Category: Crypto News

Pi Network, a mobile cryptocurrency mining app that leverages social connections, has been connected to a personal information data leak.

The Know Your Customer (KYC) checks of Vietnamese citizens were put up for sale on a hacker forum last week.

Personal Information Leaked

A local news outlet in Vietnam reported that an estimated 10,000 identity card information, home addresses, phone numbers, and email addresses were put up for sale on RaidForums, a database marketplace of breaches and leaks. The account selling the data admitted to accessing the data via Pi Network, and was selling the information for $9,000 USD payable in Bitcoin (BTC) or Litecoin (LTC).

The Vietnam Ministry of Public Security’s cybersecurity division has since launched an investigation into the matter, also making remove the post from the site in the meantime. An estimated 17 GB worth of Vietnamese personal information was put on the marketplace, potentially connected to up to 10,000 people according to a cybersecurity expert that contacted the account.

Leak Might Not Be From Pi

Some proponents of the network don’t believe that the Pi Network is to blame for the data breach, since the platform doesn’t directly verify its users’ info nor does it require pictures of identity cards. But basic information is required when registering on the Pi app.

The KYC of the Pi Network is processed through a third party called Yoti. The digital verification site accepts passports from 200+ countries, and Vietnam is indeed one of them. However, Vietnamese identity cards are not accepted.

To perform KYC verification on Pi Network, Vietnamese would need to use their passports. Only some users who used earlier versions of Pi could perform KYC verification using their driver licenses, but so far the system has yet to accept Vietnamese identity cards.

Phien Vo, Pi Network group moderator

This means that the identity card information could also have been leaked from another source. Authorities are trying to uncover the mystery.

Is The Network a Pi In The Sky?

Pi Network proposes a new method of mining its own cryptocurrency, using social connections rather than a Proof-of-Work approach like Bitcoin.

Instead of burning energy as proof of work cryptocurrencies like Bitcoin do, Pi secures its ledger when members vouch for each other as trustworthy. This forms a network of interlocking “security circles” that determines who can execute transactions. This novel approach allows crypto mining on your phone by leveraging your existing social connections, with no financial cost, no battery drain and a light footprint on the planet.

FAQ page at minepi.com

Pi Network has received several critiques hinting at a possible scam – these are some major points that are focused on:

• Pi cryptocurrency is not yet traded on exchanges, it cannot be withdrawn and it has no practical value
• Users have no access to their private/public keys (until mainnet launch)
• Mining rates increase by referring other people and earlier members benefit from a higher mining rate (MLM-esque approach)
• Pi app is designed to collect personal information (requires email, cellphone number, full names to register) and Pi crypto can only be claimed after successful KYC (with ID or Passport)

Pi Network’s data collection approach is similar to other social networks like Facebook in the sense that they collect almost all data they can get from users and use them in optimizing advertising.

Cem Dilmegani, Founder of AIMultiple [source]

However, some of these issues are addressed in the white paper, for instance the token will be launched on exchanges when mainnet is launched. According to the community Pi is now in Phase 2, busy testing the Pi wallet.

The paper also stipulates that “Pi Node uses a different consensus algorithm based on the Stellar Consensus Protocol (SCP). In SCP, nodes form trusted groups (quorum slices) and only agree to transactions that those trusted nodes agree to.“. This is how your mining rates increase by adding contacts (people you know) to a larger security circle to form these trusted groups.

There seems to be a lot of speculation about the Pi Network, but it seems only time will tell how much utility the network actually has with the launch of its mainnet.

As always, remember: DYOR [Do Your Own Research].