger, and by October 2022, the app has already got over 35 million engaged members with a 0.0147 Pi/h base rate.
“Over 35 million people making free loads of money in one year? That’s amazing!”
Yes, it is, but that’s not actually what happens. Inside the white paper, we can see that the Pi network project has three stages: beta, testnet, and mainnet.
Currently, it is in the testnet stage, and the app is still a virtual representation used to engage the pioneers.
The testnet stage of pi started in March 2020. Since then, the developing team kept testing the various possibilities for Pi Nodes, KYC, monetization through ad placement, and, recently, a Pi Wallet.
As for the Pi mining, “the mining” is not actually mining as it’s understood in the crypto market. What we commonly understand as mining doesn’t even work in an SCP.
“So, is it fake or a scam?”
Neither! It’s a project in a testnet state that’s using common terms to hook people in. So, in order to answer the question “is Pi Network legit?”, we first need to understand how it works.
After analyzing the white paper and taking a deeper look at this project, we can understand why the Pi Network’s project was designed and advertised as it is.
- The project’s goal is mass adoption and is targeted to a large audience. And because most people heard of Bitcoin, it was essential to compare and point out Bitcoin’s faults and Pi’s advantages.
- Mass adoption has to go hand in hand with wide distribution. Through the app, the Pi token is distributing pre-minted tokens to its user base. It is most likely called “mining” because the term is easier to understand.
- Building a blockchain from the ground is no easy task, and most projects end up hacked because of weak network security. Through SCP, the network’s security improves greatly. However, as Stellar Consensus Protocol is quite a complicated thing to understand (as we’ll see below), they only emphasized the security circles system, which is incentivized.
- Pi also states it’s the “first digital currency you can mine on your phone.” But actually, Monero was the first with the Minergate app. And even if there were others before, they did drain the battery and used more data. But as the Pi network’s app simulates a faucet, you don’t even have to be connected to the internet as long as you check in once every 24 hours.
The use of buzzwords to gather a vast community is essential to how the Pi cryptocurrency is thought out and the Byzantine Fault Tolerant System it employs, as we will see.
The Pi cryptocurrency
“So far, so good, but how much does the Pi cryptocurrency value?”
The answer is simple> ABSOLUTELY NOTHING! Or better said nothing yet.
So next time you hear or see someone trying to sell them at any value, you should report him as a scammer.
The Pi cryptocurrency will eventually be launched on the mainnet and will gain value. The change is believed to take place in December 2022. It will be traded on exchanges, used inside the Pi network’s social media environment (advertising & marketplace), eventually used to pay for goods and services outside Pi’s environment.
The developers made clear about Pi’s value because it should not reach huge values (such as Bitcoin), so people will be more inclined to use it as a unit of exchange than a store of value.
Of course, people will be able to earn Pi even after the project airs by:
- “Mining” a fixed supply minted per person;
- Referral;
Stellar Consensus Protocol
Generally, a blockchain works as a decentralized digital ledger sustained through a distributed network of computers. In a distributed system, the participants of a cryptocurrency network need to regularly achieve consensus safely and efficiently.
However, reaching consensus is quite difficult, especially when some of the nodes are likely to fail or act dishonestly. But through the Byzantine Fault Tolerant System, a blockchain can continue operating even when some nodes fail to communicate.
Sidenote. Byzantine Fault Tolerance (BFT) is the property of a system to resist the types of failures that come from nodes failing to communicate or act maliciously and continue to operate as long as there is a majority of nodes in agreement.
Bitcoin’s proof of work system has proven to be one of the most secure implementations of BFT for blockchain. But the complex cryptographic puzzles employed by Bitcoin’s PoW turned the network rather slow and inefficient from an energy consumption point of view.
Therefore, many other projects implemented protocols with derived BFT to create improved networks based on voting, that are faster and cheaper. However, they come up with several disadvantages like a higher risk for accidental forks, centralization, and the appearance of powerful whales.
Federated Byzantine Agreement Protocol
In 2015 Professor Mazières from Stanford introduced an alternative to the Byzantine Fault Tolerance called The Federated Byzantine Agreement. The concept is based on quorums that achieve consensus, employing overlapped quorum slices formed by validators.
The Stellar Consensus Protocol is the first general FBA protocol that gives an open membership system. So, how does Stellar’s Consensus Protocol work?
In SCP, each validator decides which validators they trust to form a quorum slice. Therefore, there is no need for a central authority to decide on a validator’s list.
