What is Pi Network?
Pi Network was officially launched on 14 March 2019 by Nicolas Kokkalis and Chengdiao Fan. Pi crypto was positioned as an attempt to simplify the accessibility of cryptocurrency and introduce more people to cryptocurrency through a simple crypto mining and management system.
The most appealing feature of Pi cryptocurrency at launch is its mobile mining feature. Using the Pi mobile application, users can mine Pi coins on their mobile devices. Participation in the mining program was solely by invitation.
The Pi mobile application can be installed on Android and iOS devices. After installing and setting up the application, users can mine Pi coins on their devices with a single click. Members of the Pi network are popularly known as Pioneers. Since its launch, Pi network has garnered a large social media following and has seen incredible growth in participation with a reported 33 million members as of 2022.
Network participants can play a number of roles including running a node on their personal computers, referring new members, or mining Pi coins on their mobile devices. These roles are rewarded with Pi coins.
Note: Neither Pi coin nor any token related to this project is listed on CoinGecko.
How Pi Network Works
For the Beta stage of the project, the mobile application simulates the mining system which will be properly launched when the mainnet is fully functional. The mobile application users take part in block validation and receive rewards in Pi cryptocurrency.
When active, miners on the mobile app connect to one or more nodes. When connected, mobile miners inquire if the transaction has been recorded on the ledger. They also get the most recent block number and the hash value of that block.
Rewards for mining the block are distributed to the node owners and the mobile miners.
Consensus Algorithm
Pi network runs the Stellar Consensus protocol (SCP). SCP was developed by David Mazières, Chief scientist at Stellar Development Foundation for the Stellar blockchain. It uses a novel mechanism called Federated Byzantine Agreements to ensure that updates to a distributed ledger are accurate and trustworthy.
The SCP protocol employs a real voting system. Nodes on the network vote on the validity of a block and the next block to be mined. A block is only mined when a majority of the nodes agree that it should be mined next and also confirm its validity. The nodes that participate in this consensus are elected by the creator of the system. The SCP is energy-friendly but is criticized for being centralized.
Tokenomics and Reward System
Pi coin is the native token of the Pi network. Users on the Pi network earn Pi coins through mining. Holders can use their Pi coins to pay transaction fees and also perform transactions on applications and marketplaces built in the Pi ecosystem. Pi coin supply system is guided by activities on the network and distributed solely as user rewards.
There was no official pre-mine but users who participated in the beta mining program can port their tokens to the mainnet. Unlike many other cryptocurrencies, it doesn’t have a fixed total supply.
Each user that joins the Pi network (by creating a Pi account) and is allocated a pre-determined number of Pi coins. This allocated amount is mined over time. That is, the user can only mine this allocated number of tokens throughout their lifetime. This allocation is made only to the first 100 million users on the Pi network. A reward system also exists for users who refer new members to the Pi cryptocurrency project.
The Pi coin mining protocol mints an extra Pi coin for every coin minted for a member or referral reward. This extra coin is reserved for compensating developers on the network. The total Pi coin supply is a sum of the member, referral, and developer reward.
Governance Model
Pi network operates a ‘Semi-DAO’ governance model. In contrast to the widely known decentralized governance system, Pi network adopts…
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