Pi Network explained and how to mine PI for free
Important Things First:
I will give you an overview to obtain free crypto. Every week i will publish one method and try to be as honest and accurate as possible without tricking you in advertisement infested websites or Pyramid Systems.
So lets start with this weeks pick:
Pi is a new cryptocurrency for and by everyday people that you can “mine” (or earn) from your phone.
To get a short Idea here is the PI Promotion Clip:
Project Team:
The Project is initialized byteam of Stanford graduates with the goal to bring Cryptocurrencies to all people.
Dr. Nicolas Kokkalis
Head of Technology
Stanford PhD and instructor of Stanford’s first decentralized applications class; combining distributed systems and human computer interaction to bring cryptocurrency to everyday people.
Dr. Chengdiao Fan
Head of Product
Stanford PhD in Computational Anthropology harnessing social computing to unlock human potential on a global scale.
The Pi Economic Model
Pi seeks to strike a balance between creating a sense of scarcity for Pi, while still ensuring that a large amount does not accumulate into a very small number of hands. We want to make sure our users mine more Pi as they make contributions to the network. Pi’s goal is to build an economic model that is sophisticated enough to achieve and balance these priorities while remaining intuitive enough for people to use.
Pi’s economic model design requirements:
Simple: Build an intuitive and transparent model
Fair distribution: Give a critical mass of the world’s population access to Pi
Scarcity: Create a sense of scarcity to sustain Pi’s price over time
Meritocratic mining: Reward contributions to build and sustain the network
Pi - Token Supply
Token Emission Policy
Total Max Supply = M + R + D
M = total mining rewards
R = total referral rewards
D = total developer rewards
M = ∫ f(P) dx where f is a logarithmically declining function
P = Population number (e.g., 1st person to join, 2nd person to join, etc.)
R = r * M
r = referral rate (50% total or 25% for both referrer and referee)
D = t * (M + R)
t = developer reward rate (25%)
M - Mining Supply (Based on fixed mining supply minted per person)
In contrast to Bitcoin which created a fixed supply of coins for the entire global population, Pi creates a fixed supply of Pi for each person that joins the network up to the first 100 Million participants. In other words, for each person that joins the Pi Network, a fixed amount of Pi is pre-minted. This supply is then released over the lifetime of that member based on their level of engagement and contribution to network security. The supply is released using an exponentially decreasing function similar to Bitcoin’s over the member’s lifetime.
R - Referral Supply (Based on fixed referral reward minted per person and shared b/w referrer and referee)
In order for a currency to have value, it must be widely distributed. To incentivize this goal, the protocol also generates a fixed amount of Pi that serves as a referral bonus for both the referrer and the referee (or both parent and offspring :) This shared pool can be mined by both parties over their lifetime - when both parties are actively mining. Both referrer and referee are able to draw upon this pool in order to avoid exploitative models where referrers are able to “prey” on their referees. The referral bonus serves as a network-level incentive to grow the Pi Network while also incentivizing engagement among members in actively securing the network.
D - Developer Reward Supply (Additional Pi minted to support ongoing development)
Pi will fund its ongoing development with a “Developer Reward” that is minted alongside each Pi coin that is minted for mining and referrals. Traditionally, cryptocurrency protocols have minted a fixed amount of supply that is immediately placed into treasury. Because Pi’s total supply is dependent on the number of members in the network, Pi progressively mints its developer reward as the network scales. The progressive minting of Pi’s developer reward is meant to align the incentives of Pi’s contributors with the overall health of the network.
f is a logarithmically decreasing function - early members mine more
While Pi seeks to avoid extreme concentrations of wealth, the network also seeks to reward earlier members and their contributions with a relatively larger share of Pi. When networks such as Pi are in their early days, they tend to provide a lower utility to participants. For example, imagine having the very first telephone in the world. It would be a great technological innovation but not extremely useful. However, as more people acquire telephones, each telephone holder gets more utility out of the network. In order to reward people that come to the network early, Pi’s individual mining reward and referral rewards decrease as a function of the number of people in the network. In other words, there is a certain amount of Pi that is reserved for each “slot” in the Pi Network.
The Token
Right now PI Tokens are not tradeable since the Project ist still in phase 2. When Mainnet is starting all mined tokens can be claimed and traded by performing a KYC.
One of the biggest challenges on the internet is knowing who to trust. Today, we rely on the rating systems of providers such as Amazon, eBay, Yelp, to know who we can transact with on the internet. Despite the fact that we, customers, do the hard work of rating and reviewing our peers, these internet intermediaries capture the lionshare of the value created this work.
