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With the wealth-making myths of Bitcoin and Dogecoin, various "digital currencies" have become popular. Pi, which claims to be able to "mine coins" with a mobile phone, has recently become popular in WeChat Moments. News about "recruiting people" for Pi can be seen everywhere on Weibo and WeChat Moments.
Mobile phones can be used for "mining". Is such blockchain technology feasible? Many industry insiders said that mainstream "mining" projects require a lot of computing power and complex algorithms to achieve encryption security, which is difficult to achieve with mobile phones. Investors should be wary of virtual currency project owners using the "Ponzi model" to promote their products in a layered manner, and be wary of the risks of being "smashed" or "cheated", or even falling into illegal fundraising traps or having their privacy violated. The "wealth code" of mobile mining
Mining Bitcoin requires enough mining machines, but the method of mining Pi is very simple. According to the Pi Chinese website, coin users only need to download the Pi App to "mine" for free, without consuming electricity or data, and only need to click once a day to mine Pi.
A staff member of the Pi Chinese website said that there are more than 18 million active miners of Pi worldwide, and the foreign barter consensus price is about US$100 per Pi.
In other words, the Picoin initiator has attracted nearly 20 million active users simply by "drawing pie in the sky". Currently, the number of Google search results for Picoin has reached 652 million, which is close to the 833 million search results for Bitcoin.
One group member told the reporter that he had been working hard on “mining” for two years and contributed a lot of traffic to the project. Another group member said that he had 8,000 Pi coins and was a “rich man” among miners. They thought, “It’s free money anyway, so it doesn’t hurt to mine.”
Can mobile phones be used for mining? Wu Haifeng, a researcher at the Institute of Advanced Finance of the Chinese University of Hong Kong (Shenzhen), said that emerging technologies such as blockchain and digital currency regard computing power as their core competitiveness. Cryptocurrency mining requires a lot of computing power and occupies a lot of storage. In order to mine, many blockchain projects have begun to build supercomputers. The geographical distance between computing power providers and those in need, network congestion, and signal collision problems are all challenges faced by the field of distributed computing.
"Even if mobile phones can really 'mine', it means that the underlying algorithm of this project is relatively simple. It is definitely not as carefully designed as Bitcoin and Ethereum (ETH), which have more than one million lines of code and rely on super-powerful mining machines to maintain mining," he said.
He denied the application value of Picoin, saying, "Mining a bitcoin consumes a lot of electricity, and its cost must at least cover the price of electricity. If a mobile phone can also mine coins without using storage, it means the cost is very low and the marginal cost can be ignored. From this perspective, its market value is destined to be very low."
He said that the reason for the emergence of cryptocurrency is to ensure security, so only organizations and individuals with particularly high security requirements will consider cryptocurrency. The algorithm of Picoin is so simple that it is easy to be hacked or decoded by hackers, so it lacks credibility in the currency circle.
What is the "wealth code" of Picoin? In April 2020, the Picoin App launched an advertising intention survey. After a while, many mobile game ads appeared on the Picoin homepage. The Picoin project has advertising revenue every day, but has always been vague about the launch time of the main network and the launch time of the exchange. Many group members believe that mining every day is contributing traffic to the project, and this model is not much different from "checking in every day to get points". Is it a pyramid scheme or a virtual currency?
In the eyes of many people in the cryptocurrency circle, the expansion model of Picoin is highly similar to pyramid schemes. To determine whether a project is a pyramid scheme, two characteristics are usually considered: first, whether it charges an entry fee and whether it requires investment; second, whether it requires "recruiting people" to develop downlines, whether the uplines gain benefits from the downlines, and whether the hierarchical relationship of benefits exceeds two levels.
According to many coin friends and the Chinese assistant of Picoin, Picoin does not require any money investment. But the assistant said that it is possible to make money through hierarchical relationships. "Picoin will be traded on exchanges one day. It is recommended to invite more new people and establish a contact group. When OTC transactions can be carried out, provide guarantees for the transactions of Picoin between the group members, so as to get the guarantee fee." He believes that as the price of Picoin rises, the organizers will be able to cash in the Picoin in their hands.
Industry insiders believe that the so-called air coins are almost all concocted with similar business routines. The first is coining, where the founding team registers a shell company, relies on the industry's common technical solutions to complete the "white paper" and spends several months debugging the code; the second is packaging, where the project is hyped up through WeChat Moments, lectures, and celebrity endorsements; the third is private placement, through internal private placement and finding external investors, and then spending some "currency listing fees" to be listed on a specific exchange; the fourth is raising prices, publicizing the skyrocketing market to attract investors; and finally, early players ship in large quantities.
It is still unclear whether Pi is a virtual currency, but the reporter found through information review that Pi’s official U.S. website has not been registered, and no open source code can be found on GitHub, while mainstream blockchains are all open source technologies.
According to data from blockchain security company PeckShield, there were 151 virtual currency-related fraud cases in 2020, a 37-fold increase from 2018 and a 4-fold increase from 2019, resulting in losses of more than $3.2 billion. Among them, virtual currency is indispensable, and the most typical cases that have been officially judged or investigated include Five Elements Coin, Asia-Europe Coin, OneCoin, Heroes Chain (HEC), etc. Risks behind the fog Wu Haifeng said that in the cryptocurrency circle, such virtual currencies are "numerous", and only one in ten thousand can survive in the end, and investors who join later may encounter the risk of "dumping". "I understand that there are at least hundreds of thousands of coins being mined, but only a few can actually be traded on exchanges. Many virtual currencies fail before they are listed on exchanges, and some coins, after holding a certain amount, the rule makers will say that the holder has violated a certain regulation and forcibly clear the coins in the account, causing investors to spend a lot of energy on mining, but in the end the coins in their hands are worthless."
Wu Haifeng is also worried that using mobile phones to "mine" may also lead to the "naked" state of user privacy. Most of the apps in the cryptocurrency circle can only be downloaded from the application market with overseas IDs. Borrowing someone else's ID may upload files in your own phone. Moreover, these virtual currency apps may also upload user privacy information during use.
Yu Jianing, rotating chairman of the Blockchain Committee of the China Communications Industry Association, reminded investors that a small number of frauds disguised as blockchain will set very low thresholds for users in the early stage, with simple operations and low (free) capital thresholds, and increase the popularity of the project through a "recruiting people" reward model and a lot of publicity. At the beginning, the project party was essentially building a multi-level distribution system. When it came to the second stage, the project party announced that the virtual currency could be transferred or traded, and there was a possibility of capital circulation, and they were looking for opportunities to sell a large number of virtual currencies, which would greatly increase the risks for investors.
Yu Jianing summarized four ways for investors to "avoid risks": First, be wary of risk-free, high-return blockchain projects. The prices of encrypted assets have been rising and falling frequently, and air coins may return to zero in extreme cases. Second, avoid projects that rely on "recruiting people" and multi-level rebates to realize cash. This type of pyramid scheme marketing is extremely risky. Third, learn to read GitHub's open source programs. You can check its parameters and operation methods on the blockchain browser, and all accurate information about the issuance volume, circulation volume, transfer records, etc. of assets. Fourth, blockchain projects that use over-the-counter transactions or specific exchanges need to be carefully identified. It is very likely that the price is highly manipulated and cannot be freely charged or withdrawn. |
