What is Pi Network Coin?
The Pi Network is a project that allows cryptocurrency mining to be accessible to everyone. The issue they aim to address is the fact that cryptocurrency mining was often too expensive and centralized.
This was because it is dominated by large companies such as in the case of Bitcoin.
The name Pi emerged from the mathematical constant.
Pi Network uses a consensus mechanism known as “Stellar Consensus Protocol.”
It exists as an app that users can download on their mobile devices.
It hopes to enable cryptocurrency mining to regular people.
Why is Cryptocurrency Mining Centralized?
First generation cryptocurrencies such as Ethereum and Bitcoin have always been difficult for the average person to mine.
In the early stages of the cryptocurrency, it was possible to earn cryptocurrencies with just a small amount of computing power
It was even possible at one point to earn 50 BTC by running a mining software on a personal laptop. However, as mining became more popular, more miners decided to set up multiple powerful computers to mine.
As the cryptocurrency increased in value, companies soon started to emerge and mining happened on a large scale. For Bitcoin, the construction of mining farms caused the Bitcoin Gold Rush phenomenon.
This made it difficult for the average person to contribute to the network and get a piece of the share.
Since huge companies controlled the network and mining power, this is in a way a form of centralization where production power and wealth is controlled by these mining companies.
In the case of Bitcoin, a large portion is still concentrated in a few hands.
In addition, this also contributes to the environmental issues surrounding Proof-of-Work mining as it continues to be done on a larger scale.
Bitcoin is essentially a decentralized network that is unintentionally centralized due to the concentration of power in the mining of the cryptocurrency.
How Does Pi Network Solve Mining Centralization?
Pi Network is developing a way for everyday people to mine cryptocurrencies using their mobile devices.
Thus, they have developed an app and used a consensus mechanism called the Stellar Consensus Protocol that allows mining on phones and is a lot more user (and planet) friendly!
Neither Proof-of-Stake Nor Proof-of-Work
The Stellar Network is a platform that was released in 2014 and has IBM, Deloitte and Stripe as partners.
Their network boasts fast transactions and low fees making it an attractive platform for payments across country borders and for smart contracts.
The consensus mechanism using the Stellar Network is the Stellar Consensus Protocol.
To understand how the network works, there are a few different concepts to be understood first.
Byzantine General Problem (BGP)
The Byzantine empire was often quoted to be the longest lasting medieval power and is said to be a Greek-speaking Roman Empire of the Middle Ages.
The problem this empire faced was that during a war, the large army of Byzantine had encircled a capital city from every direction. The army was split into a few divisions with each having their own generals.
The general of each division communicates via a messenger. They are all trying to agree on whether to attack or retreat.
In an ideal situation, the generals would cast a vote to decide on the course of action. The action with the highest number of votes would decide whether the army would attack or retreat.
However, what we do not often anticipate is that there are traitors within the army. The traitors could be among the generals or the messengers. In addition, messages could be lost along the way and cause confusion. It could also be misinterpreted.
Thus, common consensus on the action the army should take is quite difficult.
This is the same problem that affects blockchain and other decentralized networks.
The security of the system comes from the consensus that all nodes within the network agree, however not all nodes have the best intentions in mind and may want to attack. This is why a consensus mechanism is necessary to ensure proper communication.
What is consensus?
Consensus is to agree that a transaction or information registered is accurate. In a centralized network, only one party agrees that information is correct and everyone else merely trusts the centralized party.
In a decentralized network such as the blockchain, anyone can add a transaction to the block and anyone can also verify if the transaction is right or wrong. Thus, consensus must be achieved to ensure the information is correct.
However, consensus is not easy to achieve because we generally do not know the intentions of the other users and validators of the blockchain.
To achieve this, a protocol is established.
Bitcoin uses Proof-of-Work which requires the use of resources like computational power to verify transactions. To attack, a malicious node has to use extra resources which are usually in the form of money. Someone who works in favor of the network will be rewarded.
Proof-of-Stake is another consensus mechanism which uses less computational resources and is the basis of the Stellar Consensus Protocol.
Stellar Consensus Protocol
The consensus mechanism that Pi Network implements is known as a FBA (Federated Byzantine Agreement). It was invented by Professor David Mazières who is from Stanford.
The main features of this consensus mechanism is:
Decentralized Control : Anyone can be a node in this network
Low latency : Consensus only requires a few seconds
Flexible trust : Participants can decide which nodes to trust.
