What is Pi Network? Is it a Scam?

Since its release in 2019, Pi Network has been the most controversial and discussed project in the cryptocurrency community. It is a so-called mobile-first cryptocurrency platform integrating a blockchain token, social network, and referral-based model of expansion. For some, it’s an evolutionary step towards crypto mass adoption, but for others, its authenticity is doubtful and it’s just a fancy marketing stunt.

Shocked by the recent surge in popularity of cryptocurrency mining, Stanford PhDs founded Pi Network with a vision to make digital currency accessible to everyone with a smartphone so they could mine crypto without shelling out for costly hardware or using lots of energy. They wish to build the world’s most inclusive peer-to-peer network.

Although the network has drawn an enormous amount of users worldwide, whether it is legitimate and will be valuable in the future continues to be intensely argued among crypto enthusiasts.

What is Pi Network?

Pi Network is essentially a blockchain project that allows users to mine Pi coins directly from their smartphones. Unlike traditional cryptocurrencies like Bitcoin, which require energy-intensive computations, Pi can be mined simply by tapping a button once every 24 hours in the app. No battery drain, no advanced hardware, and no technical expertise required.

The native token, Pi, remains non-transferable outside the ecosystem until the network’s open mainnet goes live. As of 2025, Pi Network is still in the enclosed mainnet phase, meaning Pi coins can only be used within approved Pi apps or transferred among KYC-verified users. Pi has not yet been listed on major public exchanges, which continues to raise concerns about its actual market value.

The anticipated open mainnet is expected to bring full utility to Pi coins by allowing external trading and interaction with the broader blockchain ecosystem. Until then, users can earn, store, and use Pi within the confines of the network’s sandboxed environment.

Fun Fact: Pi Network launched on March 14 (3/14), also celebrated as Pi Day, a nod to the mathematical constant π.

How Pi Network Works

Mining Pi may seem easy on the surface, but getting started involves a social layer. To join, new users need an invitation code from an existing member. This referral-based growth model not only controls access but also incentivizes users to recruit others.

Once inside, users earn Pi by simply tapping a “Lightning” button in the app every 24 hours. The referral system enhances mining speed, the more active referrals in your network, the more Pi you can mine.

This model closely mirrors multilevel marketing in its structure, though the team claims it’s built primarily for community growth rather than profit.

Pi Network Roles

Members of Pi Network can take on various roles to increase their mining rate:

• Pioneer: The default role; users earn Pi by checking in daily and tapping the mining button.
• Contributor: Unlocks higher mining rates by adding 3–5 trusted users to a Security Circle.
• Ambassador: Earns a 25% boost per active referral, encouraging network expansion.
• Node: Runs Pi Node desktop software to help decentralize and validate the network. This role is still under testing but is crucial for the transition to open mainnet.

Users can take on multiple roles, and earlier adopters generally earn at a higher base rate compared to those who joined later.

Current Status in 2025

As of now, Pi Network is still not listed on major exchanges, and users cannot cash out their Pi coins unless through internal barter platforms or informal peer trades. While the development team frequently assures that open mainnet is on the horizon, delays and lack of transparency have fueled ongoing skepticism.

Despite concerns, Pi Network has rolled out a growing ecosystem of apps where Pi can be used for services, gaming, and digital goods. Whether Pi evolves into a usable currency or fades as another crypto experiment remains to be seen — but it continues to command the attention of millions.

Pi Network Consensus Algorithm

Pi Network uses a consensus model inspired by the Stellar Consensus Protocol (SCP). This algorithm is energy-efficient and allows network participants to reach agreement through trusted nodes, rather than relying on power-intensive proof-of-work mechanisms like Bitcoin.

So, how can someone “mine” cryptocurrency by simply tapping a button daily?

In Pi Network, the term “mining” refers to earning token vouchers through user engagement and participation rather than performing computational tasks. Unlike traditional mining, which involves solving complex mathematical problems, Pi Network rewards users with PI coin vouchers for proving daily activity and human verification.

As of January 2025, no actual cryptographic mining occurs. Instead, users are helping to build a trust graph by forming Security Circles, which will later support transaction validation when the open mainnet is officially launched.

Storing and Moving Pi Coins

Since the open mainnet launched in late February 2025, Pi tokens are now officially transferable and tradable, assuming users have completed KYC verification.

Users can now:

• Transfer Pi to other verified users
• Use Pi in the app’s growing ecosystem
• Engage in trades on select decentralized exchanges (DEXs) where Pi has begun appearing

That said, Pi’s listing on major centralized exchanges is still pending. In the meantime, earlier Pi IOU tokens have declined in relevance and value, and some platforms have suspended their trading.

Did you know? Pi mining on mobile remains extremely light on resources—using minimal battery and data, unlike traditional mining systems.

Should You Trust the Pi Network?

Pi Network has now transitioned from its enclosed mainnet to an open mainnet phase, which is a critical milestone. Users can send and receive Pi, use it within the ecosystem, and prepare for broader exchange integrations.

However, it’s too early to declare Pi a fully realized cryptocurrency success story. Key factors to watch in the coming months include:

• Official exchange listings
• Market price stability
• Community engagement in PiApps and ecosystem growth
• Independent code and economic audits

So, is Pi Network a scam? As of today, no conclusive evidence suggests it is, but it remains a speculative project with high potential and equally high uncertainty. How well the team executes its next steps will determine whether Pi becomes a legitimate part of the crypto landscape or fades out as a well-orchestrated experiment.