Pi Network – Digital Currency Review: scam or not? – The Money Mountain

If I had a bitcoin for every new cryptocurrency idea that came along, i’d be a very rich man. It seems that every few months we’ve got a new entrant, promising to be the solution to all our global currency issues. Issues that most of us never even realised we had!

EDIT: If you like the look of Pi, check out our article about Bee Digital Currency.

In this article I’ll tell you about a fast-growing entrant to the digital currency world. It’s a different idea to what’s gone before, and the Stamford University team behind it claim that it could be revolutionary. Millions of people have already signed up to earn it!

I’ll give you the lowdown on what you need to know – including what I think are the the risks – and how you can get involved. The bottom line is it’s free to do so, and whilst it’s not going to make you money in the short-term, it might be worth a gamble in case it really takes off!

Ladies and gentleman, let me introduce you to Pi – a new digital currency.

(A quick note here: We have been mining Pi on our phones for several months to test it out and check we know what we’re writing about. We have no other relationship with the Pi Network and the below article represents our honest view of it – you can see that by the doubts we have.)

Some of you have come here looking specifically for a joining code. If you don’t already know someone on the network, you can use ours: klinsmannj18

What is Pi cryptocurrency and how is it different?

According to the team behind it, “Pi is a new cryptocurrency for and by everyday people that you can mine (or earn) from your phone”. It sounds simple enough.

Here’s their own video summing it up:

It has two big selling points:

1. It’s accessible to all and easy to mine (or earn).
2. It gives everyday people the chance to capture more economic value instead of lining the pockets of banks, technology giants and other intermediaries.

They’re certainly right about the first point. We’ve found it super easy to earn. Anyone who has a smartphone can do it, just by downloading the Pi app (available on android or iPhone) and simply checking in once a day. There’s more advice later in the article on how to join a mining network and get started.

The phone app is unintrusive. It uses no battery power and negligible data, so you barely even know it is there.

This is a stark contrast to Bitcoin, where you need specialist equipment and expertise to mine it. And the power that’s consumed in doing so is absolutely shocking (pun very much intended) – as you can see from Digiconomist’s handy tracker:

When the resource being used to mine Bitcoin is compared to the entire usage of countries like Venezuela or Denmark, you know something has gone wrong.

As for their second claim about it being used as a currency by ordinary people to capture more economic value – well that’s some way from being a reality.

What can I use Pi Cryptocurrency for?

At the moment, the honest answer is: not much.

The smart minds behind Pi have a long-term plan. Eventually they intend to allow you to directly purchase goods and services using Pi, by creating a peer-to-peer market place for goods and services.

You’ll also be offered the chance to exchange Pi for fiat currency (like £, € or $) too. This is all supposed to be possible in ‘phase 3’ of the project.

Understandably, you’ll be wondering what exactly ‘phase 3’ is. Phase 1 – which involved getting enough users on board – was launched in March 2019 and was completed one year later.

So we’re now in Phase 2, which is largely a testing phase and users may volunteer to test ‘node’ software on their computer to decentralise the network (though you can just stick with your phone).

Goals for Pi, phase 2 – courtesy of the Pi Network

The date for Pi to move to stage 3 is therefore not fixed, and depends on the level of progress in phase 2.

None of us know when that will be – it could be months, years, or even never materialise at all. That lack of uncertainty is one big reason to be doubtful about the project.

Pi in the sky? Reasons to be doubtful

Honestly, I’m always skeptical when it comes to digital currencies. The idea that a currency can be conjured out of thin air, exist electronically, and then suddenly worth real money seems like pure alchemy. I’ve already expressed my concerns over the value of Bitcoin.

In the case of Pi, it has been developed by just 3 people (admittedly, 3 smart-sounding people – all Stamford University graduates, 2 of whom have doctorates). If I’m honest, this isn’t the way I envisaged the digital currency revolution looking.

Surely, if Pi is going to become mainstream and support hundreds of millions of users and billions of transactions, the team is going to have to expand rapidly.

The 3 founders of Pi – picture courtesy of the Pi Network

The developers have set out a long white paper on the workings, merits, and future of the currency. Technical geeks are going to love it – but for the rest of us, the FAQs are much more easily digestible.

The thing that’s made immediately clear is that Pi is not free money – bummer. It is described as ‘a long term project whose success depends on the contributions of its members.