Asymptomatic Security : Digital signatures and hash families used to protect network
The Stellar Network is made of quorums and quorum slices.
Quorum : A set of nodes which is enough to reach consensus
Quorum slice: A set of nodes enough to convince another node about the validity of a statement
The general overview of how the consensus works can be viewed here for an in-depth explanation.
Mine Your Pi
Pi Tokens are the first tokens ever that could be mined entirely from a mobile device. As for now, the only way to get Pi tokens is to mine it from the app. It does not seem to be listed on any cryptocurrency exchanges.
In order to start, you will just have to download the Pi Network app and use an invitation code from another user.
Once this is done, you can start earning by opening the app every 24 hours and clicking on the lightning button to start mining.
There also other ways to increase your efficiency of mining:
Early joiners get higher rates
Inviting other trusted members for a bonus of 25%
Users can also choose to be a Pi node but it requires an extensive selection process. Pi node owners will eventually get a cut of transaction fees. It may be a good idea to register as a Pi node if you think this may be the future.
The Origins of Pi
Pi network was introduced on March 14 2019 by Stanford graduates. Dr Chengdiao Fan and Dr Nicholas Kokkalis who aspired to create a cryptocurrency that a common man could mine and benefit from.
Both Dr Chengdiao and Dr Nicholas have doctorates from prestigious universities, one in computing anthropology and the later in computer science.
Dr Nicholas Kokkalis has extensive experience designing viral social apps that have garnered over 20 million users.
He had a company known as Gameyola that won the Facebook Fun Award which is a distribution and monetization platform for flash games.
Dr Chengdiao Fan has a Phd in Computational Anthropology which is a rather interesting field. It uses social computing to unlock human potential on a global scale. She is an expert in the study of human behavior and especially in human-computer relations.
She is currently working on the collaboration of value between people and blockchains which will greatly change the way we do business today.
Dr Chengdiao could be described as a wonder woman as she is not just a doctorate holder but also bilingual, a scientist, engineer and a mother.
Together, both founders are working towards developing the Pi Network to be a platform that makes cryptocurrencies accessible to regular people.
How To Mine With The Pi Network
Step One : Download the Pi Network App here.
Step Two: Sign up with either your Facebook or phone number.
Step Three : Set up a password.
Step Four : Fill out your details with your real name, country and phone number.
Step Five : Enter the invitation code. You can either use a friend’s code or simply just google for a code.
Step 6 : Start mining! Simply click on the lightning button. You will have to log into the app every day to prove you’re a human and not a bot. You may keep your notifications on to have the app remind you to log in.
Step 7: The app provides everyone with one Pi upon log in. Ever user is able to work up certain ranks that users can aim towards :
Pioneer : Initial level for all users and mining volume is set at 0.39 π/h
Contributor : Users will achieve this level when they mine enough for three days.
Ambassador : Users can invite other participants to the network.
Node : Users can connect some additional hardware to become a node in the Pi network.
Future Plans For The Pi Network
The Phase 3 of the Pi Network is a much anticipated update that most users are excited about.
Phase 3 which was highlighted in the Pi Network whitepaper update. This would be the full launch of the Pi coin.
This would allow Pi coins to be traded and withdrawn which would be the full launch of the protocol.
The exact date of the launch of Phase 4 is still not fixed which has caused some skeptics to believe that Pi network may be a scam.
This is because despite being able to mine the coins, the Pi coins don’t seem to have a significant value yet.
However, according to the Pi team, the network is not a scam but a genuine effort to allow regular people to access cryptocurrencies.
Only time will tell.
Final Thoughts About The Pi Network
Pi Network was created for regular people just as the founders intended it to be. They wanted Pi to be able to be mined without any additional devices and extra consumption of electricity.
The main plus points of the Pi Network include:
Simplicity : Anyone can mine with a simple click of a button even if they don’t understand the concept of mining and how it works!
Availability : Number of coins mined does not depend on the power of the device.
Fair rewards : Anyone can participate in the network and earn equal amounts of Pi coins.
The only downside to the Pi network is that the Pi coins are not tradable or available on any exchange.
Thus, you will be able to mine the tokens however you cannot convert them to fiat money or other tokens until Phase 3 is launched.
This con has caused some doubts in people as to whether Pi is a legit network that can be monetized.
The only way to tell is to wait until phase 3 is launched. Early adopters would definitely benefit if it becomes a reality.