Dec 7th - 5:02pm
The base mining rate halved when Pi crossed 10 million engaged Pioneers! Your mining rate will adjust with your next session. The halving protects Pi’s scarcity. Mine at a higher rate while you can. The mining rate will either halve or fall to zero when Pi reaches 100M engaged Pioneers, and possibly at Mainnet in a year. Don’t miss out! 🙂 Read our analysis and plans.
Mining, Mainnet, Utilities
This post is composed of 3 sections. Feel free - to jump to the section that interests you.
- The question and decision on mining after 10M
- The analysis for making the above decision
- Exciting plans for launching Mainnet and creating utilities
The question and decision
To halve, or to stop, that is the question: Should the mobile mining rate be halved or fall to zero at the network size of 10 million engaged Pioneers?
Context of the question
Pi’s original economic model and mining mechanism are to strike a balance between access and scarcity. While aiming to be the most inclusive and widespread digital currency in the world, Pi tries to achieve a level of scarcity through a mining mechanism where the base mining rate halves when the network size increases by 10X, and the base mining rate based on new minting will fall to zero when the network size reaches a certain point. So which point of the network size is the question here. Even though in our White Paper, we specified the network size to be at least 100 million people, the Core Team had left the decision open, as to whether we will continue or stop mobile mining at the mark of 10 million network size, because back then we lacked data in network growth speed and engagement, and in the technical and ecosystem progresses. Today we’ve crossed the mark of 10 million engaged Pioneers and need to make a decision on whether the base mining rate halves or falls to zero. Some Pioneers may have misunderstood the purpose of this question and thought this was a question about whether to stop the project and asked us not to give up. Don’t worry. We’re not giving up, and we’re working tirelessly every moment towards our goals for Pi. We want to clarify that the purpose of the discussion has nothing to do with whether the project continues or stops, but is to make a decision that affects the growth of the Pi Network, the supply of Pi, the Pi ecosystem-building and whether it will eventually turn into an inclusive global economy.
Process of decision making
The Core Team’s decision on this question is based on data and analysis that we have about the network and ecosystem, input from the community, experts’ views and Pi’s vision and mission, much of which will be presented below. In seeking for community input on this question, one of the major community-wide discussions at the recent Pi Convention was on this subject, where the Core Team collected video submissions from vocal community representatives and text responses of forum participants in the in-app Topics. For the past few weeks, the Core Team has been processing the community responses on this matter, along with analyzing technical data about the network, reaching out to area experts who we know for feedback and evaluating the current circumstances against the vision and goals of Pi Network, in order to make this decision.
Overview of community views
The community opinions about whether to halve or to stop mobile mining at 10M mark are split: For Pioneers who support stopping, their reasons are primarily that stopping mining at 10M would provide scarcity and that it might take long to reach 100M. For Pioneers who support halving, their reasons include that halving would allow the network to continue growing and that stopping now would harm the ecosystem building. Of course, from both sides of the Pioneers, creative ideas were proposed about what we could do to mitigate any negative effects of either side of the decision, and some of such ideas are incorporated into the Core Team’s analysis below.
After thorough analysis of all data mentioned above, the Core Team has decided that the base mining rate is halved at the mark of 10 million engaged Pioneers. The base mining rate will be 0.19634954085 (π/16), including the 0.09817477042 (π/32) from being a Pioneer and up to 0.09817477042 (π/32) from being a contributor to the security circles (These are the precise numbers used for all computations of mining rewards, while the display in-app approximate these rates to the their first two decimal points). The new halved base mining rate will take effect after the completion of your respective current mining sessions. Below are two major sections that we would like to share with the community: 1) reasons and analysis for making such a decision, and 2) plans ahead especially for any concerns about this decision.
1. Core Team analysis for the decision
What’s in the white paper?
As mentioned previously, the original Pi White Paper specified the network size as at least 100 million people. Because we did not know how fast the network would grow, and in case that it would take years to reach 10 million, we left the decision open about whether mobile mining stops at 10 million. The reason why the length of time to reach a certain halving network size matters to the supply is that the longer the whole network stays mining on a higher mining rate, the more Pi is minted. However, in fact, it only took us a bit more than one year to grow from the last halving event of 1 million Pioneers to the 10 million engaged Pioneers mark. The network growth speed is faster than we originally expected.
