In-Depth Analysis Report on Pi Network: Scam Coin or Future Basic Income?

1. Introduction

The cryptocurrency market has undergone rapid growth in recent years, bringing significant changes to the financial landscape. Amidst this evolution, Pi Network has drawn considerable attention since its inception by offering a simple mining process via smartphones. While Pi Network emphasizes user-friendly accessibility and aims to democratize cryptocurrency mining, questions and controversies surrounding its legitimacy and potential persist. A deeper analysis is now required to determine whether Pi Network is merely a scam or a groundbreaking initiative that could secure basic income for future societies.

This report aims to comprehensively analyze Pi Network’s origins, technical features, core functions, and the concerns raised about its legitimacy. It begins by examining the background and early development of the project, followed by an in-depth look at its technological mechanisms and notable features. Furthermore, the report will assess scam allegations from multiple perspectives and objectively evaluate the strengths and future potential of the project. Ultimately, this report seeks to deliver a detailed conclusion on whether Pi Network is a scam or holds meaningful potential as a future basic income mechanism.

While Pi Network’s rapid user growth and seemingly widespread success might suggest a promising project, such superficial popularity alone is not enough to determine its technical soundness or intrinsic value. The accumulation of users does not necessarily equate to solid technology or meaningful utility. Thus, it is critical to examine what lies beneath the surface. Additionally, user inquiries about basic income reflect broader socio-economic concerns, not just speculative investment interest. This highlights the need for this report to assess Pi Network not only as a financial asset but also in terms of its potential to fulfill broader societal needs.

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2. History and Founders of Pi Network

Pi Network was founded by Nicolas Kokkalis and Chengdiao Fan, both Ph.D. graduates from Stanford University. Kokkalis specialized in distributed systems and human-computer interaction, while Fan holds a doctorate in anthropology and conducted research in social computing. Initially, Vincent McPhillip was also involved as a co-founder, but he left the project in February 2021. While the academic backgrounds of the founders helped boost the project’s early credibility, such credentials alone are insufficient to determine the project’s long-term value, especially given the subsequent criticisms and controversies.

Pi Network began in late 2018, originating from the idea of addressing the high entry barriers in traditional cryptocurrency mining. While cryptocurrencies like Bitcoin and Ethereum require expensive equipment and consume large amounts of energy, Pi Network was designed to allow anyone to mine via a smartphone. The project officially launched on March 14, 2019—Pi Day. The first version of the white paper, outlining the project’s vision, architecture, and technical details, was released in May 2019. Although the existence of a white paper is a positive sign, subsequent revisions and updates suggest changes or corrections to the original design.

Key milestones in Pi Network’s development include a focus on laying the foundation and growing the community in 2019. In 2020, the testnet was launched, integrating node software in preparation for the mainnet. A closed mainnet was released on December 28, 2021, along with an updated white paper detailing tokenomics, mining mechanisms, and a roadmap. From 2021 to 2025, the KYC (Know Your Customer) process has been gradually implemented, and mined Pi coins have been migrated to the mainnet. On February 20, 2025, the network transitioned to the open mainnet, enabling external connectivity and listing on multiple exchanges. The first Pi Day after this transition—March 14, 2025—featured announcements aimed at expanding the Pi ecosystem, such as the .pi domain auction, the PiFest event, and the growth of mainnet ecosystem apps. While this extended development timeline may reflect careful planning and execution, it also raised concerns about delays and missed opportunities. Frequent white paper revisions may indicate adaptability but can also reflect uncertainty or a lack of a clear long-term vision.

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3. Technical Analysis

The core technology behind Pi Network is the Stellar Consensus Protocol (SCP), which differs from the Proof-of-Work (PoW) models used by Bitcoin and Ethereum. SCP is a form of Federated Byzantine Agreement (FBA), where network participants form “security circles” with trusted peers to validate transactions. This consensus mechanism significantly reduces energy consumption compared to PoW. However, during the early phases, Pi Network’s core team managed and selected supernodes, leading to criticism about centralization. While SCP allows for fast and efficient transaction processing, the centralized control of supernodes challenges the blockchain ideal of decentralization.

Pi Network utilizes distributed ledger technology to transparently manage transaction records. It is designed to allow mobile mining with minimal transaction fees and high processing speed. The most notable distinction from traditional cryptocurrencies is that users earn Pi by simply tapping a button in the app daily, without energy-intensive mining. This makes it highly accessible but also raises concerns that it resembles a reward system more than actual mining.

Pi also uses a referral system to encourage network growth. New users must join via invitation codes, benefiting both referrer and referee with increased mining rates. While this effectively boosted user numbers, critics argue it prioritizes growth over intrinsic value creation.

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4. Key Features

One of Pi Network’s standout features is its mobile mining method. Users simply tap a button in the app once daily to earn Pi, with minimal battery or data usage. While this low barrier to entry is appealing, the lack of actual computational work casts doubt on the coin’s real value.

The referral system is another core component. Users can join only through an invite code, gaining increased mining rates. Adding 3 to 5 trusted members to a “security circle” further boosts earnings. Although effective in expanding the user base, critics question whether this system sacrifices substance for growth.

Pi Browser serves as a utility platform that provides decentralized web access. It supports both Web2 and Web3 applications, and grants users easy access to core Pi tools like the wallet, chat, and mining. It also enables developers to build, test, and deploy apps on the Pi testnet, contributing to ecosystem expansion. Future plans include supporting .pi domains for a more user-friendly web experience.

