Pi coin users were bewildered on December 21 when this virtual currency mining app suddenly disappeared from Google Play.

Later, Pi’s development team posted a notice on the homepage, stating that it “is currently going through a regular review cycle and is unavailable to download through Google Play Store” and provided a link to download the app in APK format.

However, it reappeared on the Android download store after only about 24 hours.

Though many users were happy, many outsiders are still sceptical about the future of the project.

Pi Network, said to be developed by two Standford University PhDs, is a free mobile phone mining project that appeared in mid-2018. This crypto-mining app became popular among Vietnamese users in 2020, with the hope that Pi could become the “next Bitcoin” and users will be billionaires when Pi is circulated widely and the price increases.

However, Pi is also a controversial project, as many crypto and blockchain experts have warned about the suspicious activities of the Pi Network. Experts say that Pi has no core technology but is essentially an application that collects user information.

No value after three years

Many users have been drawn to Pi mining with the idea that there is no need to invest capital, just own a mobile phone and spend a minute to check in every day to mine. That’s why experts have said Pi is just an attendance check-in app. Users can also speed up “mining” Pi if they invite other people through a referral code.

However, after three years since it launched, this cryptocurrency is still almost worthless. Pi has yet to appear on any cryptocurrency exchanges or be used in the exchange of goods and products.

On its website, the development team admits that the currency value of Pi is worth approximately zero but compares it to Bitcoin in 2008 when this leading cryptocurrency introduced its whitepaper.

The team says having more users is a key feature to increase the value of this asset. As announced in November, Pi Network currently has 29 million users from 250 countries and territories. However, these numbers have so far had no impact on the price of Pi.

In addition, the team promises that Pi will be able to be converted to fiat currency after the mainnet (launching the official network) but so far, Pi Network does not have any specific timeline for users to track the completion of the project. This is different from most blockchain-based projects in which transparency is the most important factor.

However, since last month, many netizens speculated the project is set to transition to the main phase. The platform has asked its users to verify their identity before December 24, and this has triggered the renewed interest of many users who had lost confidence in this project.

Thanh Lam, a user in HCM City, reinstalled the Pi Network app after removing it earlier this year despite owning nearly 1,000 Pi following rumours that developers of this cryptocurrency are planning to move to the next stage.

“Some group members said that Pi will be listed on a cryptocurrency exchange by the end of this month at US$314,” Lam was quoted as saying on vnexpress.net.

Data from the traffic tracking platform Similarweb showed access to Pi Network’s website from Viet Nam rose nearly 59 per cent month-on-month in November and ranked fourth globally behind the US, India and Russia.

The app also ranked seventh among downloads in Viet Nam on Google Play Store last month with more than 10 million downloads.

Controversy

Since early this year, many experts on security and blockchain technology have warned about suspicious signs of Pi coins such as its lack of system transparency (in contrast to the open system of Bitcoin), the imminent threat of losing personal data and it grows like a pyramid scheme as users can only join the network with a referral code of another user.

According to Dang Minh Tuan, a blockchain expert at the Posts and Telecommunications Institute of Technology in Ha Noi, although mining Pi is free, besides giving up their personal information, there are potential threats that the Pi Network app could steal even more information from a device.

Recently in Viet Nam, some websites have appeared allowing the exchange of goods with Pi to attract more users.

On a Da Nang-based e-commerce site, a series of products from electronics, household appliances to cars, motorbikes and real estate is on sale with payment choices including VND, USD and Pi.

On its fanpage, the website said they are "pioneering in online transactions in the 4.0 technology era, helping users easily exchange goods with Pi coin digital currency". However, at the final payment step, Pi coins no longer appear in the list of payment methods. The page explained the system is in beta and users will be able to exchange goods with Pi when the virtual currency enters the official launch stage.

According to security expert Ngo Minh Hieu, these pages have many signs of fraud. Some claim to be an e-commerce site but the website's name is an individual, and it can only display information but cannot perform transactions. In addition, the website does not register business activities on the system of the Ministry of Industry and Trade.

"The creation of these pages may just be to lure others into the Pi network, not bringing any value," Hieu said.

Even when Pi Network entered the official stage, paying for goods with Pi is an illegal activity in Viet Nam.

At a conference on prevention of law violations and crimes in the digital transformation and digital economy held by the Ministry of Public Security last week, authorities reaffirmed using virtual currencies for payment is against the law.

"According to Vietnamese law, virtual currency is not a legal means of payment. Issuing, supplying and using virtual currencies as a means of payment is a law violation," said Pham Tien Phong, director of the Anti-money Laundering Department under the Banking Supervisory Agency, the State Bank of Viet Nam.

Pursuant to Clause 6, Article 26 of Decree No. 88/2019/ND-CP on administrative sanctions in the field of currency and banking activities, the acts of issuing, supplying and using illegal payment means (including virtual currency) will be fined from VND50 million to VND100 million ($2,174-4,348).

At present, most countries in the world do not accept cryptocurrencies as a form of payment. The only country that accepts digital currency as a medium of exchange is Bitcoin in El Salvador.

Scams are rising

Scams in cryptocurrencies are rising. According to a new report by blockchain analytics firm Chainalysis, nearly $8 billion was stolen in cryptocurrency scams worldwide in 2021, up 81 per cent year-on-year.

Rug pulls – a type of scam where developers abandon a project and leave with investors’ funds – became the “go-to scam” of the decentralised finance, or DeFi, ecosystem. In 2021, rug pulls accounted for over $2.8 billion stolen, or 37 per cent of all scam revenue.

While it’s too early to conclude Pi Network is a scam, investors are advised to take necessary precautions against similar types of cryptocurrency projects, not just Pi Network. — VNS