The primary reasoning for stopping at 10 million is that it will increase the scarcity of the currency. Scarcity is one major mechanism that currencies use to control and increase their value. The scarcity of Bitcoin contributes to its legend as a store of value, just like digital gold. However, history doesn’t repeat exactly, and the path to value creation by Bicoin cannot be exactly copied due to changed historical time and circumstances. There is only one Bitcoin in history, and even bitcoin bootstrapped its initial value from utility due to being the first functional distributed cryptocurrency that supports secure p2p pseudo-anonymous transactions and self-sovereignty of assets. The pure reliance on controlling supply and scarcity will not lead to value creation, as evidenced by the deaths of many other cryptocurrencies exclusively focusing on building supply-oriented token models in 2017. It is too often when discussing the value of cryptocurrencies that people primarily focus on supply while neglecting the other major variable in the equation about value: demand. At Pi Network, we believe the future value creation for cryptocurrencies will come from creating demands through utilities while having the proper mechanism in place to keep supply in check.
In addition to the questionable effectiveness of only relying on scarcity, there is also the problem of being too scarce which would harm the ability for the currency to facilitate value creation processes - utilities. Being too scarce means that most people would hoard and hold on to Pi instead of spending it; without spending Pi, the currency would be limited in its ability to support transactions of goods and services, which are the means by which Pi Network hopes to bootstrap its value. How can we create an ecosystem of utilities in the scenario where no one would want to spend Pi? Utilities can only be created when many trials of applications are launched where Pioneers are willing to spend their Pi to transact for goods and services. Without utilities through applications, the ultimate value will drop and will give room for people to potentially manipulate the currency in the meantime such as pump-and-dumps, harming the ecosystem and the currency itself.
Also, the scarcity argument for completely stopping mining early may also neglect the fact that continuing mobile mining after 10 million Pioneers is not equal to ignoring scarcity. It’s the opposite, because the base mining rate halves after 10 million engaged Pioneers and maintaining a certain level of scarcity is what Pi’s halving mechanism was designed for. So we think halving right now is the proper measure to continue network growth while keeping the scarcity in check. Scarcity as the reason to justify a complete stop of mobile mining is insufficient and could actually be harmful.
How does this decision affect Pi’s vision and mission?
In addition to the consideration of scarcity, we also evaluated the decision in terms of Pi’s vision and the goals. The vision of Pi is to build an inclusive, wide-spread and valuable cryptocurrency.
With over 10 million engaged members, Pi constitutes today one of the world’s largest crypto communities. However, even the entire crypto-world is very small compared to the world’s population. Pi’s vision is to reach way beyond the confined boundaries of the crypto-world. We want to achieve true mass adoption and mass utility, and our strategy so far shows that we have indeed attracted not only existing crypto-savvy members but also expanded the boundaries to attract people interested in cryptocurrencies who are completely new to the space.
A network of 10 million people, as compared to the total 7 billion in the world, still needs to grow to become truly “inclusive” or “wide-spread”. However, if we stop mobile mining right now, it would substantially curb the network growth because right now the ecosystem is yet to be complete and the Mainnet is not launched. It is a major concern raised in the community responses that stopping mobile mining at 10 million would kill the growth and eventually the network. Our careful analysis showed that it is more important to expand the Pi Network to tens of millions of people than to limit network size with the sole purpose to limit the supply. We would want to avoid a scenario of a self-collapsing tragedy of the commons: people would like to exclude others from having Pi, thus others would not care about it, destroying its value for the original members and creating the tragedy of the commons.
The goals of Pi are to create a viable global economy where people would use Pi to transact for goods and services, and which in turn, creates and backs the value for Pi currency. It’s marvelous that we achieved the 10 million network size, which makes us one of the biggest cryptocurrency networks in the space. However, it would be even more probable for us to achieve the network effect and large economic volume if we can grow even bigger and comparable to networks of traditional social networks or technology giants, where enough goods and services are offered and enough people are willing to purchase. The comparables in traditional social networks and e-commerce tech giants where organic economic activities occur and value is created are Facebook with 2.7 billion people, Amazon with over 150 million active customers, WeChat with 1.17 billion users, and Alibaba with over 720 million active customers. (All numbers here are based on top Google search results.) We hope Pi will have a large enough network basis for creating economic volumes to sustain its viability.
