This is an investment related topic so please read our disclaimer regarding investment.
We don’t expect anyone except the founders to benefit from PI Network in a significant way because:
- We find it unlikely for the app to create significant value beyond a limited side income:
- Pi Network opened up on 20/February and got listed in about ten cryptoexchanges after that.1 However, we expect the token’s value not to appreciate significantly. Large advertisers are unlikely to show ads in a network where users login to make money by seeing ads. Such models have been tried many times without significant success.
- The app creates limited value. Users create no value except for providing their information to the mobile app, viewing ads or messaging other users. The value of these activities is unlikely to generate significant wealth for the large user base.
- However, if you
- Want to earn limited side income, you can use Pi Network or one of its alternatives.
- Recruited a large number of pioneers and if you managed to keep them active, Pi Network can generate more substantial value.
- Users are currently putting value in the app with limited benefits other than the tokens:
- The app does not provide any utility to its users beyond functionality like in-app messaging. Most users hold on to it with the hope that their coins will appreciate in value.
- The app works like a direct selling or affiliate marketing system, promising future rewards to users for bringing in new users. Some users put in additional time and effort to attract new users, such as numerous users adding their codes as comments to this article. We find it similar to multi level marketing since it includes direct selling and provides increased potential benefits to early users (i.e. earlier users mine at an increased rate), however affiliate or direct selling are possibly better analogies.
- Users are putting value into the app. There are hundreds of posts online saying PI Network can not be a scam because users do not put any money it. Users’ time and data are valuable to those users and they are spending these on the app. For more, you can see our analysis of the app’s privacy policy, its data collections, permissions and the 3rd party software included in the app.
- Some of its current practices are also used in scams:
- Founders are benefitting from the app regardless of the token’s value. They launched optional video ads at launch to monetize the active user base. The app also has a KYC process of collecting passport information. Having a verified audience through a KYC process would increase advertising revenues.
- Their marketing emphasizes the academic credentials of their founders. Very similarly, a blockchain scam without blockchain infrastructure, OneCoin, relied on the McKinsey experience of its founder in its marketing.
For users who are interested in currently tradable crypto currencies, here are our recommendations on cryptoexchanges.
For more info:
How does Pi Network work?
It is an app where users
- login every day and click a button to get digital currency. They just login and click a button.
- They earn tokens for this activity.
- level up by inviting more users to the platform. This makes them gain more digital currency per day. This is a common model in pyramid Schemes and multi level marketing.
Could Pi Networks’ currency be valuable in the future?
Of course. We have done an evidence based analysis here and there are also evidence that show that Pi Network is at least attempting to build something of value:
Vision
They have published a high level whitepaper outlining their ambitions without providing technical details on how their Pi Stack would work. One of their aims is to have others build apps on PI network to benefit from PI network users’ attention.
This reminded us of the pay-to-surf models of the dot com boom where companies installed software on user devices and acted as middleman between users and advertisers without generating substantial benefit to either party. None of these pay-to-surf models generated significant value for their users.
Product
They have built a production version of their blockchain (i.e. mainnet). Mainnet opened up to outside (i.e. enclosed network) as of February 20. Users are now able to exchange their Pi coins with fiat currency on exchanges.
Users claim that the project has shared some of its code on github.
Community
They are working towards building a developer community to build apps on their platform which can add value to the platform. They have run a hackathon and released a Software Development Kit (SDK) for 3rd party applications to initiate Pi coin transactions. The hackathon winners include apps like an e-commerce store and a marketplace to match freelancers to tasks.
These apps would start to generate now that the mainnet is opened up. The price of Pi and the metrics of these apps are now relevant metrics regarding the success of the project.
Traction
The app has had significant growth. It has ~850k reviews and a 4.4 rating on Google Play Store.2 Models similar to MLM tend to generate fast growth.
~400 LinkedIn users have chosen Pi Network as an employer.3 However, most of these people are app users with titles like “Cryptocurrency Trader”.
Team
Its founders were educated at and worked at Stanford. Though this is certainly a good thing, people rarely notice that Warren Buffet, Jeff Bezos, the writer of this article and numerous business founders were educated at reputable universities (e.g. Ivy League universities for these examples).
This is because their companies rarely use these facts. Based on our observations, business success is far more important and a better predictor of successful enterprises than academic credentials. And successful companies tend to speak about their business success rather than their founders’ academic credentials.
