Pi Network (PI) has caught the attention of cryptocurrency investors before the coin becomes available for trading.
Some users view it as a way to get involved in a cryptocurrency from the ground up and profit in the future, in the same way that some of early bitcoin (BTC) adopters have racked up gains from mining and holding the coin. However, others have likened Pi crypto to a multi-level marketing (MLM) scam that holds no value.
But what is Pi Network and how does it work? Have you heard of the new cryptocurrency and are wondering about the worth of Pi coin as a potential investment?
This article provides an overview of what the Pi Network aims to achieve and how the Pi coin price prediction is taking shape.
What is Pi Network?
Pi Network is a digital currency project that aims to keep cryptocurrency mining accessible as the centralisation of first generation currencies like bitcoin has put them beyond the reach of everyday users. The Pi Network, developed by a team of Stanford graduates, enables users to mine coins using its mobile phone app, validating transactions on a distributed record.
Unlike nodes on networks such as Bitcoin that use proof-of-work (PoW) protocols, Pi nodes use an algorithm based on the Stellar Consensus Protocol (SCP). Pi Nodes validate transactions on a distributed ledger and reach a consensus on the order of new transactions that the ledger records.
Under SCP, PI nodes form security circles, or groups, of three to five trusted people known to each of the networks’ users. Security circles build a global trust network that prevents fraudulent transactions, as transactions can only be validated on the shared ledger if the trusted nodes approve them.
With branding based on the number π, Phase 1 of the project launched in 2019 on Pi Day, 14 March, with a free Pi mining app. By June 2019, the network had more than 100,000 active users. A year later, when Phase 2 launched, there were more than 3.5 million users.
#PiNetwork recently crossed 3.5+ Million Engaged Pioneers. We have a lot to celebrate as a community as we approach Pi Day 2020 and our next phase of development! Keep an eye out for updates over the next couple of weeks. Retweet and mention us for responses from the @PiCoreTeam! pic.twitter.com/FlgBhHIJaz
— Pi Network (@PiCoreTeam) February 26, 2020
The app started running ads in May 2020 to provide a source of financing for the project.
As of 24 September 2021, the user base had climbed to 25 million, up from 14 million in March 2021.
Pi coin, or PI, is the cryptocurrency that runs on the Pi network, and as with other cryptos such as bitcoin, it was designed to undergo regular “halving” to protect its scarcity. Halving is when the number of coins a miner receives for processing new transactions is reduced by half. It usually occurs when a certain milestone is reached.
PI’s mining rate halved from 1.6 π an hour when it reached 100,000 users, halved again to 0.4 π an hour when it reached 1 million and halved again to 0.2 π when it reached 10 million. It will continue to halve, reaching zero at 1 billion users.
Mainnet in a year!
The base mining rate halved when Pi crossed 10 million engaged Pioneers! Your mining rate will adjust with your next sessions.
Halving protects Pi's scarcity. Mine at a higher rate while you can.
Read more about the full plans in Pi app. pic.twitter.com/GXcnLW0oBm
— Pi Network (@PiCoreTeam) December 9, 2020
During the project’s current second phase, users can volunteer to test the Pi Node desktop software on their computer. The Pi Wallet and Pi Browser were released for testing on 1 April 2021. And on 28 June, a Developer Portal, software development kit (SDK) and other resources were released.
When will Phase 3 launch? According to the project’s developers, the start of the third phase has not been set and depends on progress made in the second phase.