What is Pi Network? The White Paper of the Pi Digital currency

As the world becomes increasingly digital, cryptocurrencies are the next natural step in the development of money. Pi is the first digital currency for everyday people, representing a huge step forward in crypto adoption around the world.

Our mission: Build smart contracts and crypto platforms that are secure and operated by everyday people.

Our vision: World’s most comprehensive peer-to-peer market building, powered by Pi, the world’s most widely used cryptocurrency

DISCLAIMER for more advanced readers: Because Pi Network’s mission is as inclusive as possible, we will take this opportunity to introduce new entrants to our blockchain into the rabbit hole 🙂

Introduction: Why cryptocurrencies are important

Currently, our daily financial transactions rely on a trusted third party to maintain transaction records. For example, when you do a banking transaction, the banking system keeps records and ensures that the transaction is safe and reliable. Likewise, when Cindy transfers $ 5 to Steve using PayPal, PayPal maintains a central record of $ 5 debited from Cindy’s account and $ 5 credited to Steve’s account. Intermediaries such as banks, PayPal, and other members of the current economic system play an important role in regulating the world’s financial transactions.

However, the role of these trusted intermediaries also has limitations:

1. Arrest unfair value. These middlemen accumulate billions of dollars in wealth creation (PayPal’s market cap is ~ $ 130 billion), but transfers little to nothing. customer of them – everyday people on the ground, money-rich people who play an important role in the global economy. More and more people are lagging.
2. Fees: Banks and companies charge large fees to facilitate transactions. These fees often disproportionately impact lower-income populations, who have the fewest alternatives.
3. Censorship: If a particularly trusted intermediary decides that you cannot transfer your money, it could put restrictions on your money transfer.
4. Licensed: A trusted middleman acts as a gatekeeper who can optionally prevent anyone from joining the network.
5. Pseudonym: At a time when privacy becomes increasingly critical, these powerful gatekeepers may unintentionally reveal – or force you to disclose – more financial information about yourself than you can. want.
6. Bitcoin’s “peer-to-peer cryptosystem”, launched in 2009 by an anonymous programmer (or group) Satoshi Nakamoto, is a turning point for monetary freedom. For the first time in history, people can securely exchange value without requiring a trusted third party or intermediary. Paying in Bitcoin means people like Steve and Cindy can pay each other directly, bypassing institutional fees, obstructions, and intrusions. Bitcoin is truly a currency without boundaries, providing energy and connecting a new global economy.

An Introduction to the Distributed Ledger

Bitcoin achieves this historic feat by using it as one record scatter. While the current financial system relies on traditional central records of truth, Bitcoin records are maintained by a distributed community of “validators”, who access and update the public ledger. this declaration. Imagine the Bitcoin protocol as a globally shared “Google Sheets” containing a record of transactions, validated and maintained by this distributed community.

Bitcoin’s foray (and blockchain technology in general) is that, although the record is maintained by a community, this technology allows them to consistently reach a consensus on honest transactions, ensuring that The fraudster cannot record false transactions or bypass the system. This technological advancement allows the elimination of centralized intermediaries without compromising the security of transaction finance.

The Benefits of a Distributed Ledger

In addition to decentralization, bitcoin, or cryptocurrencies in general, let’s share some good features that make money smarter and more secure, although different cryptocurrencies may be stronger in some properties and weak. then in a number of other properties, based on different implementations of their protocol. Cryptocurrencies are held in crypto wallets which are identified by an address that is publicly accessible and secured with a very strong private password, known as a private key. This private key encrypts the transaction and is virtually impossible to generate a fraudulent signature. This provides calculation security and the possibility is not checked. Unlike traditional bank accounts that can be seized by the authorities, the cryptocurrency in your wallet can never be taken away by anyone without your private key. Cryptocurrencies have resistance to censorship Due to their decentralized nature, anyone can send transactions to any computer on the network to be recorded and authenticated. Cryptocurrency transactions are invariant since each transaction block represents a cryptographic proof (a hash function) of all previously existing blocks. When someone sends you money, they can’t steal their payments for you (i.e. no checks are bounced back on the blockchain). Several types of electricity bills death can even assist atomic transactions.“Smart contracts” built on top of these cryptocurrencies not only rely on laws to be enforced but are also executed directly through publicly audible code, making them zero. reliable and potentially eliminating middlemen in many businesses, such as Escrow for real estate.

