PI Network is one of the newest digital coins to attract attention among cryptocurrency investors.
We explain what you need to know about it and whether it’s legitimate.
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You can’t put cash in the digital currency yet, but once it’s possible, be aware that making money on any investment is never guaranteed.
In other words, you should never invest more money than you can afford to lose and steer clear of anything you don’t understand.
Cryptocurrencies are especially volatile, and their values can make large swings with no notice.
Newer cryptocurrencies are also even riskier than more established ones, such as Bitcoin, and make you more open to scams.
5 risks of crypto investments
BELOW we round up five risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
What is Pi Network?
Pi Network claims to be the first and only digital currency that you can mine on your phone.
Cryptocurrency mining is a hugely energy intensive process and requires a lot of computer power in order to solve complex mathematics puzzles.
Through a complex computer programme, Pi Network instead uses a series of votes and exchanges of data to verify transactions.
Pi Network claims users can mine the currency through the mobile app “without draining their phone battery”.
This makes the process available to anybody, in theory, Myron Jobson, personal finance campaigner of Interactive Investor, told The Sun.
Pi Coin is the cryptocurrency that runs on the Pi network, but it remains in pre-release mode.
Pi Network is currently in the second phase of the project, but it’s not yet known when Phase 3 will launch.
How much is Pi Network worth?
As Pi can’t yet be traded, it currently holds no value, said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
However, the app claims to offer users the ability to boost their mining rate by inviting friends and family to join the project.
Earlier members of the network also mine at a higher rate than those that come…
Read more:What is Pi Network and is it a scam?
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