Introduction

Pi Network is a blockchain-based project that enables users to mine cryptocurrency through a mobile application without requiring extensive computational power. Launched in 2019 by Dr. Nicolas Kokkalis and Dr. Chengdiao Fan, the project aims to create an accessible and inclusive digital currency ecosystem. Unlike traditional cryptocurrencies that rely on energy-intensive mining, Pi Network uses the Stellar Consensus Protocol (SCP), allowing users to validate transactions through a trust-based mechanism. The network has grown to over 45 million users and is progressing toward its open mainnet phase, which will expand interoperability and real-world applications for the Pi cryptocurrency.

What is Pi Network (PI)?

Pi Network is a cryptocurrency project that enables users to mine Pi, the native digital currency, directly from their mobile devices. Launched on March 14, 2019, by a team of Stanford graduates, including Dr. Nicolas Kokkalis and Dr. Chengdiao Fan, the project aims to make cryptocurrency mining accessible to a broader audience. Unlike traditional cryptocurrencies that require significant computational power, Pi Network allows users to mine Pi coins through a mobile application without draining device resources.

The network uses the Stellar Consensus Protocol (SCP) as its consensus mechanism. SCP enables efficient and low-latency transactions by utilizing a federated Byzantine agreement system. In this model, nodes, referred to as “Pioneers,” form security circles by adding trusted members, creating a global trust graph that secures the network. This approach reduces the energy consumption typically associated with Proof-of-Work (PoW) mining algorithms.

Pi Network’s development roadmap consists of multiple phases. Phase I, initiated in December 2018, involved the release of the mobile app as an alpha prototype to onboard initial users. Phase II commenced on March 14, 2020, introducing a live Testnet with distributed nodes worldwide, facilitating decentralized application development using Test-Pi tokens. Phase III, the Enclosed Mainnet, began in December 2021, allowing users to complete Know Your Customer (KYC) verification and migrate their Pi to the live Mainnet blockchain. The Open Mainnet phase, launched on February 20, 2025, removed the firewall, enabling external connectivity to other networks and wallets.

As of February 2025, Pi Network has reportedly amassed over 70 million users worldwide. The Pi cryptocurrency became tradable following the Open Mainnet launch, with its value experiencing significant fluctuations. Initially trading above $1, the price of Pi coin has seen both sharp declines and rebounds, reflecting market volatility. The project’s unique approach to mobile mining and its emphasis on accessibility have contributed to its rapid user base expansion.

Despite its growth, Pi Network has faced criticism regarding transparency and centralization. Concerns have been raised about the anonymity of the development team and the lack of publicly available source code, which prevents external verification of the blockchain’s integrity. Also, the project’s reliance on a referral-based growth system has drawn comparisons to pyramid schemes, as users are incentivized to recruit new members to earn Pi tokens. Security concerns have also been highlighted, particularly regarding the handling of user data during the KYC process and the centralized control over the ecosystem.

Pi Network Main Features

Mobile Mining

Pi Network allows users, referred to as Pioneers, to mine Pi coins directly from their smartphones without significant energy consumption. The Pi Mining app, available on iOS and Android, serves as the primary interface for users to engage with the network. By checking in daily, users can mine Pi, manage their balances, and build Security Circles to enhance network security. The app also provides access to network announcements and community forums, facilitating user engagement and education. The network has grown to over 55 million engaged Pioneers.

Pi Network’s Mainnet Blockchain

Transitioning from its initial phase, Pi Network launched its Mainnet blockchain, enabling Pioneers to migrate their mined Pi from the mobile app to the Mainnet. This migration allows users to use Pi within the network’s ecosystem for transactions and services. The Mainnet operates within an Enclosed Network period, focusing on mass KYC verification and ecosystem development. The Open Network launch is scheduled for February 20, 2025, enabling external connectivity and broader utility for Pi.

Developer Ecosystem

Pi Network fosters a developer-friendly environment, encouraging the creation of decentralized applications (dApps) on its platform. Developers have access to a user base exceeding 60 million Pioneers, offering a substantial audience for their applications. The platform provides tools and resources to facilitate dApp development, including integration with the Pi Browser and support for various programming languages.