Distributed Ledger Security (Mining)

One of the challenges of maintaining a distributed record of transactions is security – namely how to have an open and editable ledger while preventing fraudulent activity. To address this challenge, Bitcoin introduced a new process called Mining (using the “Proof of Work” consensus algorithm) to determine who is “trustworthy” to update delivery records. shared translation.

You can think of mining as a kind of economic game that forces “validators” to prove their ability when trying to add transactions to the record. To qualify, Validator must solve a series of complex computational puzzles. The person who validates the first puzzle will be rewarded with permission to post the latest block. Posting the latest block of transactions allows Validators to “mine” the Block Reward – currently 12.5 bitcoins (or ~ $ 40,000 at the time of writing).

The process is very safe, but it requires enormous computational power and energy consumption because users basically “burn money” to solve computational puzzles that help them earn more Bitcoins. The rate of the reward is so punishable that it is always beneficial for the validator to post honest transactions on Bitcoin’s records.

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Problem: The concentration of power and money makes Generation 1 Cryptocurrency out of reach

In the early days of Bitcoin, when there were only a handful of people working to validate transactions and mine the first blocks, anyone could earn 50 BTC just by running Bitcoin mining software on a machine. their individuality. As the coin started to gain popularity, smart miners realized they could make more money if there were more working computers to mine.

As Bitcoin continued to increase in value, an entire company began to open up for mining. These companies have developed specialized chips (“ASICs”) and built giant server farms that use these ASICs to mine Bitcoin. The emergence of these giant mining corporations fueled the Bitcoin Gold Rush, and made it difficult for everyday people to contribute to the network and receive rewards. Their efforts also started consuming large amounts of computer power, contributing to increasing environmental problems around the world.

The ease of Bitcoin mining and the subsequent proliferation of Bitcoin mining farms quickly created a large concentration of productivity and wealth in the Bitcoin network. To provide some context, 87% of all Bitcoin is now owned by 1% of their network, many of which were mined virtually free in the early days. Another example, Bitmain, one of Bitcoin’s biggest mining operations has earned billions of dollars in revenue and profit.

The centralization of power in the Bitcoin network makes it very difficult and costly for the average person. If you want to buy Bitcoin, your easiest options are:

1. Exploit yourself. Just connect dedicated hardware (this is a device on Amazon if you care!) And go to town. Just know that since you’ll have to compete with huge server farms from all over the world, consuming as much energy as Switzerland, you won’t be able to mine as much.
2. Buy Bitcoin on an exchange. Today, you can buy Bitcoin for a unit price of $ 3,500 per coin at the time of writing (note: you can buy small quantities of Bitcoins!) Of course, you also incur significant risks in doing so. So Bitcoin price is quite volatile.

Bitcoin was the first to show how cryptocurrencies can disrupt the current financial model, giving people the ability to conduct transactions without a third party obstructing them. The increase in freedom, flexibility, and privacy continues to drive the inevitable march toward digital currencies as the new norm. Despite its benefits, Bitcoin’s (possibly unintended) centralization of money and power creates a meaningful barrier to mainstream adoption. As the core team of Pi Network has conducted research to try to understand why people are reluctant to enter the crypto space. People continually see investment/mining risks as the main barrier to entry.

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Solution: Pi Network – Allows mining on mobile phones

After identifying the main barriers to adoption, the Pi Core Team started figuring out how to allow people to mine daily (or earn crypto rewards to validate transactions on distributed transaction records. mix). As a new part, one of the major challenges that arise with maintaining a distributed record of transactions is ensuring that updates to this open record are not fraudulent. While Bitcoin’s profile update process is proven (burning energy/money to prove trustworthy), it’s not user-friendly (or planetary!). For the Pi, we came up with the additional design requirement that using a consensus algorithm would also be extremely user-friendly and ideal for desktop and mobile mining.

When comparing existing consensus algorithms (the process of recording transactions into a distributed ledger), the Stellar Consensus Protocol emerges as the top candidate for mobile mining, user friendly. The Stellar Consensus Protocol (SCP) is structured by David Mazières, professor of Computer Science at Stanford, who is also Chief Scientist at the Stellar Development Foundation. The SCP uses a new mechanism known as the Federal Byzantine Agreement to ensure that updates to the distributed ledger are accurate and reliable. SCP is also deployed in the practice via the Stellar blockchain that has been around since 2015.

A Simple Introduction to Consensus Algorithms

Before moving to the introduction of the Pi consensus algorithm, there needs to be a simple explanation of what the consensus algorithm does for a blockchain and the types of consensus algorithms commonly used by today’s blockchain protocols. , for example, Bitcoin and SCP. This section is clearly written in a simplified manner for purposes of clarity and is incomplete. For more accuracy see the section Adapted to SCP below and read the article about the excellent consensus protocol.