Pi’s consensus algorithm, described above, creates a native trust layer that scales trust on the web without intermediaries. While the value of just one individual’s Security Circle is small, the aggregate of our individual security circles build a global “trust graph” that help people understand who on the Pi Network can be trusted. The Pi Network’s global trust graph will facilitate transactions between strangers that would not have otherwise been possible. Pi’s native currency, in turn, allows everyone who contributes to the security of the network to capture a share of the value they have helped create.
The Mining
Basic Mining Rate is 0,1 Pi per hour. The Mining Rate can be raised by the following ways:
Invite new users - Every User raises your Mining Rate by 0,02 Pi per hour.
Build a Security Circle - Define 3-5 trusted Users from your mining circle. Can only be performed when you have done 3 mining sessions a 24 hours
Run a Node - Run a Node on your computer or server (in this phase not available)
Mining does not use your phones battery or resources all you have to do is starting the mining session once per 24 hours.
There are four roles Pi users can play, as Pi miners. Namely:
Pioneer. A user of the Pi mobile app who is simply confirming that they are not a “robot” on a daily basis. This user validates their presence every time they sign in to the app. They can also open the app to request transactions (e.g. make a payment in Pi to another Pioneer)
Contributor. A user of the Pi mobile app who is contributing by providing a list of pioneers he or she knows and trusts. In aggregate, Pi contributors will build a global trust graph.
Ambassador. A user of the Pi mobile app who is introducing other users into Pi network.
Node. A user who is a pioneer, a contributor using the Pi mobile app, and is also running the Pi node software on their desktop or laptop computer. The Pi node software is the software that runs the core SCP algorithm, taking into account the trust graph information provided by the Contributors.
Bitcoin uses the first type of consensus algorithm: All bitcoin nodes are competing against each other in solving a cryptographic puzzle. Because the solution is found randomly, essentially the node that finds the solution first, by chance, is elected the leader of the round who produces the next block. This algorithm is called “Proof of work” and results in a lot of energy consumption.
Pi uses the other type of consensus algorithms and is based on the Stellar Consensus Protocol (SCP) and an algorithm called Federated Byzantine Agreement (FBA). Such algorithms don’t have energy waste but they require exchanging many network messages in order for the nodes to come to “consensus” on what the next block should be. Each node can independently determine if a transaction is valid or not, e.g. authority of making the transition and double spending, based on the cryptographic signature and the transaction history. However, for a network of computers to agree on which transactions to record in a block and the order of these transactions and blocks, they need to message each other and have multiple rounds of voting to come to consensus. Intuitively, such messages from different computers in the network about which block is the next would look like the following: “I propose we all vote for block A to be next”; “I vote for block A to be the next block”; “I confirm that the majority of the nodes I trust also voted for block A”, from which the consensus algorithm enables this node to conclude that “A is the next block; and there could be no block other than A as the next block”; Even though the above voting steps seem a lot, the internet is adequately fast and these messages are lightweight, thus such consensus algorithms are more lightweight than Bitcoin’s proof of work. One major representative of such algorithms is called Byzantine Fault Tolerance (BFT). Several of the top blockchains today are based on variants of BFT, such as NEO and Ripple.
Pi aims to be the world’s most widely used and distributed cryptocurrency. To achieve that goal, Pi incentivizes its earliest members to make contributions that will ensure its success (e.g., securing and growing the network). To reflect the importance of early contributions, the rate of mining decreases as more people join the network. At this time, the base rate of mining halves every time the number of active users increases by a factor of 10 (see graph below). This rate will eventually fall to 0 when the network reaches a certain number of users (e.g. 10 million or 100 million). At that point, just like Bitcoin, miners will continue to be rewarded through transaction fees and not through the minting of new currency.
How to start?
First go to:
Download the PI Network App and create a new Profile for PI use the Invitation Code:
tfcryptoguy
You need the invitation code otherwise you are not able to sign up. You will be rewarded with 1 PI right from the start. Aditionally you help me continuing my work ofv bringing you hopefully awesome content.
Conclusion
I can highly recommend participating in this project since it is very interesting and shows all signs and potential to grow in something big (perhaps the next big thing)
In case you ar looking for secure and proven ways to gain a little bit of extra crypto, please check out my other posts:
Earning Crypto with Play-to-Earn Plattform Womplay
Earning Free Crypto with Coinbase Earn
Earning Bitcoin by Daily Steps & Games in sMiles App
If you have any recommendations for a free service to test or a scam site to be added on this list, feel free to write me in the comments or write me an E-Mail: thefreecryptoguy@gmail.com