Debunking the Pi Network Project: Is Pi Coin a Scam?

There has been much controversy and speculation about the Pi Network project since it officially launched on the mainnet at the end of February.

There has been much controversy and speculation about the Pi Network project since it officially launched on the mainnet at the end of February. While the price of Pi Coin has hardly changed in the past few days, continuing to trade in the range of $0.75–$0.80, the largest cryptocurrency YouTube channel, Coin Bureau, decided to take a closer look at the project.

For those living under a rock, Pi Network is a blockchain project that began in 2018. It claims to be developing a decentralized ecosystem with a focus on financial inclusion. The project has managed to acquire a following of several million users, who mine Pi tokens daily via a mobile application.

However, despite its popularity, Pi Network has also faced criticism for its lack of transparency, slow progress, and alleged involvement in pyramid scheme activities.

In his in-depth analysis, host Nick will examine everything, including who really founded Pi, how it operates, its revenue generation methods, and the possibility of the Pi token reaching the magical $5 mark.

Let's start with the key players behind Pi. While the project is usually linked to Stanford graduates Nicholas Kokalis and Chengdiao Fan, the original team actually comprised four founders. Vincent McPhillip and Aurelien Schiltz were also part of the initial core team. However, Vincent left the project amid controversy and even filed a lawsuit, which was settled out of court in 2023. Aurelien remained and continues to contribute actively to Pi's codebase.

One of the most crucial aspects of the Pi Network is how it functions. Unlike most cryptocurrency projects that utilize proof of work or proof of stake, Pi runs on a modified version of the Stellar Consensus Protocol. It is highly centralized, with only 28 nodes and 3 validators, all maintained by the core Pi team. This level of control has raised concerns for individuals seeking a truly decentralized currency.

In terms of mining Pi, it's not traditional mining. Users tap a button once a day to demonstrate that they are human and engaged in the network. It's more like a game reward system than a blockchain consensus mechanism. And while millions of users have completed KYC to claim their tokens, only a small portion of the total supply is currently unlocked and available for trading.

This leads us to the token economics. Pi has a maximum total supply of 100 billion coins. Sixty-five percent is allocated for mining, while the remaining percentage is for the team, platform, and liquidity. To date, 7.2 billion coins have been mined, but only 2 billion are unlocked for users. Meanwhile, over 3 billion Pi are unlocked for the team and platform. This means that the core team controls a greater circulating supply than the entire user base.

Now, for the burning question: Can Pi Coin really reach $5?

Technically yes, but only if specific conditions are met. Low liquidity on exchanges makes price pumping easier. According to data from Coin Bureau, only about 300 million Pi are sitting on known exchange wallets. This number is very small compared to other major cryptocurrencies. And if the team is selling coins through OTC exchanges and using that money to work with market makers, they could keep the price artificially high – at least for a time.

Nick explains that this kind of price manipulation isn't unique to Pi. It also occurs with other large projects. But because Pi has a low available supply on exchanges, moving the price is less challenging. That's how some believe Pi could reach $5, even if its fundamentals don't support that valuation.

The video also mentions upcoming milestones that could attract more attention and potentially boost the price. These milestones include smoothly transferring coins to the mainnet, converting forum tokens to Pi, and bringing in more developers to contribute to the ecosystem. However, Nick warns that the lack of transparency and slow communication with the Pi Network community is holding it back. Even now, their roadmap seems outdated and incomplete.

There are also other concerns. The KYC process, handled internally by Pi, raises questions about privacy and the legitimacy of the data. If organizations and exchanges don't trust it, they won't participate in the ecosystem. And without their support, Pi's growth could stall.

Finally, the Pi Coin craze is built on a strange combination of potential and mystery. It has millions of users but very little liquidity. It promises decentralization yet is still tightly controlled by a small group. And it talks about utility, but the ecosystem is still in its early stages.

So, can Pi Coin reach $5? Maybe, especially if low liquidity continues and interest spikes due to significant announcements or listings. But whether it can sustain that level – or even deserve it – depends on the level of trust the project can earn from the broader cryptocurrency community. Right now, this is a project to watch, but perhaps you shouldn't bet the house on it just yet.