Blockchain is a fault-tolerant distributed system that aims to organize the entire list of transaction blocks. Fault-tolerant distributed systems are an area of computer science that has been studied for decades. They are called distributed systems because they do not have a centralized server but instead contain a list of decentralized computers (called buttons or the computer at the same level ) that need to agree on the content and order of the blocks. They are also known as fault tolerance because they can tolerate a certain degree of faulty nodes in the system (for example, it is possible that up to 33% of the nodes could fail and the overall system continues. normal operation).

There are two major types of consensus algorithms: Algorithms that choose one node as a leader to create the next block and algorithms that don’t have a clear leader but all nodes come to a consensus on the next block What after exchanging votes by sending computer messages to each other? (Strictly speaking, the last sentence contains many inaccuracies, but it helps us explain the main points.)

Bitcoin uses the first kind of consensus algorithm: All Bitcoin nodes are competing with each other to solve a cryptographic puzzle. Because the solution is found at random, basically, the node that finds the first solution, by accident, is elected as the leader of the round, the creator of the next block. This algorithm is called “Proof of Work” and leads to much energy consumption.

A Simple Introduction to the Stellar Consensus Protocol

Pi Network uses a different type of consensus algorithm and is based on the Stellar Consensus Protocol (SCP) and an algorithm known as the Federal Byzantine Agreement (FBA). Such algorithms do not waste energy but they do require exchanging multiple network messages so that the nodes come to a “consensus” on what the next block should be. Each node can independently determine if a transaction is valid, such as the authority to execute conversions and double spend, based on the cryptographic signature and transaction history. However, in order for a computer network to agree on which transactions need to be recorded in a block and the order of the transactions and blocks, they need to inform each other and have multiple voting rounds to come to a consensus. Visually, suggestions we all vote for the next A block ”; “I vote let block A be the next block ”; “I confirm that the majority of nodes that I trust also vote for block A since then the consensus algorithm allows this node to conclude that “A is the next block, and there can be no block other than A as the next block ”; While the voting steps above may seem a bit overwhelming, the internet is fast enough and these announcements are light, so much consensus algorithms are lighter than Bitcoin’s proof of work. A major representative of such algorithms is called Byzantine Fault Tolerance (BFT). Some of today’s top blockchains are based on BFT variants, such as NEO and Ripple.

A major criticism of the BFT is that it has one centralization point: as with regard to voting, the set of nodes participating in the “quorum” vote is centrally determined by the system’s creator. system from the start. The FBA’s contribution is that, instead of having a centrally defined quorum, each node puts its own “quorum”, which in turn forms different quorum groups. New nodes can join the network in a decentralized way: they declare nodes they trust and convince other nodes to trust them, but they don’t have to convince any central authority.

SCP is a symbol of the FBA. Instead of burning energy like in Bitcoin’s proof of work consensus algorithm, SCP nodes secure the shared record by verifying that other nodes in the network are trustworthy. Each node in the network builds up a quorum, consisting of other nodes in the network that they consider to be reliable. Delegates are formed based on their member delegate segments, and a validator will only accept new transactions if and only if a proportion of the nodes among their delegates will also accept the assignment. that translation. As network-wide validators build their delegate groups, these delegate groups help nodes reach a consensus on transactions with the assurance of security. You can learn more about the Stellar Consensus Protocol by watching the technical summary of SCP.

Pi Network’s adaptation of the Star Consensus Protocol (SCP)

Pi Network’s consensus algorithm is built on top of SCP. SCP has been officially proven[Mazieres 2015] and is currently deployed within the Stellar Network. Unlike the Stellar Network which includes most companies and organizations (e.g. IBM) as nodes, the Pi Network intends to allow individual devices to contribute at the protocol level and receive rewards, including cell phones, laptops, and computers. Below is an introduction to how Pi applies SCP to allow individuals to exploit.

There are four roles that Pi Network users can play, as Pi miners. Specifically:

• Pioneers. One user of the Pi Network mobile app simply confirmed that they are not every day “robots”. This user authenticates their presence every time they log into the application. They can also open the app to request a transaction (for example, pay with Pi to another Pioneer)
• Contributors. A Pi Network mobile app user is contributing by providing a list of pioneers they know and trust. In general, the contributors to Pi will build a global trust chart.
• Ambassador. A mobile Pi Network app user is referring other users to the Pi network.
• Knot. Users are pioneers, and contributors who use the Pi Network mobile app and are also running the Pi button software on their desktop or laptop computers. The Pi node software is the software running the core SCP algorithm, taking into account the confidence graph information provided by the Contributor.