Could Pi Network make you rich?
Unlikely. Until recently, they have been delaying the launch of the blockchain and allow tradability on exchanges.
They were possibly waiting for the user base to reach enough scale so they can generate value for advertisers. However, we are sceptical that large advertisers will show ads in a network where users login to make money by seeing ads. The concept isn’t new. Such websites existed since the early days of internet. Crypto projects like electroneum were also similar. However, none of them reached mass adoption. This is because it is more valuable for advertisers to advertise in websites which are used since they provide some value to users (e.g. information, connecting with friends etc.).
Some commenters like Jennifer Vanessa Kaiser shared that the founding team may be concerned that once the coin is published on an exchange, there would be a selling frenzy. Then, the coin would not be valuable enough for people to keep on logging in to click. Dreams are better motivators than actual value:
However, so far, the coin’s value held up. Therefore, your coins can be worth some value but don’t get your hopes up. Other experiments like ETN only made their users a few euros per month before stopping to give free credits.
Are there free apps that pay users?
Yes:
- Brave browser replaces ads on websites with its own ads and shares the value with its users.
- Mode mobile app users can take actions like playing games or watching videos to earn.
There are also other free-to-use apps which provide virtual currency. However, we did not come across any of them that currently provide a tradable coin for free:
Bee Network
It is a clone of the Pi Network concept with even less transparency. Just skip it unless you like providing data to anonymous people. For more, feel free to read why we think it is likely to be a dangerous scam.
Electroneum ETN
Pi network as a concept is a clone of ETN without a tradable coin. However, ETN launched its coin on exchanges and has been tradable since 2017. It no longer provides free coins and its coin trades at a fraction of its ICO price.
Electroneum demonstrated that those that receive coins can sell them quickly once the coins become sellable.
So what should you do?
I wouldn’t bother installing the app. You can always make the argument that you only lose time by giving the app a try. However, this belief would lead the believer to follow any dishonest actor who promises future value. There is no scarcity of empty promises in the world, we try to spend our time more carefully.
However, if you already have the app, you can wait to see if the founders actually build something of significant value.
Finally, if you came across this because you are looking for ways to become wealthy without putting significant effort, we recommend you to look for other ways. As Buddha said, “Our mere existence is suffering” and as Karl Marx is claimed to have said “Life is struggle”. We don’t see shortcuts but consistent effort by flexible and open minds tend to pay off. Instead of such schemes, you could look into learning new skills which tend to pay off better.
We do not cover many such topics but feel free to follow our Linkedin page where we share how AI is impacting businesses and individuals or our twitter account
And if you are interested in finding other hyped-up companies that attract users in search of untold riches, check out our article on Earth 2.
What does the Pi Network team say about this?
Nothing until now. We asked for comments via their contact us form. The community has been contributing in the comments and they helped make this article more accurate.
How you can contribute to this discussion?
Please leave a comment, we are open to all view points. I am still learning about crypto and this is only an attempt to help people make informed decisions about their time. We publish comments as long as they do not:
- contain pi-network codes. If we let that happen, the comments below would be filled with codes that don’t add any value to the discussion. If anyone wants to find codes, they can google them.
- repeat already discussed points
- use inappropriate or immature language
- include major spelling mistakes
- ask for us to update the article. We update it at our pace. We have higher priority work that pays the bills and this was an article we wrote because we looked for these answers and couldn’t find them.
We sometimes make exceptions to the last 2 points and make grammatical changes to comments or remove immature language if a comment includes a relevant detail.
Why did AIMultiple write about this?
We don’t normally write about B2C topics but we looked for answers to this question and couldn’t find it. Therefore we decided to answer it.
We will not be writing about any more such topics in the future. AIMultiple’s only focus area is B2B technology.
Chronology
Initially, this post had the title: “Is PI Network a scam providing no value to users? Possibly yes”. Now that mainnet is live, we can eliminate that possibility, Pi delivers value, though that value is likely to be measured in cents per hour unless the user recruited many other users into the system.
Sources
- 1. Pi Network on X: "Pioneers, Open Network will launch at 8am UTC on February 20, 2025! With millions of KYC-verified Pioneers and a thriving utilities-driven ecosystem, Open Network expands available opportunities, which allows Pioneers to connect Pi with .
- 2. Pi Network - Apps on Google Play.
- 3. Pi Network | LinkedIn. Pi Network
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