Although the white paper is long and fairly comprehensive, the sticking point in all of this is when, if ever, it will be a viable currency. And frankly, nobody seems to know – and from what I’ve seen, I’d include the developers in that.

At this stage, the plan seems to just be ‘grow the numbers, test the system and we’ll take it from there’. For those of us who want a little more reassurance, there’s not much to go on.

Reasons to believe in the Pi digital currency

Ok, ok, so the network might just be powered by 3 people who could just be working from their bedrooms, but they are pretty smart.

Add to that, they are being upfront about this: it’s not a get-rich-quick scheme that they’re peddling (unlike many other currencies out there). Their intent genuinely seems to be to develop something useful. Something better.

And as for the small-scale of the team right now – well lots of enormous ideas grew from small teams working in dingy garages and bedrooms (looking at you Apple and Facebook).

The Android version of the app has a lot of decent reviews – but do your own research. Those giving it one star seem to have run into some technical difficulties.

Using virtually no advertising, there were over 3.5 million people on the network when they moved to Phase 2 in March 2020, just one year after launching. Pretty impressive from just word of mouth!

In many ways, I prefer the unassuming, budget look of the founders – it’s certainly more trustworthy than if they were carrying on like Fyre Festival organisers, posing with models on yachts. These guys are prepared to put their faces and reputations to this app, and that certainly helps with the credibility of it.

At the end of the day, there are no certainties when it comes to cryptocurrencies. And their proposal isn’t offering that – it’s just a matter of inviting you on board and seeing what happens.

Considering you’re not having to invest anything other than the effort to download an app and open it once a day, that seems a reasonable deal, especially when you think what this could become.

Update: In May 2020 the Pi platform started running adverts on its platform. The creators describe this as a necessary step in order to fund the various costs and make it self-sustaining. The adverts seem to be relatively unintrusive and if it helps them fund the development of the platform into something viable, I’m on board with them being there.

Update no.2: In April 2021 the Pi network launched their first trial digital wallet, which was a significant milestone. This showed the platform developing and is a really exciting step on the long path towards Pi being a real, usable currency. Could we be getting closer to something?!

Getting a slice of the Pi – how to mine it

As we said above, mining Pi is simply a matter of getting the app – search for ‘Pi Network’ (or click on these android or iPhone links – they’re NOT affiliate links) and simply check in once a day.

We’ve been using the app for a while now and haven’t had any issues with it. We can also confirm it doesn’t drain battery or use any significant amounts of data.

Our progress on the Pi App so far…

In order to help the Pi network remain secure you need to join someone else on the network. If you don’t have anyone else to join then you can use my code klinsmannj18 (or this link which should give you 1 free Pi: https://minepi.com/klinsmannj18) – please don’t feel under any obligation to do this.

Don’t do what I did and just guess a code, because a) you end up linked to a complete stranger, and b) that stranger might be (and is in the case of the stranger I picked) inactive, which slows your mining progress.

You can do things to boost your mining rate on the network: joining to other active miners is the easiest and most obvious way to do it, so it’s worth getting any interested friends and family involved.

Signing up friends and family makes it sound a bit like a pyramid scheme, so prepare for some skepticism. The Pi Network claim that their security is enhanced by these personal networks, and it helps you mine faster.

Note, however, that you only earn from your direct network, you don’t get credit from other people’s network – so it’s not a digital multi-level marketing scheme. Currently, it seems that there’s no restriction on the number of people who can join your network so you can mine quite a lot more Pi if you get lots of people to join. This is clearly a tactic to help the platform grow in these early stages.

Summary

Whilst it’s early days for Pi, it’s growing at a rate that can’t be ignored. It’s free and easy to start earning it, and for us that’s made it worth giving it a go.

Apart from some wasted time, you’ve got very little to lose. Of course, it might not amount to anything, but if it achieves its targets then it will be quite something. And in that situation, getting in early could eventually pay off nicely!

Let us know what you think about it in the comments below. Be warned, though, if your comment is simply to leave a joining code and doesn’t add anything else to the conversation, it may not get approved.

OTHER THINGS TO CHECK OUT: If you want a way you can start making actual money today with your phone then you might want to consider an app called Honeygain (see our review here). If you like the look of Pi, check out our article about a similar idea: Bee Digital Currency.

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