A user can play more than one of the above roles. All roles are required, so all roles are rewarded with a newly minted daily Pi as long as they have joined and contributed that day. Under the loose definition of a “miner” as a user who receives minted money as a reward for contributions, all four roles are considered Pi miners. We define “mining” more broadly than its traditional meaning of implementing a proof of work consensus algorithm like in Bitcoin or Ethereum.

First of all, we need to emphasize that the Pi Node software is not yet released. Therefore, this section is provided more as an architectural design and as a request for input from the engineering community. This software will be completely open source and it will also heavily depend on stellar-core which is also open-source software, available here. This means anyone in the community can read, comment on and suggest improvements to it. Below are the changes proposed by the Pi Network to the SCP to allow mining with individual devices.

Intersection

For readability we define one button as connected correctly is what the SCP refers to as one intact node. In addition, for readability, we define the Pi Network main as the set of all intact nodes in the Pi network. The main task of each Node is to be configured to correctly connect to the main Pi Network. Visually, a node that is incorrectly connected to the main network is similar to a Bitcoin node that is not connected to the main Bitcoin network.

In SCP terminology, for a node to be correctly connected means that the node must select an “algebraic slice” such that all the resulting algebra including this node intersects with the existing network algebra. More precisely, a v button _{n + 1} correctly connected to the primary network N out of the n nodes that were correctly connected (v _first, v 2,…, V _n ) if the resulting system N ‘consists of n + 1 nodes (v _first, v ₂,…, V _{n + 1} ) like the quorum intersection. In other words, N ‘prefers to intersect the quorum with any of its two delegates that share a node. – that is, with all the quorums U _first and U ₂, U _first ∩U ₂ ≠ ∅.

Pi Network’s main contribution to the current Stellar consensus implementation is that it introduces the concept of a trust chart provided by Pi Contributor as information that can be used by Pi nodes while they are set up. configure it to connect to the main Pi Network.

When selecting their quorum slices, these Nodes must consider the trust chart provided by Contributors, including their own secure circles. To support this decision, we plan to provide auxiliary graph analysis software to assist users running Nodes to make the best-informed decisions possible. The daily outputs of this software will include:

• the list of ranked nodes sorted by their distance from the current node in the confidence chart; A ranking of buttons is based on one PageRank Analysis of the nodes in the graph of trust
• list of nodes reported by the community to be faulty in any way list of new nodes trying to join the network
• list of most recent articles on the web about the keyword “Pi Network button malfunctioning” and other related keywords; The Node included Pi Network visualization is similar to what is displayed in the StellarBeat Quorum [source code] screen.
• a quorum explorer similar to QuorumExplorer.com [source code]
• a simulation tool like the one in the StellarBeat Quorum screen shows the expected impact on the connection of these nodes to the Pi Network when the configuration of the current node changes.

An interesting research issue for future work is developing algorithms that can review the reliability chart and suggest each node an optimal configuration, or even set it to automatically. During the first rollout of the Pi Network, while a user running Node could update their Node configuration at any time, they will be prompted to confirm their configuration on a daily basis and asked to update if they see fit.

Mobile application users

When a Pioneer needs to confirm that a certain transaction has been made (for example, they’ve received a Pi), they’ll open the mobile app. At that time, the mobile application connects to one or more Buttons to ask if the transaction has been recorded on the ledger and also to get the block number and the most recent hash value of that block. . If that Pioneer was also running a Node, the mobile app would connect to that Pioneer’s own node. If Pioneer doesn’t run a single button, the app will connect to multiple buttons and cross-check this information. Pioneers will have the ability to choose which buttons they want their apps to connect to. But to make it simple for most users, the application must have a reasonable set of default buttons, for example, some of the ones closest to the user based on the trust graph, along with a choice of Random high buttons in PageRank.

