The Pi Network app has reached a significant milestone, with over 10 million users successfully completing the Know Your Customer (KYC) process to verify their identities. This announcement was made on April 16. The Pi team has set a series of milestones that, once achieved, will lead to the launch of a mainnet and the ability to trade Pi tokens. One of these milestones is the verification of 15 million users through KYC. With 10 million accounts already verified, it suggests that the KYC goal will be met once an additional 5 million users complete the verification process.
Despite this accomplishment, business analytics platform AIMultiple has cast doubt on the value of Pi for its users. According to AIMultiple, Pi offers no value as users are currently unable to exchange their Pi coins for fiat currency on exchanges. Pi Network was initially introduced in 2019 as a centralized app. Users generate Pi tokens by simply pushing a button within the app each day, but these tokens cannot be transferred to other users through a wallet at the moment.
The announcement states that the 10 million users, referred to as “Pioneers,” have completed identity verification using Pi KYC, the app’s native identity verification solution. Pi KYC combines machine automation and crowdsourced, hyperlocal human verification to ensure secure, accurate, and efficient KYC procedures, according to the announcement.
Dr. Nicolas Kokkalis, co-founder and head of technology for Pi, believes that this achievement demonstrates that the industry does not need to rely on fiat services to succeed. He also claims that the new KYC system will enable other Web3 services that involve asset ownership to fulfill their identity verification requirements through Pi.
In December, the Pi team announced plans to launch an “Open Network” or mainnet in 2024, subject to certain conditions being met. These conditions include the development of 100 Pi apps, in addition to the verification of 15 million users through KYC. The team must also complete all necessary technological, product, business, and legal work for the network’s launch, and there should be no unfavorable external factors that would hinder its success. However, a specific date for the mainnet launch has not yet been announced.
AIMultiple analyst Cem Dilmegani argues that Pi Network is unlikely to benefit users significantly. According to Dilmegani, the app functions as a direct selling or affiliate marketing system, offering future rewards to users for bringing in new users. This system is used to drive traffic to the app, which in turn generates advertising revenue for the developer. Dilmegani claims that the founders are already benefiting from the app, as they introduced optional video ads at launch to monetize the active user base.
Dilmegani acknowledges that the Pi team could potentially launch a blockchain mainnet, but he believes this is unlikely as it would cause the token’s value to rapidly decline when users start selling it on the market. This could potentially eliminate the app’s value to advertisers if users stop logging in and clicking on ads.
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 the decision to have an intermediate Enclosed Network period before launching an open network was made to enable the development of utilities on the platform and the processing of KYC for millions of community members. This approach aims to build a robust network for the entire community before the Open Network is launched.
The representative also highlighted the accomplishments of Pi since its launch, including the creation of various components such as the Pi mining mobile app, Pi Browser mobile app, Node application, Testnet and Mainnet blockchains, Wallet, developer platform, and a novel KYC solution. The representative emphasized that the decision to delay the launch of an open network was worthwhile, as they believe that time and patience are necessary for a successful 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 a data breach where images of users’ identity cards were leaked to a hacker. However, a Pi Network spokesperson clarified that the app outsources KYC to a third-party and does not store this data on its servers. There was no evidence of a data leak.