Know Your Customer (KYC) Process

Pi Network implements a KYC process to maintain network integrity and ensure that participants are genuine individuals. This verification is essential for Pioneers to migrate their Pi to the Mainnet and engage fully with the ecosystem. Over 18 million Pioneers have completed KYC verification, with more than 8 million having migrated to the Mainnet.

Pi Nodes and Decentralization

Pi Network emphasizes decentralization through its node system. Pioneers can run Pi Nodes on personal computers, contributing to transaction validation and network security. These nodes operate using the Stellar Consensus Protocol (SCP), forming trusted groups to achieve consensus on transaction records.

Ecosystem Utilities

Beyond cryptocurrency mining, Pi Network is committed to building a comprehensive ecosystem of utilities. This includes the development of dApps that offer real-world applications for Pi, such as marketplaces, social platforms, and financial services.

Social Engagement

Recognizing the importance of community, Pi Network integrates social features to foster interaction among Pioneers. Introducing Pi Social Profiles allows users to personalize their presence within the network, connect with others, and showcase their activities across various Pi applications.

Open Network Transition

The upcoming transition to Open Network on February 20, 2025, marks a significant milestone for Pi Network. This phase will remove the existing firewall, enabling external connectivity and allowing Pi to interface with other compliant networks and systems.

Pi Hackaton

Pi Network organizes the Pi Hackathon, an ongoing initiative to promote the development of applications within its ecosystem. This event provides developers with opportunities to create applications that enhance the utility of the Pi cryptocurrency and engage the community.

Structure and Participation

The Pi Hackathon operates on a monthly cycle, allowing developers to submit their applications through the Brainstorm app. This platform enables projects to be reviewed by the extensive Pi community, which consists of tens of millions of members. Winning projects in a given month receive increased visibility and a prize of 10,000 Pi. All submissions are considered for additional support and resources from the Pi Main Team, and strong applications may be listed on the Testnet Ecosystem within the Pi Browser.

Themes and Objectives

Each Pi Hackathon focuses on specific themes to address various aspects of the Pi ecosystem. For example, the 2024 Pi Commerce Hackathon aimed to develop applications that connect local Pi businesses with Pioneers, facilitating real-world transactions using Pi. This theme was chosen in response to community events like PiFest, which highlighted the demand for platforms enabling Pi-based commerce.

Resources and Support

To assist developers, Pi Network provides a range of resources, including:

• Developer Onboarding Guide: Outlines steps for new developers to integrate into the Pi ecosystem.
• Pi Platform GitHub Repository: Contains documentation for integrating the Pi SDK and APIs.
• Pi Demo App Repository: Offers sample application code as a reference for developers.
• Pi Open Source License (PiOS): Details the open-source license for Pi-related software.
• Workshops: Includes presentations on using the Pi SDK and product design guidelines for Pi apps.

Notable Hackathon Outcomes

The Pi Hackathon has led to the creation of various applications that contribute to the Pi ecosystem. For instance:

• Map of Pi: A platform that helps Pioneers locate businesses accepting Pi as payment.
• PyNook: Provides merchants with user-friendly storefronts to facilitate Pi transactions.
• Daabia Mall: A marketplace app offering a variety of goods, enhancing regional representation within the Pi ecosystem.

Developer Engagement

Developers interested in participating in the Pi Hackathon can begin by downloading the Pi App and creating an account. The Brainstorm app within the Pi Browser serves as the central hub for hackathon activities, including project submissions and team collaborations.

Pi Network vs. Competitors

Pi Network’s approach to cryptocurrency mining through mobile devices makes it unique, but it faces competition from other projects focusing on accessibility, energy efficiency, and decentralized finance. Below is a comparison between Pi Network and some of its closest competitors: Bee Network, Electroneum, and Chia.

Pi Network vs. Bee Network

Pi Network and Bee Network share a similar model of mobile mining, allowing users to earn tokens by engaging with their respective apps daily. Both projects rely on community-driven growth, where users invite others to expand the network. However, Pi Network is further along in its development, having launched its enclosed mainnet and begun KYC verification, whereas Bee Network remains in a pre-mainnet phase without a clear transition timeline.

Another key difference is governance. Pi Network is gradually introducing governance mechanisms, although centralization concerns persist. Bee Network, on the other hand, has not provided concrete details on how it plans to decentralize its decision-making. Pi Network has begun integrating decentralized applications (dApps) into its ecosystem, while Bee Network lacks a functioning ecosystem for real-world transactions.

