Thread by @austin_hespe

Let’s talk about #PiNetwork 🧵

The economy of Pi Network while in the enclosed main net is fairly basic. Many pioneers have been excited to get the notification to pass KYC to then only have nothing to do with their Pi. The excitement gets renewed with price speculation...

2) of Pi being equal to $314 or $314,000. Nevertheless, these arguments between Pi being worth thousands of dollars or pennies on the dollar are meaningless. Why? Because a price consensus can not be found without a high volume market.

3) A price consensus in anything can only be found inside markets where the item is traded in high volume at competing prices. Why can't the price of Pi just be set at $314 or $314,000 like so many on Twitter want? For a very simple economic reason.

4) You can't create money you don’t have. It would be great if Pi was worth $314,000 and many of us became millionaires. However, where would all of that USD come from? “Pi created it!” No. Pi did not, Pi is a representation of real-world items.

5) The simple truth is if you didn't do some kind of work or service to create $314, then Pi cannot become $314 in value. It's the same as saying it's worth 20 bananas but having none of the bananas to give. Understanding this, how can we create a usable market?

5) There are many attempts to create Pi markets across the world. This innovation is needed as we get closer and closer to open main net. However, our main obstacle currently is trading items using Pi. This is because it is prohibited to exchange Pi for fiat currency.

6) What this creates is barter marketplaces. Person A can give Person B an item in exchange for Pi. This system can work well if Person A already owns the item and no longer wants it. However, the market breaks down for items that Person A buys for Person B.

7) Let's say Person A buys Person B a pizza for $12 and delivers it to Person B. Person B pays Person A 12 Pi. The transaction is a 1:1 relationship with USD. However, one person received a pizza, and the other lost money.

8) For Person A to keep selling pizzas, they would need to turn their Pi into fiat money. This would allow for price discovery in an emerging economy, but since Pi can't be turned into fiat money the cycle stops. It shows the potential of Pi but not an economy.

9) Finally, what can we do as Pioneers to create a real economy before Pi is fully released so we can use it to BUY and SELL products? The answer is simple, we need to sell services. I'll use myself as an example. I went to college for meteorology and can create forecasts.

10) In a service-based economy for Pi, I could offer Pioneers my knowledge of the weather and ability to forecast it and in return receive a small amount of Pi for my service. Let's use our model from earlier. Person A offers Person B a weather forecast for 0.5 Pi.

11) Person A spends 1-hour forecasting and writing up a report, and then delivers the forecast to Person B. Person B pays 0.5 Pi to Person A. Our economic model doesn't have to stop now. Person A can spend 0.5 Pi on another service while still creating more forecasts.

12) This is because it doesn't cost fiat money to produce the forecast. Instead, it costs time and knowledge, something that doesn't disappear after the first transaction. The Pi gained can be spent on other services, creating a movement in Pi circulation. An economy. 📈

13) This won't work for all services, but it can work for some. The idea is to think outside the box of what a traditional economy is. Starting with this serviced-based economic model will prove Pi’s worth globally and create a foundation for other markets as Pi grows.

14) If you made it to the end, I want to thank you for reading everything! What kind of services could you offer in the Pi Ecosystem?
@Edycabas @PiNetworkNews1 @PiRevolutionX @WorkforcePool

@threadreaderapp unroll

@WoodyLightyearx