The Pi Network app has reached a significant milestone, with over 10 million users completing the Know Your Customer (KYC) process to verify their identities, according to an announcement on April 16. The Pi team has set a series of milestones to be achieved before launching a mainnet and making its tokens tradeable, including reaching 15 million users who have passed KYC. With 10 million accounts already verified, it suggests that the KYC target will be met once another 5 million users complete the verification process.
Despite this accomplishment, business analytics platform AIMultiple has expressed skepticism about the value Pi brings to its users. The platform argues that Pi offers no value since users are unable to exchange their Pi coins for fiat currency on exchanges. Pi Network was initially launched in 2019 as a centralized app, where users can mine Pi tokens by simply pushing a button in the app every day. Currently, Pi cannot be transferred to other users through a wallet.
According to the announcement, the 10 million verified users, referred to as “Pioneers,” have completed identity verification using Pi KYC, the app’s native solution for identity verification. The announcement claims that Pi KYC employs a unique and proprietary approach that combines machine automation and crowdsourced, hyperlocal human verification to ensure secure, accurate, and efficient KYC.
Dr. Nicolas Kokkalis, co-founder and head of technology for Pi, asserts that this achievement demonstrates that the industry can succeed without relying on fiat services. He also believes that the new KYC system will enable other Web3 services that involve asset ownership to meet their identity verification requirements through Pi.
In December, the Pi team announced plans to launch an “Open Network” or mainnet in 2024, provided certain conditions are met. These conditions include the development of 100 Pi apps and the successful completion of KYC by 15 million users. Additionally, the team must have completed all necessary work in terms of technology, product, business, and legal aspects, and there should not be any unfavorable external factors that could hinder the network’s success. However, the team has not yet set a specific date for the mainnet launch.
Cem Dilmegani, an analyst from AIMultiple, argues that Pi Network is unlikely to benefit users significantly. He describes it as a direct selling or affiliate marketing system that promises future rewards to users for bringing in new users. According to Dilmegani, this affiliate marketing system drives traffic to the app, which, in turn, generates revenue from advertising for the app’s developer. Dilmegani suggests that the founders are already benefiting from the app, as they introduced optional video ads at its launch to monetize the active user base.
Dilmegani acknowledges that the Pi team could potentially launch a blockchain mainnet in the future. However, he believes this is unlikely because it would cause the token’s value to plummet as users sell it on the market. This, in turn, would diminish the app’s value to advertisers, potentially rendering it useless.
Cointelegraph reached out to the Pi team for comment, and a representative acknowledged that Pi has taken an unconventional and novel approach to blockchain development. The representative explained that instead of immediately launching an open network, Pi has implemented an intermediate Enclosed Network period of the mainnet. This approach aims to facilitate the development of utilities on the platform and the KYC processing of millions of community members, ultimately creating a robust network that benefits the entire community before launching the Open Network.
The representative emphasized that Pi has achieved multiple goals since its launch, including the creation of various components such as the Pi mining mobile app, Pi Browser mobile app for the Web3 ecosystem, Node application, Testnet and Mainnet blockchains, Wallet, developer platform, and a novel KYC solution. The representative argues that the decision to delay the launch of an open network was worthwhile, as it allowed for the necessary time and patience to ensure a healthy launch.
According to a report from Vietnamese media outlet vnExpress on March 3, 2021, Pi Network is the 22nd most downloaded iOS app in Vietnam. In May 2021, a Vietnamese news outlet reported that Pi had unintentionally exposed users’ identity card images to a hacker. However, a Pi Network spokesperson clarified that the app outsourced KYC to a third-party and did not store the data on its servers. There was no evidence of a data leak.