Mining rewards

One great feature of the SCP algorithm is that it is more generic than a block chain. It coordinates consensus on a distributed system of nodes. This means that the same core algorithm is not only used every few seconds to record new transactions in new blocks but can also be used to periodically run more complex calculations. For example, once a week, the star network is using it to calculate the inflation on the star network and proportionally allocates the newly minted tokens to all the stellar coin holders. Stellar is called lumens). In a similar manner, the Pi Network uses SCP once a day to compute the distribution of new Pi across the network across all Pi miners (pioneers, collaborators, ambassadors, nodes) that have been active. join any day. In other words,

By comparison, Bitcoin allocates the mining reward per block, and it awards all the rewards to a miner lucky enough to be able to solve a computationally intensive random task. This Bitcoin reward is currently 12.5 Bitcoin (~ $ 40K) given to only one miner every 10 minutes. This makes it difficult for any given miner to get a reward. As a solution to that, bitcoin miners are being held in centralized mining pools, all contributing processing power, increasing the likelihood of receiving rewards, and ultimately sharing those rewards. proportionate. The mining pools are not only the centralization point but their miners are also cut down on the number of individual miners. In Pi, there is no need for mining pools, as once a day, all contributors receive a worthy distribution of the new Pi.

Transaction fee

Similar to Bitcoin transactions, fees are optional in the Pi Network. Each block has a limit on the number of transactions that can be included in it. When there are no backlog transactions, the deals tend to be free. But if there are more transactions, nodes will order them by fee, with the highest-paying transactions at the top, and choosing only the top ones to be included in the generated blocks. This makes it an open market. Implementation: The fee is prorated among the Nodes once a day. Per block, the fee of each transaction is transferred to a temporary wallet so that at the end of the day the fee will be distributed to active miners for the day. This wallet has an unknown private key.

Restrictions and future work

SCP has been extensively tested for several years as part of the Stellar Network, at the time of writing it is the ninth-largest cryptocurrency in the world. This gives us a sizable degree of confidence in it. An ambition of the Pi Network project is to expand the number of nodes in the Pi Network to greater than the number of nodes in the Stellar network to allow more everyday users to participate in the core consensus algorithm. Increasing the number of nodes inevitably increases the number of network messages that have to be exchanged between them. Although these messages are much smaller than youtube images or videos, and today’s Internet can reliably transmit the video quickly, the number of notifications required increases with the number of participating buttons, This can become a bottleneck for the speed at which consensus is reached. This will ultimately slow down the speed at which new blocks and new transactions are recorded in the network. Thankfully, Stellar is currently much faster than Bitcoin. Currently, Stellar is calibrated to create a new block every 3 to 5 seconds, which can support thousands of transactions per second. For comparison, Bitcoin generates a new block every 10 minutes. Furthermore, due to Bitcoin’s lack of security, Bitcoin’s blockchain can in rare cases be overwritten within the first hour. This means Bitcoin users have to wait about 1 hour before they can be sure a transaction is deemed final. The SCP is secure, which means that after 3-5 seconds, one is sure of a transaction. So even with the bottleneck of potential scalability,

While SCP’s scalability is still an open research issue. There are many promising ways you can speed things up. One possible scalability solution is bloXroute. BloXroute proposes a distributed blockchain network (BDN) using a global network of servers optimized for network performance. While each BDN is centrally controlled by an organization, they provide a neutral message that can speed through. That is, BDNs can only serve all nodes fairly without being discriminated against for encrypted messages. This means that the BDN doesn’t know where the messages came from, where they went, or what the content is. In this way, Pi nodes can have two message transmission routes: One fast route over the BDN, which is supposed to be reliable most of the time, and its original peer-to-peer message communication interface is completely decentralized and reliable but slower. The intuition of this idea is almost identical to caching: Caching is where the computer can access data very quickly, increasing the average computation speed, but it is not guaranteed to always have all the information it needs. set. When the cache is missed, the computer slows down but nothing catastrophic happens. Another possible solution would be to use secure authentication of multicast messages in an open peer-to-peer network[Nicolosi và Mazieres 2004] to speed up the spread of messages among colleagues.

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Economic Model Pi: Balancing scarcity and access

Advantages and Disadvantages of the Generation 1 Economic Model

One of Bitcoin’s most impressive innovations is the combination of decentralized systems with economic game theory.

Advantages

• Fixed Supplies

Bitcoin’s economic model is very simple. Only 21 million Bitcoins will exist. This number is placed in the code. With just 21 million circulating out of 7.5 billion people worldwide, there isn’t enough Bitcoin to use. This scarcity is one of the most important drivers of Bitcoin’s value.

• Block Reward Reduction

Bitcoin’s distribution plan, illustrated below, further enforces this sense of scarcity. The Bitcoin block mining reward halves every 210,000 blocks (approximately once every 4 years.) During the early days, the Bitcoin block reward was 50 coins. Now, the reward is 12.5 and will continue to decrease to VND 6.25 by May 2020. Bitcoin’s declining distribution rate means that, even as currency awareness increases, there will be less to actually mine.