Pi Wallet is a non-custodial wallet that allows users to securely store, send, and receive Pi coins. Private keys are accessible only to the user, and biometric authentication provides convenience. Before the mainnet, users could test transactions with Test-Pi. Once KYC is completed, real Pi coins become transferable. The development of the Pi Wallet and Pi Browser signals an effort to build a self-sustaining ecosystem, though it remains to be seen whether this ecosystem will generate real-world use cases.

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5. Concerns and Scam Allegations

Despite its vast user base, Pi Network faces numerous concerns regarding its legitimacy. Critics argue that the daily tapping mechanism creates no real value and wastes users’ time. Data privacy concerns have also been raised, especially regarding the collection of personal data through the KYC process and the app’s request for permissions like contact access.

The referral-based user growth strategy has drawn comparisons to pyramid or multi-level marketing schemes. The prolonged delay in being listed on major exchanges further fuels skepticism about the project’s actual value.

A lack of transparency in the development process is another major concern. There is insufficient technical documentation to verify how the system works or its security. The project’s development team has limited public visibility, adding to doubts about transparency. Initially, supernodes were controlled by the core team, which contradicts the decentralized ethos of blockchain.

Even within the Pi Network community, critical voices exist. For example, the proportion of active wallets compared to total users is reportedly low, and many users have voiced frustrations over delays in the KYC process. After the open mainnet launch, the sharp price drop and high volatility of Pi coins have further raised questions about the project’s sustainability.

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6. Strengths

Despite these concerns, Pi Network does have several notable strengths. Chief among them is its massive user base—tens of millions across more than 233 countries. This large community signals strong network effects and potential for widespread adoption.

The low barrier to entry via mobile mining is another significant strength. Without high energy costs or expensive equipment, newcomers to cryptocurrency can easily participate. This helps break down traditional barriers to entry and could introduce more people to digital finance.

Pi Network also benefits from a user-friendly interface. The intuitive design makes it accessible to users with no prior knowledge of cryptocurrency, further enhancing its mass appeal.

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7. Evaluation of Future Potential

Pi Network marked a major milestone with the open mainnet launch in February 2025. Its next phase focuses on expanding its ecosystem and enhancing utility. Events such as the .pi domain auction and PiFest aim to invigorate the community, while support for decentralized application (dApp) development is expected to help grow the ecosystem.

Infrastructure such as Pi Browser and Pi Wallet are already in place. Over 100 apps are preparing for mainnet deployment, and initiatives like the “Map of Pi” aim to connect with local businesses. Developer platforms are also being provided to encourage innovation. These steps suggest Pi Network could evolve from a basic crypto project into a platform with real-world utility.

However, expert opinions about Pi Network’s future remain divided. Some analysts predict substantial price appreciation, while skeptics warn of price drops or diminished value. Whether Pi will be listed on major exchanges will likely play a key role in determining its market value.

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8. Comparative Analysis of Similar Projects

Feature	Pi Network	Universal Basic Income Coin (e.g., UBI)	Mobile Mining Coin (e.g., Bee Network)	Bitcoin
Main Goal	Mobile accessibility, user growth, utility ecosystem	Unconditional periodic income	Mobile accessibility, user growth	Decentralized digital currency, store of value
Mining Method	Mobile app, daily tapping (no actual computation)	Not applicable	Mobile app, daily tapping (no actual computation)	Proof-of-Work (PoW), requires specialized hardware
Consensus Mechanism	Stellar Consensus Protocol (SCP)	Blockchain-based (varies by project)	Varies by project	Proof-of-Work (PoW)
User Base	Very large (tens of millions)	Relatively small (early-stage)	Large (estimated millions)	Large (global)
Key Features	Referral system, Pi Browser, Pi Wallet	Regular distribution, transparency, automation	Referral system	Limited supply, decentralization, security
Development Stage	Open mainnet launched, ecosystem building	Early or developing stage	Varies (depending on project progress)	Widely used, mature technology
UBI Relevance	Indirect (activity-based rewards)	Direct (core objective)	Indirect (possible future application)	Not related

Universal basic income (UBI) projects aim to provide unconditional, regular income using blockchain technology. While these coins emphasize efficient distribution and transparency, Pi Network focuses more on activity-based rewards within its ecosystem rather than direct UBI distribution.

Mobile mining projects like Bee Network and TimeStope share similarities with Pi in offering easy mining via apps and using referral systems to grow. However, they differ in terms of technical foundations, user base size, and development progress.

Compared to established cryptocurrencies like Bitcoin and Ethereum, Pi Network differs significantly in mining method, consensus protocol, market cap, and real-world applications. While it promotes easy access, it may fall short in decentralization and security when compared to PoW-based systems.

Cisco PI LMS, despite sharing the “PI” name, is unrelated and pertains to network automation. Similarly, tools like Cudo Miner perform actual computational mining, in contrast to Pi’s tapping-based reward model.

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9. Conclusion

In conclusion, Pi Network is a rapidly growing project backed by innovative ideas and a large user base, but the possibility of it being a scam cannot be entirely ruled out. Concerns over technical opacity, centralization, and the referral-based system suggest that caution is warranted. No conclusive evidence of fraud has been found, but the project’s long-term viability and ability to generate real value remain to be proven.

From the perspective of basic income potential, Pi Network does offer promising elements like mass accessibility and user engagement. However, high price volatility, lack of utility, and the absence of a mechanism for guaranteed income mean its role in delivering future basic income remains uncertain.

Pi Network’s success will ultimately depend on whether it can establish a viable ecosystem and deliver real-world utility. External factors such as exchange listings and regulatory developments will also significantly impact its future value. Therefore, prospective investors or participants should evaluate all of these aspects thoroughly and proceed with caution.

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