If you spend any time of twitter you may have notice the talk about pi network and the strange, maybe not even real, pump that occurred. When I first wrote about pi Economy, its price couldn't be tracked. Then because of some third party actor it got a ticker price and gained a huge amount of paper value almost out of nowhere.
Pi Network is controversial because of how opaque the project is, and that the developers are forcing their users to complete a Know Your Client process before their mined tokens can be migrated to a hot wallet. They call this process Mainnet. My take has always been that it is worth nothing until it isn’t and I will not undertake the KYC until the tokens are live. I will continue mining. Personally, I don’t mind willfully giving up my information in exchange for compensation. Its my view that being able to monetize your own data is the whole point and advantage of web3. It exists to kill the walled garden model.
A second criticism of PiNetwork is that the are seemingly creating liquidity out of nothing. A click of a button, a view of an add, and you mint a portion of a token. My number goes up about 4 pi per day. To add sketchiness to the program the PiNetwork also operates on a multi-level marketing scheme. Every person you invite to the app adds to your mining rate. Your top 10 invitees make up your “security circle” and your rate.
Like every free crypto play, they also want you to lock your tokens for a period of time after the wallets go live. Like a stock IPOs lock up period. This prevents the early adopters from dumping on the market and collapsing the price.
I have low expectations for what is actually going on behind the scenes but for arguments sake let’s give them the benefit of the doubt. If there is a finite amount of Pi that is minable and mining actually occurs, then there is one feature of pi that I had not really thought about until recently.
My total balance at time of writing is 4045 pi but I will never be able to migrate all of that. You see the KYC verification isn’t just necessary for you to move your Pi but your security circle also needs to be KYC verified for you to move the bonus tokens out. In reality I have much less than 4000 tokens, only 891 pi can be migrated if that day ever comes. This also means my real mining rate is much lower than advertised and will continue to decrease.
The majority of tokens will never migrate and the ones that do will be locked for an extended period. If Mainnet does occur and these tokens do trade the concern of “liquidity from nothing” may not be an issue at all.
I would imagine that for every 1 person mining like me there are 20 people who have given up. Even in my security circle, which are all people I know all but 2 of us have given up. Again, assuming that there is a finite amount of pi -which is unlikely- then it would be fair to assume that more than half the total amount of pi minted prior to Mainnet will be on the sidelines forever. Probably more. Basic economics says less supply price goes up.
Now this may also relate to braoder market cryptocurrencies in general. In the decade of cryptocurrency, how much value has been forgotten, or lost, or stuck on the sidelines. People most likely have died with an unknown amount of crypto. Tokens don’t get taken out of circulation and replaced with new tokens, like what happens with old bills. There is a perpetual ongoing slow token burn of forgotten crypto assets which will lead to a decrease in demand and hopefully and increase in value.
So while thinking about pi and the pi network I came up with the hypothesis:
Bitcoin although theoretically finite in supply, is actually decreasing in supply in practice. Recent charts that address how the percentage of Bitcoin that doesn't trade or is off the markets don't specify how much of that Bitcoin is not just off the market but gone forever. How many coins do you think are lost in the ether?
Also to be absolutely clear. I am not pushing pi. I do not think it is a good project. I was just thinking about crypto that is inaccessible and how that may affect models.
Let me know your thoughts or how wrong I may be.
If you want to start mining Pi here is my referral link: https://ca01.z.antigena.com/l/bUNT-vWyii82KEHdfPLA_kH40aUpos9HwKZTcpIYol_txtCGcEN5d~m~QtzH6vvBtAf239EQnQcfcbFnP-gxbkKcbQoPqbKKCmNXOs~9TtIiA8EWN8p_MWUo-wwoyeAyyA-ZcQeKs2ipyNDfTX9Qr7t7~lNq__3DlRub
As always you can join the conversation on Twitter @1BTCproject
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