In a distributed asynchronous system, a consensus mechanism must prefer two of the following three properties:
- Fault-tolerance – the ability of a system to survive the failure of a validator;
- Liveness – a system’s ability to always close a ledger, even if it causes a fork;
- Safety – the ability of a system to prevent an error from entering its ledger, eventually stopping its progress.
The SCP version of the Federated Byzantine Agreement prefers fault tolerance and safety. Also, there is no mining process. There is only a 3-5 second voting process where messages pass around to reach consensus. And because of the safety preference over liveness, there is no risk of a fork to make you wait for a few ledgers, so a transaction is permanent from the first time it reaches consensus.
Federated Byzantine Agreement is asymptotically secure concerning the security of the network since applying computing power to sabotage consensus is impossible. And even if there remains the possibility of bad actors colluding, it is virtually impossible for them to form a majority because the network is formed of a complex web of overlapping quorum slices.
What will Mining Pi cryptocurrency actually mean?
When Pi network’s developers proposed an all-inclusive mining system, they actually intended to allow individual devices contribute to the protocol level and get rewarded. That includes mobile phones, laptops, and computers.
The users will “mine Pi” by confirming the legitimacy of each and every activity on the network in quorums.
And after understanding how SCP works, we now can say that Pi’s mining system is about trustworthiness more than anything else:
- The Pioneers must confirm on a daily basis that they are not robots;
- The Contributor is confirming a list of pioneers that he knows and trusts;
- The Ambassador adds new users to the network;
- The Node is a user that is running the software on their desktop or laptop computer and runs the core algorithm.
All the above roles are necessary to the network, and a user can play one, more, or all of them.
The newly minted Pi cryptocurrency is distributed daily as long as the user participated and contributed during that 24-hour interval.
In what stage is Pi Network?
The Pi network project is in its second phase, the Testnet stage. However, the app is still a simulation of a faucet.
The Testnet stage started on the Pi Day in March 2020, with the Node software being deployed on 31 March.
In November 2022, the project stands over 35M users and already started testing nodes, the peer-to-peer transfer systems, versions of a KYC, and recently a wallet.
The current “mining” base rate is at 0.0147 Pi/h, and it will halve again when it reaches 100M users.
When will Pi Network air?
In December 2020, Nicolas Kokkalis announced inside the Pi Network’s App that they are setting the roadmap to mainnet in a year. Therefore, everyone expected Pi to go live in December 2021 or early 2022. However, the process got delayed, and at the time of writing, users believe that Pi will go live at the end of 2022.
At that point, all validated accounts will be transferred to the main network, and the faucet from the beta test will be shut down.
Also, fake users and duplicated accounts will be discarded from the network.
At the moment, Pi holders can move their assets in the Pi wallet and wait for the KYC to be approved, so that they have everything prepared when the transition to the mainnet will take place.
Future Developments
The first event that is going to throw a tantrum into the Pi Network’s community will be “the purge” that will take place while switching to the mainnet. The Federated Byzantine Agreement concept applied in its consensus protocol will require this transition to be done with maximum diligence.
Inevitably, users that have held multiple accounts will not be happy about it.
Pi’s Attention Marketplace, Barter Marketplace, and Decentralized App Store will redefine how a cryptocurrency community interacts. The network will offer its users a way to barter their attention to advertisers that want to show ads into the community and a place where they can offer or look for products and services paid for in Pi cryptocurrency.
Furthermore, developers will also be able to build Dapps leveraging Pi’s existing infrastructure and the community’s shared resources.
Key takeaways
- Pi Network is a cryptocurrency project developed by Standford PhDs and graduates Nicolas Kokkalis, Chengdiao Fan, and Vince McPhillip, designed to run on mobile phones.
- The project is currently in the testnet phase, and the app is only a simulation of a faucet. The Pi token holds no value at the moment and cannot be traded on exchanges.
- The Pi Network is built on top of the Stellar Consensus Protocol. The SCP is a system that works based on quorums that achieve consensus, employing overlapped quorum slices formed by validators.
- In order to build an inclusive and functional network, every role is built around producing trustworthiness.
- Since March 2020, Pi’s testnet phase started running, officially deploying the Node software on March 31st.
- Pi will probably reach the mainnet stage in December 2022.
* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
Source: https://coindoo.com/pi-network-the-mobile-social-cryptocurrency/