Furthermore, in the Industry Panel of the Pi COiNVENTION, one major theme that came up in community opinions was that we need to collaborate with traditional businesses including banks, tech giants, retailers (accepting Pi as the payments), and show what Pi Network can provide them, e.g. access to a network of crypto-ready people. Even though being a 10 million crypto-ready network is impressive, it would be even more impactful and more attractive for such traditional business if our network is bigger.
Thus, considering all above, we have decided that mobile mining continues after 10 million engaged Pioneers while halving the base mining rate.
2. Plans for value: creating demands and decentralization
To address some of the concerns that the community opinions expressed and the Core Team share about continuing mobile mining after the 10 million mark, we have the following plans or directions of plans.
We want to fasten the speed of building Mainent and utilities in parallel. We are setting up a one-year roadmap to launch the Pi Mainnet, meaning that we aim to complete the necessary technical work and launch logistics, e.g. creating keys and wallets for Pioneers, allocating more KYCs by the end of 2021 to launch the Mainnet (Some logistics may continue even after the Mainnet launch given that it takes time to complete these processes for the whole network.). Once the initial Mainnet roadmap is complete, we will share with the community soon.
In addition to the one-year roadmap to launch the Mainnet, we also want to design Pi currency sinks on the blockchain level, along with the Pi community. Potential ideas include: providing incentives to early Pioneers for staking or locking up their Pi in order to make more Pi down the line; creating various transaction fees that are either burnt, or being distributed appropriately such as being circulated back as a source of mining rewards to Pioneers instead of minting new currency. The details of such mechanisms are in flux. To determine which mechanism and what are the right configurations, we will be open to ideas and input from the Pioneers community, go through thorough analysis on their effects, or even run experiments on Testnet before making such decisions.
In parallel, we want to push forward utilities building, by ourselves and with third party developers through the Pi Apps Platform. If we manage to achieve large-scale utility before the Mainnet, it would be ideal, although, in addition to the Core Team’s efforts, the achievement of large-scale utilities also depends on the contributions and coordinations of all Pioneers, third-party developers, timing and serendipitous factors. After the Mainnet launch, the ecosystem and utilities building will continue, and probably the Mainnet will open up more opportunities and challenges in creating utilities.
In regard to mobile mining, as many Pioneers mentioned and we agree, the difficulty of mobile mining may need to increase as the network size grows beyond 10 million. Instead of just clicking a button everyday, the network needs more contributions towards its goals and vision, so all Pioneers are responsible for making Pi move towards the goals, not just the Core Team. What Pi needs to succeed beyond the 10 million network size is no longer pure growth of the network, but also many other things analyzed above: applications, utilities and willingness to use Pi for goods and services. So as a meritocratic system, Pi should reward the activities and behaviors that support and nurture its success. So we’re considering all the proposals by many pioneers on how to increase the difficulty in mining Pi going forward and will potentially introduce mechanisms to that effect between 10 million and 100 million network size.
After the Mainnet launches, mobile mining might end at that time, but it is not determined yet because there are possible solutions for it to continue for the sake of perpetuating our network growth. One possibility is to continue mobile mining after the Mainnet launch not through new minting, but by a source of Pi from fees and charges in the ecosystem mentioned above. Another possibility is adding an extra halving event for the base mining rate at the launch of Mainnet if the Mainnet comes earlier than the 100 million engaged Pioneers. This decision again depends on the circumstances at the Mainnet launch, including the speed of growth, how much Pi still relies on the growth of the network, and the maturity of the Pi ecosystem. We will revisit this question at the Mainnet launch, with the community input, to make the determination then.
Right now, we’re focusing on the two-pronged approach analyzed above: 1) to aim to launch the Mainnet based on a one-year roadmap, and 2) to fasten the speed in creating utilities. As for Pioneers, mine while you still can with contributions to what Pi needs to succeed, including creating utilities.