Pi Network’s Centralization Controversy As Core Team Retains 82.8B: Can It Regain User Trust?

Many cryptocurrency enthusiasts joined the Pi Network, but research indicates severe centralization problems affect its operation. The core team controls 82% of the total Pi Coins, which has generated concerns about transparency within governance and decentralization of the network. The blockchain decentralization principles remain questionable as central control exists with a restricted validator and node infrastructure of the network.

Blockchain user frustration escalates, and users raise increasing concerns about the network’s control structure, infrastructure, and privacy guidelines. Pi Network launched as an accessible decentralized cryptocurrency mining service for users, but its current organizational structure shows a different operational reality.

Pi Network’s Centralization: A Cause for Concern?

The 100 billion total Pi Coins have the core team of Pi Network in possession of an 82.8 billion share, measuring 82% of the supply—the core and unlisted holdings amount to 6 and 10,000 wallets directly linked to the development team members, respectively. The high number of Pi Coins under single-entity control creates an exit from the decentralized model on which Bitcoin and Ethereum base their operations.

Bitcoin holds 21,000 nodes on its network, and Ethereum has up to 6,600 nodes, but Pi Network runs with only 43 nodes and only three validators operating globally. Such circumstances cast doubt on whether the network can preserve its decentralized features. The few existing validators hold consent power for transactions alongside governance responsibilities in a manner that violates blockchain principles by concentrating authority.

User Frustration Grows Amid Privacy and Governance Issues

The updated privacy policy from Pi Network’s centralization sparks additional apprehension since it includes AI-based applications in its Know Your Customer (KYC) authentication methods. The policy update reveals that Pi Network employs ChatGPT and other AI technological solutions to verify identity. According to policy history records, this information about personal data handling did not appear in earlier policy versions, thus creating doubt among users.

📌 Pi Network has significantly undermined its credibility, raising serious concerns about its sustainability in the crypto exchange market.

📌 One of the fundamental principles of blockchain technology is having a reliable wallet. However, Pi Network appears to have arbitrarily… pic.twitter.com/BINqmLob3M

— Yusuf Elmas (@YusufElmas) March 11, 2025

Users express concerns about the KYC verification system when it depends on AI. This is because it creates potential risks for data privacy protection, third-party intrusion, and identity verification bias problems. AI-based KYC solutions become risk factors when these systems are not adequately controlled. They cause incorrect identification processes, data exposure incidents, and outside agents’ unauthorized access to user details. 

Many Pi Network users show increased skepticism regarding the long-term block on their Pi tokens. After the mainnet upgrade, users encountered difficulties retrieving their tokens, so some chose to sell their accounts completely. Recent data from Google Trends demonstrates that search interest in Pi Network dropped because users showed less and less commitment to the network; thus, their initial peak of 100 points declined to only 12.

Can Pi Network Address These Issues and Regain Trust?

Pi Network needs to solve its centralization problems and resolve blockchain user frustrations to establish its credibility while maintaining relevance. The fundamental reason blockchain technology exists is decentralization. An unbalanced Pi Coin distribution and validator power concentration would cause the network to lose its integrity.

Users require better information about processing and distributing personal data during ChatGPT-based KYC verification systems. They also require transparent choices about sharing their information with specific features enabled because they need to grasp the entire data usage process. The essential step is to resolve the token lockup problem. New project users joined with the expectation that their Pi Coins could be accessed soon after joining. Restricted access for these users may damage Pi Network’s reputation and lead to additional user loss for the project.

The fate of Pi Network as a trusted blockchain ecosystem will be determined during the critical period ahead, showing whether it advances beyond the current controversies. Moving forward in the crypto industry will result in projects holding transparent and decentralized principles becoming successful, while those that do not adapt will fade into insignificance.