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In a significant development, the Pi Network app has surpassed 10 million users who have verified their identities by completing the Know Your Customer (KYC) process. This achievement, announced on April 16, brings the project one step closer to its goal of 15 million KYC’d users, a requirement for the launch of the project’s mainnet and the traceability of its tokens.
Despite this milestone, concerns remain about the value Pi Network can bring its users, as the Pi tokens cannot currently be exchanged for fiat currency on cryptocurrency exchanges.
A Unique KYC Approach But An Unclear Path To Utility
The Pi team has touted its proprietary KYC solution as a “unique and proprietary approach that combines machine automation and crowdsourced, hyperlocal human verification to accomplish secure, accurate, and efficient KYC.” The team claims that other Web3 services could leverage this approach for identity verification.
However, the need for token tradability remains a significant obstacle. According to the business analytics platform AIMultiple, Pi Network “can not yet exchange their Pi coins with fiat currency on exchanges,” suggesting that the project may not bring “any value to users” at this stage.
Conditions For Mainnet Launch & The Concerns Raised
The Pi Network team has announced plans to launch an “Open Network” or mainnet in 2024, provided certain conditions are met. These include developing 100 Pi apps, completing 15 million KYC verifications, and fulfilling various technological, product, business, and legal requirements.
AIMultiple analyst Cem Dilmegani expressed skepticism about the project’s potential benefits, stating that Pi Network “works like a direct selling or affiliate marketing system, promising future rewards to users for bringing in new users.” Dilmegani suggested that the app’s primary purpose is to drive traffic and sell advertising, with the founders being the primary beneficiaries.
The analyst also raised concerns about the potential for the token’s value to plummet if a mainnet is launched, as users may rapidly sell their holdings, reducing the token’s value and eliminating the incentive for users to continue logging in and clicking.
Pi Network’s Response & Unconventional Approach
In response to Cointelegraph’s inquiries, a Pi Network representative acknowledged the project’s “unconventional and novel” approach to blockchain development. The representative argued that the “Enclosed Network period of mainnet” was intentionally chosen to enable utility building and KYC processing before launching the open network.
The representative claimed that Pi had accomplished several goals, including creating a mining app, browser, node application, testnet, mainnet, wallet, and developer platform. The representative stated that the delay in launching the open network was to ensure a “healthy launch of the Open Network” and that “anything worthwhile takes time and patience”.
The Future Remains Uncertain
While Pi Network has achieved the significant milestone of 10 million KYC’d users, the project’s lack of token tradability and analysts’ concerns about its potential value proposition raise questions about its long-term viability and adoption. As the team works towards the mainnet launch, the cryptocurrency community will closely watch to see if Pi Network can deliver on its promises and provide tangible benefits to its users.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