Pi Network vs. Electroneum

Electroneum focuses on financial inclusion by offering mobile-friendly cryptocurrency services, particularly in emerging markets. Unlike Pi Network, Electroneum already has a live blockchain with an active payment system, enabling users to transact using ETN for goods and services. Pi Network, in contrast, is still in its enclosed mainnet phase, restricting external transactions.

While Pi Network relies on a trust-based mining model through the Stellar Consensus Protocol (SCP), Electroneum initially used a Proof-of-Work (PoW) model before switching to a modified Proof-of-Responsibility (PoR). PoR allows authorized validators to mine ETN efficiently while reducing energy consumption.

Pi Network vs. Chia

Chia Network employs a unique Proof-of-Space and Time (PoST) consensus mechanism, requiring users to allocate hard drive space to validate transactions. This differs significantly from Pi Network’s mobile mining approach, which does not require hardware resources beyond a smartphone. While Chia markets itself as an eco-friendly alternative to Proof-of-Work cryptocurrencies, its mining process still requires substantial storage capacity, leading to high hardware costs. Pi Network eliminates this barrier, making its mining process more accessible to the average user.

Chia has a fully functional mainnet with a liquid market for its native XCH token, whereas Pi Network remains in an enclosed phase, limiting external trading. Chia’s governance structure is more transparent, with an open-source development model and community involvement, while Pi Network’s governance is still under centralized control by its core team.

Pi Network’s Technical Architecture

Consensus Mechanism

Pi Network uses the Stellar Consensus Protocol (SCP), a consensus algorithm that ensures transaction security while enhancing processing speed. Unlike Proof of Work (PoW) or Proof of Stake (PoS) mechanisms, SCP allows nodes to reach consensus without significant computational resources. In Pi Network, SCP is implemented through “Security Circles,” networks of user trust relationships. Users add trusted individuals to their Security Circle, collectively establishing the network’s trust foundation and ensuring transaction authenticity and security.

Node Structure and Roles

The Pi Network ecosystem comprises various participant roles:

• Pioneers: Users who demonstrate activity by engaging with the mobile application daily.
• Contributors: Users who establish Security Circles by adding trusted members, thereby enhancing network security.
• Ambassadors: Individuals who expand the network by inviting new users.
• Nodes: Devices running the Pi Network software, participating in the consensus process, and maintaining the blockchain.

Mobile Mining and Energy Efficiency

Pi Network enables users to mine cryptocurrency through mobile devices without significant energy consumption. By utilizing SCP and Security Circles, the network validates transactions efficiently, allowing users to mine Pi coins by interacting with the app daily. This approach democratizes access to cryptocurrency mining, eliminating the need for specialized hardware.

Security and Trust Model

Security within the Pi Network is maintained through the establishment of Security Circles, where users add trusted individuals to their network. These interconnected circles form a global trust graph, ensuring that transactions are validated by reliable participants. This model reduces the risk of fraudulent activities and enhances the network’s integrity.

Scalability Considerations

As Pi Network grows, scalability becomes a necessary aspect of its technical architecture. The SCP-based consensus mechanism is designed to handle increased transaction volumes without compromising speed or security. Ongoing developments focus on optimizing network performance to accommodate a larger user base and transaction load.

Decentralization Efforts

Pi Network aims to achieve full decentralization by transitioning control from the core team to the community. This involves encouraging more users to operate nodes, thereby distributing the network’s governance and validation processes. Decentralization enhances security and aligns with the foundational principles of blockchain technology.

Integration with Existing Technologies

The architecture of Pi Network is designed to integrate smoothly with existing technologies. The mobile application interfaces with the blockchain, allowing users to mine and transact Pi coins effortlessly. The network’s infrastructure supports interoperability with other blockchain platforms, facilitating broader adoption and utility.

Future Developments

Looking ahead, Pi Network plans to introduce smart contract functionality, enabling developers to build decentralized applications (dApps) on its platform. This expansion will enhance the network’s capabilities, offering users a wider range of services and applications within the Pi ecosystem.

