August 23, 2021
HOW A NEW CRYPTO COIN TYPICALLY GAINS TRACTION IN THE MARKET
In a typical situation, right at the moment when a new crypto coin is released into the market, the number of people who owns the coin is normally zero. It means that its popularity, functionality, and scalability are not known yet to people. The developers of the coin rely on press releases and word of mouth in their hopes to find both buyers and, eventually, kick-start its popularity.
A coin’s popularity is important as well as the adaptation by business establishments and financial sectors. The more people and businesses buy it and use it for their transactions, the more its price will inflate.
However, the value of the said new crypto coin usually starts low to attract buyers.
To speed up its popularity, distribution, and adaptation in the real world, crypto coins are introduced to investors and traders in one or more of the following ways:
- Hardware mining using ASICs, CPUs, and GPUs.
- Buying from trading platforms.
- News and article features.
- Airdropping to random wallets or registered participants.
- Rewards and gifting.
Through these methods, a new coin will start falling into the hands of people. But the problem is, that these people do not necessarily represent the majority of the population; they are not everyday people. These are people with the financial capacity to buy expensive rigs for mining, people with financial resources to invest in the coin, and people with knowledge in crypto and/or stock trading.
As a result, the distribution of the new coin is concentrated among these small groups of people.
HOW IS PI DIFFERENT?
Pi Network developers made some innovative decisions. They wanted to distribute the pi coins to ordinary people first before it is being officially introduced into the market. And not only that, but they also wanted to make the ownership of the coin very easy, cheap, and fast.
Today, the Pi coin is distributed widely around the world. Even those people who are financially incapable of investing in cryptocurrency now own hundreds – if not thousands – of Pi coins.
Pi’s popularity rises in less than two years. There are now over 23 million people all over the world who own pi coins.
Months before the Mainnet goes live, Pi has long reached its goal of being widely distributed amongst global communities, so that by the time the Mainnet is up, few or no more coins would be left unused. Consequently, those investors and traders who want to own pi must buy it. But because only a few pi coins are left without owners, it may be tough for them to buy pi coins.
Unlike other crypto coins where all of the total supplies are available to be bought by investors at the start, Pi coins’ circulating supply can be very low as most of it is already owned by pioneers.
The only other way for investors to own pi is by buying it from:
- a) The pi developers who own a certain percentage of the total supply
- b) Pioneers who wish to sell their mined pi
The lesser the number of pioneers who want to sell their pi, the harder it is for investors to buy more pi. As a result, Pi’s value will go up. It is also possible that the initial value of each pi coin will be relatively high. This can be made possible by its scarcity in the market. High demand coupled with less availability means a higher price.
Why is it a good thing? When the price is high, many pioneers will be tempted to sell their pi coins. That way, these coins will probably become more distributed across a wider demographic: from ordinary people to investors, businessmen and traders.
This will potentially set Pi to become a true global cryptocurrency.
And because the Pi developers have introduced the hackathon this early — where programmers, developers, and third-player companies are allowed to develop third-party apps that will accept pi — the already global distribution of pi adapts to these third-party apps is likely to be successful and widely used.
When the timing and collaboration are right, Pi can become a true virtual currency that the whole world will use every single day.
DISCLAIMER: The article reflects the opinion of the writer only.