What is Pi Network?

Pi Network is a crypto and blockchain project that runs on a mobile-first platform, allowing users to “mine” it's token (Pi) via a smartphone app.. It was officially launched on March 14, 2019 – Pi Day – as a nod to the mathematical constant π.

The project was created by a team of Stanford University PhDs and graduates, led by Dr. Nicolas Kokkalis and Dr. Chengdiao Fan, with the aim of making crypto accessible to everyday people. Pi Network’s mission is to build the world’s most inclusive peer-to-peer ecosystem, leveraging a widely distributed crypto that anyone can mine on their phone.

Founding Team and History - Pi Network’s core team was initially composed of Stanford researchers. Dr. Nicolas Kokkalis (Head of Technology) is a computer scientist who taught Stanford’s first decentralized applications class in 2018, and Dr. Chengdiao Fan (Head of Product) is an anthropologist focusing on online social systems.

Together, they launched the Pi Network app in 2019, aiming to combine academic insights with real-world practice. The network quickly grew through grassroots adoption. By the end of its beta phase, Pi had over 3.5 million users, and it continued expanding globally in the following years.

How does the Pi Network work?

Pi Network operates its own blockchain, which in its current form is based on a variant of the Stellar Consensus Protocol (SCP). This means Pi uses a form of federated Byzantine agreement – a consensus algorithm that doesn’t require energy-intensive Proof of Work mining. In the Pi blockchain, nodes reach an agreement on the validity of transactions through a quorum-based trust system. Each participant can form a “Security Circle” of trusted members, and these overlapping circles create a global trust graph used to verify transactions and secure the ledger.

In simpler terms, Pi’s consensus relies on a web of trusted relationships among users, rather than brute-force computing. This approach is derived from the Stellar blockchain’s design, but Pi adapts it to allow everyday devices (like mobile phones and laptops) to serve as nodes.

The goal is a decentralized network where anyone can participate in validation if they are trusted by others, making it highly accessible while still preventing fraudulent transactions.

Pi’s architecture closely follows a typical blockchain structure: transactions are signed by users’ private keys, broadcast to the network, and grouped into blocks that nodes validate and add to the ledger. Thanks to SCP consensus, Pi’s node consensus process is relatively lightweight – nodes exchange messages to come to an agreement, rather than engaging in hashing competitions.

This should allow Pi to process transactions with minimal fees and energy usage.

How Pi Network Mining Works?

Mining Pi is radically different from mining Bitcoin or other traditional cryptos. Pi Network introduced an “energy-light” mobile mining mechanism. Practically, mining Pi involves opening the Pi app on a smartphone and tapping a button once every 24 hours to activate your mining session.

When you tap the “Lightning” icon in the app, you begin earning Pi at a preset rate per hour. No special hardware or continuous processing is required – the app can even be closed and it will still credit Pi for that session. This design is intentional: Pi mining is more about proof of participation and proof of personhood (showing that you’re a real, engaged human) than about solving cryptographic puzzles.

Importantly, mining Pi costs nothing – it doesn’t drain battery or use noticeable data, as the heavy lifting of consensus is done by separate nodes, not your phone. The app does, however, show ads (which is how the Pi Core Team earns revenue to fund development, rather than charging fees from users).

Roles and Rewards:

• Pioneer: Every user is by default a Pioneer – simply someone who mines by tapping the app daily. This gives a base mining rate for being an active participant.
  
  
• Contributor: After you’ve mined for at least 3 days, you can become a Contributor by building a Security Circle of 3-5 trusted members. Doing so earns you an increased rate because you are contributing to the network’s security by validating other real users.
  
  
• Ambassador: If you invite new users to Pi, you become an Ambassador. For each person who joins with your referral code, both you and the new member get a bonus – up to a 25% boost to your base mining rate as long as they remain active. This referral program is a key growth strategy: the more people you bring in, the more Pi you mine. (Notably, Pi requires an invitation code to join at all, which inherently makes every new user part of someone’s referral team.
  
  
• Node: Users who install the Pi Node software on a desktop or laptop and meet certain technical requirements can become Node operators. Nodes participate in running the testnet (and now the mainnet) by validating transactions and blocks, and they will earn additional Pi for contributing computing resources and securing the blockchain. The Node role is crucial for decentralization – Pi had over 10,000 community nodes on its testnet, and with mainnet open, community nodes will form the backbone of the Pi network consensus.

Comparison with Traditional Crypto Mining:

• No Proof-of-Work: Bitcoin (and Ethereum before it transitioned to proof-of-stake) requires miners to perform intense computational work, consuming significant electricity, to solve math problems and add blocks. This Proof-of-Work (PoW) approach secures the network but has been criticized for energy consumption. Pi, on the other hand, uses no PoW at all – mining does not involve solving any puzzles or using your device’s CPU/GPU. In fact, Pi’s consensus (SCP) doesn’t “mine” new coins through competition; new Pi is minted as a function of social trust and engagement. Thus, Pi mining is extremely energy-efficient. According to Pi’s team, mobile mining “barely uses any battery or data”, making it “one of the most eco-friendly ways to mine.”​ This is a stark contrast to Bitcoin, where mining has become an industrial endeavor requiring specialized ASIC hardware and cheap power sources.
  