Criticisms on Pi Network: Transparency, Governance and Economic Model

Pi Network has faced scrutiny over its transparency and degree of decentralization. While it claims to be a decentralized blockchain platform, the development team controls all active mainnet nodes, raising questions about the actual level of decentralization. The lack of publicly available source code limits external verification of the network’s integrity, leading to concerns about transparency.

The project’s economic model has also been a point of contention. The core team reportedly holds a significant portion of Pi tokens, with estimates suggesting that they control 93.6 billion out of the 100 billion total supply.

Pi Network’s governance structure has been criticized for lacking community-driven decision-making processes. Unlike other decentralized blockchain projects that involve the community in governance, Pi Network’s team retains substantial control over the network’s operations. This centralization contradicts the decentralized ethos that many blockchain projects strive for, leading to skepticism about the project’s commitment to true decentralization.

The mandatory Know Your Customer (KYC) process requires users to submit personal identification documents, but the project’s data security measures remain unclear. In 2021, security analysts discovered that user information was being sent to Pi Network’s centralized servers, creating identity theft and fraud vulnerabilities.

What is the PI Token?

PI Token Utility

Within the Pi Network, the PI token serves multiple functions:

• Medium of Exchange: Users can use Pi tokens to purchase goods and services within the network, fostering an internal economy.
• Incentivization: Active participants, including those who mine Pi, refer new users, or operate network nodes, receive PI tokens as rewards, encouraging continuous engagement and contribution to network security.
• Developer Resource: Developers require Pi tokens to access and deploy dApps on the Pi Network, promoting innovation and expansion of the platform’s utility.

PI Supply and Allocation

The total supply of Pi tokens is capped at 100 billion, distributed across several categories:

• Mining Rewards (65%): Approximately 65 billion Pi are allocated to reward users for mobile mining, referrals, and node operations.
• Ecosystem Development (10%): Around 10 billion Pi are reserved to support community initiatives, fund dApp development, and enhance the all ecosystem.
• Liquidity Pool (5%): About 5 billion Pi are designated to provide liquidity for transactions within the Pi Network.
• Core Team Allocation (20%): The remaining 20 billion Pi are allocated to the Pi Core Team as compensation for their development efforts and ongoing network maintenance. This allocation follows a vesting schedule aligned with the distribution to the community.

PI Vesting Schedule

The Core Team’s allocation of 20 billion Pi tokens is subject to a vesting schedule that aligns with the distribution to the community. This approach ensures that the team’s incentives are closely tied to the network’s growth and success, promoting long-term commitment to the project’s development.

Pi Network’s Economic Design

Pi Network’s economic model balances accessibility, supply, and long-term utility. A declining token issuance model is implemented, where the system-wide base mining rate adjusts dynamically based on a monthly supply limit. This mechanism ensures the mining rate decreases as the network approaches its supply limits, preventing endless inflationary growth.

Pi Network Governance

Pi Network’s governance structure is designed to balance centralized oversight with community participation, aiming to foster a secure and inclusive ecosystem. The Core Team, comprising the project’s founders and lead developers, oversees important decision-making processes. This centralized approach has been instrumental during the network’s developmental phases, ensuring cohesive progress and streamlined feature implementation.

But, this centralization has raised concerns within the community and among blockchain experts. Critics point out that the Core Team retains significant control over the network’s nodes and infrastructure, which may conflict with the principles of decentralization inherent to blockchain technology. The lack of publicly available source code further exacerbates these concerns, limiting external verification and transparency.

Pi Network intends to transition towards a more decentralized governance model in response to these issues. This proposed model involves the community in important decision-making processes, potentially through mechanisms such as voting systems powered by smart contracts. By enabling users to propose, discuss, and vote on protocol changes, new features, and policies, the network seeks to distribute authority more evenly among its participants.

Conclusion

Pi Network introduces a mobile-first cryptocurrency ecosystem that uses the Stellar Consensus Protocol (SCP) to facilitate energy-efficient mining and transaction validation. The network has expanded to include millions of users, an evolving developer ecosystem, and various applications to increase real-world utility for the Pi token. Governance remains under the control of the Core Team, with proposed transitions toward community-led decision-making. The upcoming Open Network phase is expected to enhance interoperability and expand the use cases for Pi. At the same time, ongoing developments in smart contracts, decentralized applications, and ecosystem integration will determine the long-term viability of the project.