The Pi Network controversy: Why critics are skeptical

After six years in the making Pi Network announced the launch of its open mainnet on Thursday, allowing users to trade Pi tokens externally. But the project has faced persistent criticism since its inception and has yet to gain recognition for its blockchain technology.

Pi Network was launched in March 2019 by Nicolas Kokkalis, Chengdiao Fan and Vince McPhillip, who later quit due to internal disagreements. Pi Network claims 60 million users, with 10.14 million mainnet migrations and 19 million completing know your customer (KYC) identity verification. On social media, Pi Network has 111,000 followers on Reddit, 2.9 million on Telegram, 3.5 million on Twitter, and 1.65 million on YouTube.

Unlike traditional mining, where users validate transactions, Pi users simply log in daily, tap a button and collect tokens. Pi Network’s whitepaper claims to redefine mining beyond proof-of-work models, stating, "We define ‘mining’ more broadly than its traditional meaning equated to executing a proof-of-work consensus algorithm as in Bitcoin or Ethereum."

However, some experts argue that cryptocurrency mining is already well-defined, and Pi Network’s redefinition serves its own agenda. Crypto news outlet CCN describes Pi Network as a decentralized blockchain platform that allows mining via smartphones. However, unlike Bitcoin or proof-of-stake systems, where miners and validators are incentivized to act honestly, Pi Network relies on users forming trust-based groups to validate transactions.

"But what happens if the foundation of this trust is flawed? Imagine a scenario where bad actors infiltrate a network, vouching for one another and spreading without restraint. The stakes for these users? Virtually nil," CCN warns.

Despite Pi Network's decentralization claims, experts note that all active mainnet nodes remain under its core team’s control. The absence of smart contracts even after six years further raises doubts.

User interface of Pi Network app on a smartphone. Photo by VnExpress/Bao Lam

Inconsistencies in user numbers

Pi Network claims 60 million users, but blockchain explorer ExplorePi reported only 9.11 million wallets, or just 15% of the claimed user base. Furthermore, only 20,000 wallets show daily activity, raising concerns about actual engagement.

"In the crypto world, discrepancies in user statistics can severely impact perceived legitimacy," OneSafe notes. "This lack of honesty can erode trust, making potential users wary."

Pi Network’s mandatory KYC process has sparked privacy concerns, requiring users to submit video selfies and government-issued IDs. CoinTelegraph warns that KYC data is processed by regional validators or self-registered users, increasing the risks of misuse and identity theft.

Critics also say the Pi Network development team lacks transparency and demands excessive app permissions, including contact access. If Pi coins are stored on mobile devices or centralized servers, administrators can theoretically manipulate the supply at will, they point out.

Pi Network’s daily login model follows principles of habitual conditioning. In "Atomic Habits," author James Clear explains how habits form through repeated small actions. For Pi users, the daily notification is the cue, tapping the button is the routine and earning Pi is the reward. CCN notes that this repetition creates a psychological trap, where users hesitate to quit after months or years of effort. "The app effectively entangles users, making them complicit in their own entrapment."

Pi’s referral-based system further fuels engagement as users earn more Pi by inviting others, a structure critics liken to a Ponzi scheme. Pi’s community aggressively defends the project, often attacking critics online.

"Pi Network appears to have cultivated a ‘cult-like’ following over the years," Le Binh, a cryptocurrency analyst, says. "They are ready to criticize and attack dissenters, even when valid concerns are raised."

Unrealistic price expectations

Many Pi Network supporters believe its token will be highly valuable. Some advocate a "consensus price" of $500–1,000 per Pi, urging others to maintain high valuations. Some even promote a global consensus value of $314,159 per Pi and strongly defend this projection. OneSafe dismisses these estimates as "unrealistic."

The Pi Core Team set a total supply of 100 billion tokens, with around 6 billion expected to enter circulation post-mainnet launch, according to CoinTelegraph.

"If Pi were valued as optimistically as its community suggests, its market capitalization would be astronomical, with no real-world data or market foundation to support it," Nam Nguyen, a cryptocurrency trader, points out. He notes that Pi Network’s self-reinforcing optimism creates an internal bubble. "This is where the arguments begin."

CryptoTimes attributes Pi’s rise to psychological tactics that fuel digital trends, but emphasizes that a project’s growth ultimately depends on its actual value.

"As of now, the hyperbole around Pi Coin and Pi Network is just noise with no real value."