Defect

• Invert Means Not All

Bitcoin’s redistribution model (initially fewer people making more and more people making less today) is one of the main contributing factors to its uneven distribution. With so many bitcoins in the hands of some of the early adopters, new miners are “burning” more energy to have fewer bitcoins.

• Stockpiling Prohibited Use As Means of Exchange

Although Bitcoin was released as a “peer-to-peer” system, Bitcoin’s relative scarcity has hindered Bitcoin’s goal of becoming an intermediary exchange. Bitcoin’s scarcity has led to its perception as a form of “digital gold” or a store of digital value. The result of this perception is that many Bitcoin holders do not want to spend Bitcoin for daily expenses.

Economic model Pi

On the other hand, Pi Network seeks to strike a balance between creating a feeling of scarcity for the Pi, while ensuring that a large number does not accumulate into a very small number of hands. We want to make sure that our users earn more Pi when they contribute to the network. Pi Network’s goal is to build an economic model sophisticated enough to achieve and balance these priorities while still being intuitive enough for everyone to use.

Design requirements for the economic model of Pi:

• Simple: Build an intuitive and transparent model
• Fair distribution: Provides access to Pi by a significant number of the world’s population
• Scarcity: Creates a feeling of scarcity to maintain the price of the Pi over time
• Worthy income: Reward for contributions to build and maintain the network

Pi – Token Source

Token emission policy

1. Maximum arc = M + R + D
   1. M = total mining reward
   2. R = total referral reward
   3. D = total developer rewards
      
2. M = ∫ f (P) dx where f is the logarithmic reduction function
   1. P = Number of the population (eg first participant, 2nd person joined, etc.)
      
3. R = r * M
   1. r = referral rate (50% or 25% total for both referrer and referee)
      

4. D = t * (M + R)
5. t = developer reward rate (25%)

M – Mining Supply (Based on a fixed mining supply mined per person)

Contrary to Bitcoin, which creates a fixed money supply for the entire global population, Pi Network creates a fixed supply of Pi. for each network participant of up to 100 Million first participants. In other words, for each Pi Network participant, a fixed amount of Pi is pre-printed. This feed will then be released for the lifetime of that member based on their level of participation and contribution to cybersecurity. The supply is released using an exponential descending function similar to Bitcoin during the lifetime of the member.

R – Referral Supply (Based on a fixed referral reward calculated per person and a shared b / w referral and referee)

For a currency to have value, it must be widely distributed. To encourage this goal, the protocol also generates a fixed amount of Pi that can be used as a referral reward for both the referrer and the referee (or both parents and children 🙂 This shared group can be both. miners during their lifetime – when both parties are actively mining. Both the referrer and the referee can rely on this group to avoid exploitative models that the referrer can “bait” their referee. The referral reward serves as a network-level driving force for the development of the Pi Network while also encouraging members’ participation in actively protecting the network.

D – Developer Reward Supply (Additional Pi is minted to support continuous development)

Pi Network will finance its continued development with a “Developer Bonus” minted with each coin minted for mining and referrals. Traditionally, cryptocurrency protocols have created a fixed amount of supply that is immediately put into the coffers. Since Pi’s total supply depends on the number of members in the network, Pi Network gradually earns developer rewards as the network expands. The Pi’s developer reward progressive minting aims to align contributors to the Pi’s preferences with the overall health of the network.

f is a logarithmic reduction function – early members make more money

While the Pi Network seeks to avoid over-concentration of wealth, the network also seeks to reward earlier members and their contributions with a relatively larger portion of the Pi. When networks like Pi are in their early days, they tend to provide lower utility for participants. For example, imagine having the world’s first cell phone. It would be a great technological innovation but not extremely useful. However, as more people buy the phone, each owner gets more benefits out of the network. To reward early network participants, the Pi Network’s personal mining rewards 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 dedicated to each “position” in the Pi Network.

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Benefits: Synthesize and monetize our time online

Today, people are sitting on a truly untapped treasure trove of resources. Each of us spends hours of the day on our phones. While on our phones, every single view, post, or click of us generates phenomenal profits for large corporations. At Pi, we believe that everyone has the right to capture the value created out of their resources.

