Clearing Up The Top Misconceptions Of Pi Network

Misconceptions are too common in cryptoland — especially in mobile mining projects where the audience is new to crypto.

In today’s newsletter, we are dissecting common misconceptions around Pi Network, so you’ll have a better understanding in general.

THE 3 MOST COMMON MISCONCEPTIONS OF PI

Misconception #1: If The Price Of Pi Is Too Low, The Project Fails.

This statement is thrown around a lot. Actually, this statement is true to a certain extent because any cryptocurrency (or stock), if the price is too low, it could mean that people are not buying it, therefor the project is dead. This certainly doesn’t always happen.

In Pi’s case, people often refer to a certain number, for example $5 / Pi, which cannot go lower, otherwise Pi miners lose interest, abandon a project and the project dies. This scenario of course has happened with countless projects before (including mobile mining coins), which is why Pi is going doing a different route.

However, Pi is built slowly and strategically with this possibility in mind. Instead of rushing to exchanges for a quick price action, we are building the Pi ecosystem and giving use-cases for our favourite coin whilst migrating the users to mainnet.

On top of all this, thanks to lockups, most of the pioneers are locked up and committed to Pi Network for 1-3 years minimum on a blockchain level therefore they are unable to sell until years later. They are staying, regardless of price action.

Interestingly, any Proof of Work mining projects which seen moderate success took time. Those miners did not sell early to realize big profits because if they sold early when prices were low, there would be little or no profit to realize. Although Pi is not proof of work, we pioneers put in real work over the years and we’ll have to continue mining and helping the Pi ecosystem grow. As more people learn about Pi and invest in it, prices should go up over time. This is not a “day 1 Pi changes the world” type of scenario regardless how much people like dream about this.

Whilst high prices would be the ideal outcome for most Pi holders, there are a lot of pioneers and non-pioneers who wanting cheap Pi prices. Why? So they can buy more and increase their Pi holdings. Also, they may find capital gains via investing is a greater idea than mining — not everyone got a lot of time to deal with increasing their Pi earnings.

Whilst many people think cheap prices are the end of the story, smart money knows low prices is precisely is the time to buy. Make no mistake: people’s fear and panic selling will be absorbed by investors who know all too well how this game is played.

Finally, after 5 years of mining, the initial sell pressure is inevitable. This has to happen, no matter what. The higher the price of Pi, the higher the sell pressure as more people rush to profit. For example, not as many people would sell at $1 than $10. This is inversely true too, which are going to explain next.

Misconception #2: If The Price Of Pi Is high, We Won!

This misconception comes in many shape or form. The idea is if we reach a high number like $100 / Pi, we won — if only things were this simple!

Let’s start by a potential scenario that could happen with Pi Network. Take a look at the following chart:

This chart type is quite common which can be seen time and time again in rugpulls and pump & dumps. It’s never great to see a large decrease in price, but when it’s a 90%+ drop, it’s a gigantic red (if not black) flag. To recover a 90% loss, the coin needs to 900% increase in valuation — an immense challenge considering the chart is now decimated, so investors are scared to throw money into the coin. It’s much harder and takes longer to recover from these type of drops. Which is why when they happen, people take the easy way out by cutting their losses to capitulate and move on.

As we know, Pi will have a large initial sell pressure at the start due to millions of people mining for years. This means whatever the price will be, most likely, the sell pressure will outweigh the buying pressure at the start, causing the price to drop until it reaches price levels where investors are happy to buy Pi.

We mentioned people are likelier to sell when prices are higher, so here is the inverse effect: people are likelier to buy when prices are lower. As Pi holders, we are inherently biased — we value our Pi more than those who do not have any.

However, what if you had no Pi? At what price point would you rather buy Pi? $100? $10? $1? Buy low and sell high is the proven universal formula, so naturally, a lower price is a better entry for more profits in the future.

Finally, it’s not day 1 when the whole world decides to buy Pi. Even if millions flocked in to buy Pi, eventually, Pi (or any currency) would reach a point where no more buyers are found, where sellers take control and push the price down. This is why charts are cyclical, and not linear.

Instead, Pi’s price action and succes is going to be an ongoing process which will be measured in years with different metrics. This is important to keep in mind because to see high Pi prices, people have to actually invest in it by exchanging their money for Pi. There’s no other way after Pi is listed on exchanges. That’s just how the cookie crumbles.

Misconception #3: Pi Will Never Launch.

This is your typical doom and gloom misconception, driven by frustration and disappointment over Pi still not having a price action after 5 years. On top of this, we are watching 1 ad / day when restarting our mining session (which can be turned off), making money for the core team.

Pi Network will most certainly launch once all the preparation of the network is deemed ready, not just by the numbers (10 million migrated pioneers, 15 million KYCed pioneers and 100 ready & working dApps) but by also stress tests, functions, additional utilities, quality assurance and by further implementations as well as new Pi Apps by the core team.

Whilst we are making money for the core team, let’s not pretend running this app is cheap with 20-60 million daily users. The money we make goes towards the costs of the running costs of Pi Network.

With 30-50 core team members, let’s suppose a $100,000 / average salary, as well as server, business, legal and other costs. Do some quick maths and you find running Pi Network cost are likely between approximately $5,000,000 - $10,000,000 / year. Pi is not selling and products or services, therefor relies on the community to covers the costs somehow. Watching 1 ad / day may not even cover the costs of operating the Pi Network.

More importantly, this misconception is short-sightedness at best, fuelled by not-knowingness. Pi Core Team owns 20% of the migrated supply, making them the largest Pi holder. Their bag may worth 8 - 10 digit dollar figures after open mainnet launch. Do you honestly believe they will just abandon their bag so easily? Also, at any moment they could remove the firewalls. This is no problem. The problem is if they do that too early the project likely fails.

In order for Pi to succeed, its underlying systems need to be polished and working; pioneers must have migrated and got all their Pi rewards; Pi has to have plenty of use-cases so people will buy and own Pi, not just sell; and every other tiniest details which we missed need to be sorted before open mainnet.

Pi Network is a machine capable of viral growth as its driven by social proof. If things go well, we’ll do great as the product and the community will speak for themselves. But had the core team rushed, made mistakes, launched early when clearly not ready, then the backlash from price action wouldn’t just be a big decrease in price — it would be utter annihilation of the chart, with an abrupt end to this Pi journey. Do we want that?

Pi will launch once its infrastructures are solid and polished, once we have all the rewards we mined alongside with the much needed use-cases so we enter the market with a bang.

In Conclusion

Small prices don’t mean it’s the end and high prices don’t mean it’s a victory.

We should come to terms with that Pi Network will be volatile at the start. Whatever happens, we have to navigate through this period in one piece.

If Pi is successful and the price stabilizes, it will be a promising cryptocurrency for the masses with solid tech and an immense community, meaning investors may buy a piece of Pi. Not only that, Pi’s mobile mining could be a jet fuel to propel us forward with viral growth, so Pi Network becomes a whole new trend worldwide.

But if we want all of this, then we better ensure everything in Pi Network is as bulletproof as possible, so we can withstand the influx of millions of people.

That’s a wrap from us today!

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