  
• No Proof-of-Stake Requirements: Modern networks like Ethereum now use Proof-of-Stake (PoS) where validators must lock up a large amount of crypto as collateral to produce blocks. This creates a financial barrier to participation (you need tens of thousands of dollars worth of ETH to be an effective validator). Pi Network does not require staking or any monetary investment to mine. The “stake” one puts in is instead their time, personal network, and identity verification. This lowers the barrier to entry dramatically – anyone with a phone can contribute, even if they have no money to invest. Pi’s creators argue this model is more inclusive and can reach people left out by PoW and PoS systems.
  
  
• Rate of Rewards: In Bitcoin, mining rewards are fixed per block (and halved every four years), and only one miner (or pool) wins those rewards each block. In Pi, rewards are shared among all active miners in proportion to their rates. There is no competition or “race” to mine a block among mobile users; instead, if you press the button and participate honestly, you will get your share of Pi for that time period. This removes the rivalry and wasted effort found in PoW mining and replaces it with a cooperative model where everyone can win as long as they contribute. However, it’s important to note that during the closed phase, these rewards were virtual – users accumulated balances, but those coins couldn’t be traded or used externally yet. Only with the mainnet opening up are Pi’s mining rewards becoming a liquid currency.
  
  
• Hardware & Cost: Traditional mining often incurs costs for hardware, electricity, and cooling, which can run miners hundreds or thousands of dollars and has led to mining being dominated by those who can afford large operations. Pi requires no upfront cost – the app is free, and the main resource you invest is a few seconds of attention each day. This makes Pi more like a loyalty or engagement program in some respects, as opposed to an investment or work endeavor. It also introduces the risk that some users might create multiple fake accounts to “earn” more Pi, which is why Pi’s emphasis on one account per person and KYC is so important for fairness.

Tokenomics of Pi Network

Pi Network’s tokenomics model is designed to prioritize community ownership and ensure sustainable ecosystem growth, as outlined in its March 2019 whitepaper. The total maximum supply of Pi is capped at 100 billion tokens, with an 80/20 distribution split—allocating the majority to the community, while the Pi Core Team retains a smaller portion.

Token Distribution
Community Allocation (80%)

The Pi Network community receives 80 billion Pi tokens, divided into three key categories:

Mining Rewards (65 billion Pi):

• This represents the largest share, designated to reward active users over time.
• Approximately 30 billion Pi was mined before the Mainnet launch, but KYC verification may reduce this to 10-20 billion Pi.
• The remaining supply will be distributed through a new Mainnet mining mechanism, featuring gradually decreasing annual limits to ensure long-term sustainability.

Community Organization & Ecosystem Building (10 billion Pi):

• Managed by the Future Pi Foundation, this allocation supports community events, developer grants, and initiatives to drive network engagement and ecosystem expansion.
• Funds will contribute to decentralized application (dApp) development and other ecosystem-enhancing projects.

Liquidity Pool (5 billion Pi):

• Set aside to ensure liquidity within the Pi ecosystem.
• Supports smooth transactions and facilitates accessibility for Pioneers and developers.

Core Team Allocation (20%)

The Pi Core Team receives 20 billion Pi as compensation for developing and maintaining the network.

• This allocation unlocks gradually, in sync with community mining progress.
• Additional lockup conditions may be imposed by the Core Team to maintain network stability.

Mining Reward Structure

Pi Network’s mining rewards decline over time to encourage early adoption while ensuring sustainability:

Declining Yearly Supply Limit:

• Each year’s mining rewards limit is lower than the previous year’s to regulate supply.

Granular Time Epochs:

• Supply limits may be calculated on a daily or even smaller timeframes, influenced by factors like lockup ratios and remaining supply.

Enhanced Rewards for Diverse Contributions:

• Beyond basic mining, Pioneers can earn rewards for:
  ✔ App usage
  ✔ Node operation
  ✔ Locking up Pi tokens

This tokenomics model ensures fair distribution, encourages long-term participation, and promotes a thriving ecosystem.

Summary

In summary, Pi Network’s mining process trades off the provable computational work of PoW for a model based on human verification and social networks, which is novel in the crypto space. It prioritizes accessibility and broad distribution of the currency over the immediate establishment of market value or mining revenue.

For users, Pi provided an easy entry into crypto without financial risk. Many users have accumulated Pi over time, and if Pi attains a good market value, that’s essentially a free reward for their participation.

The future prospects of Pi Network are cautiously optimistic. The project has cleared a major hurdle by launching its open network and putting Pi in the hands of users as a real currency.