We all know that we can do more together than we can alone. On today’s web, large corporations like Google, Amazon, and Facebook have enormous leverage over individual consumers. As a result, they are able to capture the share of value created by individual consumers on the web. Pi leveled the playing field by allowing members to gather their collective resources so they could receive a share of the value they create.

The image below is Pi Stack, where we see particularly promising opportunities to help our members embrace value. Below, we go into more detail in each of these areas.

Introducing Pi Stack – Free up unused resources

Pi Ledger And Shared Trust Graph – Confidence Ratio On The Whole Web

One of the biggest challenges on the Internet is knowing who to trust. Today, we rely on a rating system of vendors like Amazon, eBay, and Yelp, to know who we can trade with on the internet. Despite the fact that we, the customer, do the hard work of rating and rating our peers, these internet middlemen capture the share of the value that created this job.

Pi’s consensus algorithm, described above, creates a root trust layer that extends trustworthiness across the web without an intermediary. Although the value of an individual’s Circle of Security is small, our collection of personal security circles builds a global “trust graph” that helps people understand who on the Pi Network. can be trusted. Pi Network’s global trust chart will facilitate transactions between strangers that would otherwise be impossible. In turn, Pi’s natural currency allows all contributors to the network’s security to capture a portion of the value they’ve helped create.

Pi Attention Market – Attention Exchange And Unused Time

Pi Network allows members to gather collective attention to create an attention market that is far more valuable than any individual’s own attention. The first application built on top of this class will be one Scarcity of social media channels is now stored on the main screen of the application. You can think of the Scarcity of social media channels like Instagram with one global post at a time. Pioneers can bet Pi to get the attention of other members of the network by sharing content (e.g. text, image, video) or asking questions to tap common wisdom. of the community. On the Pi Network, everyone has the opportunity to be an influencer or harness the wisdom of the crowd. So far, the Pi Network Core Team has used this channel to poll the community on design options for Pi (e.g. the community voted on the design and color of the logo. statue Pi). We received a lot of valuable feedback and feedback from the community on the project. One possible direction in the future is to open up the attention market for any Pioneers who use a Pi to post their content, while also expanding the number of channels hosted on the Pi Network.

In addition to exchanging attention with their peers, Pioneers may also choose to communicate with companies that are seeking their attention. The average American views between 4,000 and 10,000 ads per day. Companies fight for our attention and pay hefty sums of money for it. But we, the customers, get no value from these deals. In Pi’s attention-grabbing market, companies looking to approach Pioneers will have to compensate their audience at Pi. Pi Network’s advertising marketplace will be strictly opted-in and will give Pioneers the opportunity to monetize one of the largest untapped resources: their attention.

Pi’s Barter Marketplace – Build Your Personal Virtual Store Facade

In addition to contributing trust and interest in Pi Network, we want Pioneers to be able to contribute their unique skills and services in the future. Pi’s mobile app will also serve as the Point of Sale where Pi Network members can provide their untapped goods and services through the ‘virtual storefront’ to members. other by Pi Network. For example, a member offers an unused room in their apartment for rent to other members of the Pi Network. In addition to real assets, members of the Pi Network will also be able to offer skills and services through their virtual stores. For example, a member of the Pi Network can provide their programming or design skills on the Pi marketplace. Over time, the value of Pi will be supported by an increasing basket of goods and services.

Pi Network’s Decentralized App Store – Reduces Creative Entry Barriers

Pi Network’s shared currency, trust chart, and marketplace will be the foundation for a wider ecosystem of decentralized applications. Today, anyone wanting to start an application needs to restart its technical infrastructure and community from scratch. Pi Network’s decentralized application store will allow Dapp developers to take advantage of the existing Pi Network infrastructure as well as the shared resources of the community and users. Entrepreneurs and developers can propose new Dapps to the community with requests for access to the network’s shared resources. Pi Network will also build its Dapps with some degree of interoperability so that Dapps can reference data, assets, and processes in other decentralized applications.

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Governance – Cryptocurrencies have given to and by everyone

Challenges with Generation 1 Governance Models

Trust is the foundation of any successful monetary system. One of the most important factors creating trust is governance or the process of making changes to the protocol over time. Despite its importance, governance is often one of the most overlooked aspects of cryptocurrency economic systems.

First-generation networks like Bitcoin largely avoided formal (or “on-chain”) governance mechanisms but favored informal (or “off-chain”) mechanisms that arise from a mix of roles. and design incentives. By most measures, Bitcoin’s governance mechanism has been quite successful, allowing the protocol to grow significantly in size and value since its inception. However, there are also some challenges. Bitcoin’s economic concentration has led to a concentration of political power. As a result, everyday people can be caught in the midst of destructive battles between those who own giant Bitcoin. One of the most recent examples of this challenge is the ongoing war between Bitcoin and Bitcoin Cash. These civil wars could end in a fork where or where blockchain. For token holders, the hard fork is inflationary and can threaten the value of their holdings.

The governance model of Pi Network – a two-phase plan

In an article challenging the value of on-chain governance, Vlad Zamfir, one of the core developers of Ethereum, argued that blockchain governance is “ Not an abstract design problem. It’s an application social issue. “One of Vlad’s key points is that it is difficult to design” a priori “governance systems before observations of specific challenges arising from a particular political system. One historical example is the founding of the United States. The first experiment of democracy in the United States, the Articles of Confederation, failed after an eight-year trial. The founders of the United States were then able to draw the lessons of the Federal Clauses to build the Constitution – a much more successful experiment.

To build a long-term governance model, Pi Network will pursue a two-phase plan.

Provisional Governance Model (<5 Million Members)

Until the network reaches a significant number of 5 million members, Pi Network will operate under a temporary governance model. This model will closely resemble the “off-chain” governance models currently used by protocols like Bitcoin and Ethereum, with the Pi Network Core Team playing a pivotal role in guiding the development. of the protocol. However, Pi Network’s Core Team will still be heavily dependent on community contributions. The Pi mobile app itself is where the Pi Network core team captures community input and interacts with Pioneers. Pi accepts community comments and suggestions, made possible with features open to Pi Network landing page comments, FAQs, and whitepapers. Whenever people browse these documents on the Pi website, they can post a comment on a specific section right there to ask questions and make suggestions.

In addition, the Pi Network Core Group will develop a more formal governance mechanism. One potential governance system is liquid democracy. In liquid democracy, every pioneer will have the ability to vote on an issue directly or delegate their vote to another member of the network. A loose democracy will allow both generous and effective membership from the Pi community.

Pi Network’s “Constitution Convention” (> 5 Million Members)

After reaching 5 million members, a temporary committee will be formed based on previous contributions to the Pi Network. This committee will be responsible for soliciting and proposing proposals from and to the broader community. It will also host a series of online and offline chats where members of the Pi Network will be able to ponder Pi’s enduring constitution. With Pi Network’s global user base, Pi will enforce these conventions in multiple locations around the world to ensure accessibility. In addition to storing conventions directly, Pi Network will also use its mobile application as a platform to allow Pi Network members to participate in the process remotely. Whether meeting in person or online, Pi’s community members will have the ability to participate in the long-term governance structure of crafting the Pi Network.

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Implementation Roadmap / Plan

Phase 1 – Design, Distribution, Trust Graph Bootstrap.

The Pi Network server is acting as a tap that simulates the behavior of the decentralized system as it will come up after it is up and running. During this phase, improvements in user experience and behavior are possible and relatively easy to implement compared to the stable phase of the mainnet. All user minting will be routed to the live network once it launches. In other words, livenet will block all account holder’s balances created during Phase 1 and continue to function like the current system but fully decentralized. Pi is not listed on exchanges during this period and cannot “buy” Pi with any other currency.

Phase 2 – Testnet

Before we launch the mainnet, the Node software will be deployed on the test network. The test network will use the exact same trust graph as the main network but on the test Pi coin. Pi Network’s core team will host a number of nodes on the test network but will encourage more Pioneers to start their own nodes on the test network. In fact, for any nodes to join the mainnet, they should start on the test network. The test grid will be run in parallel with the Pi Network emulator in phase one and periodically, for example, daily, the results from both systems will be compared to capture network gaps and shortcomings. testing, this will allow Pi Network developers to propose and implement bug fixes. After running both systems simultaneously, the testnet reaches a state where its result always matches the emulator. At that point when the community felt ready,

Phase 3 – Mainnet

When the community feels the software is ready for production and it has been thoroughly tested on the testnet, the official Pi Network mainnet will be launched. An important detail is that, during the transition to the mainnet, only accounts that are verified as belonging to truly unique individuals will be honored. After this point, the Stage 1 Pi Network tap and emulator will be turned off and the system will resume itself permanently. Future updates to the protocol will be contributed by the Pi developer community and Pi’s core team and will be proposed by the committee. Their implementation and implementation will depend on the mining software update nodes like any other blockchain. There will be no central authority that controls the currency and it will be fully decentralized. Balances of fake or duplicate users will be discarded.