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Communities, even (and especially) digital communities, need people. But how can you prove their humanity at scale? In the case of Pi Network, a massive global community powered by the world’s most distributed mobile-mined cryptocurrency, the secret has been balancing the intrigue of high-tech with the people. We found success through creating a native KYC solution.

Building a Crypto Community in the Age of AI

Crypto ecosystems like Ethereum, Solana, or Pi Network are communities made up of different actors—from end-users and developers to miners and validators. Yet, creating a thriving and long-lasting community requires significant skills and resources. We’ve seen traditional social networks like Facebook and Twitter use AI-powered algorithms to grow their user bases, but that can be problematic.

For years, Facebook relied on AI-powered algorithms to sort and recommend content to users based on their online preferences and behavior. While this worked well in the beginning, relying on AI algorithms alone resulted in a slew of unforeseen consequences: with a skewed view towards raw engagement as the highest good, these algorithms could take antisocial actions from creating echo chambers to magnifying human biases through discrimination.

More recently, the highly publicized $44 billion bid to buy Twitter by Tesla CEO Elon Musk was scuppered at the eleventh hour due to the alleged prevalence of fake accounts and spam bots, enabled by a lack of human verification. The sheer quantity of spam brought the question of Twitter’s entire value into account: with spam bots potentially inflating view-counts for advertisers while frustrating users, it’s clear that the AI at hand fell short. This incident highlights the importance of verifying users, as well as carefully monitoring and overseeing AI products.

While spam bots and other factors have plagued and damaged some online communities, we can still see the tremendous impact that flawed and human communities have managed to instigate. Reddit’s community of like-minded speculators on Wall Street Bets have managed to make a global financial impact time and time again, all built around real people.

Consider it the Turing Test at scale: how can companies verify that their people are real?

Complying with Stricter Regulation

Verifying the identity of one’s customers is a complex proposition, requiring scalability and security around personal data. Compounding the problem for technology firms, like social networks and crypto apps, is the need to comply with increasingly strict regulations—from the treatment of user data to the implementation of KYC.

KYC (or “Know Your Customer”) obliges financial institutions to carry out routine identity and background checks on their clients before using their platforms and is part of a broader set of measures to fight money laundering and other illicit activity. Once only pertaining to the banking sector, KYC is now increasingly required of companies in the cryptocurrency sector from exchanges and brokers to wallet providers and other services. And, with the expansion of Web3 and the continued push towards rewarding digital users, the importance of KYC will only compound.

Unfortunately, the cost of KYC can be prohibitive for many crypto startups. After taking into account multiple factors, from manual hours and staff hires to the price of compliance tools and their implementation, companies can spend hundreds of millions of dollars for verification. Even at the reduced and commonly advertised KYC rates of $1.49 to $2.05 per user, this solution simply isn’t scalable or cost effective for amassing large user bases.

Additionally, KYC can create friction when it comes to onboarding new users, providing a new and onerous barrier to entry. In the UK alone, for example, one-quarter of new applications are abandoned due to KYC friction.

That reveals the central irony of KYC: in our impatience, we are often too human to prove our humanity.

Solving for Scalable KYC

To solve this KYC dilemma, we believe human-centered design and scalable technology will allow the future of Web3 to transparently and fairly compensate users while maintaining both personal anonymity and legal compliance.

Pi Network was founded on a synthesis of scientific facts and human truths –– as Stanford University PhDs, you might expect as much from us.

We say “scientific truths” because we believe there is a truth in everything we do in an effort to get closer to, and test, our hypotheses in design, strategy, and management. The immutable facts of math guide us, and we always analyze the empirical data to inform the next iteration.

When we say “human truths” we reflect the fact that no project is built in a vacuum: everything we do is experienced by real people, in real places, with real lives, emotions and experiences that may impact their perception. Some human truths are fundamental; others are malleable. We consider human truths and community needs in every iteration as well.

Maintaining a balance between those truths drives us forward, step by step, as our project advances. For example, decentralization is one prominent property of crypto networks and an important component of Pi’s vision, but we do not want to just decentralize for the sake of having decentralization. Rather, we have been adopting progressive decentralization, based on the stage of the industry, the readiness and awareness of the mainstream audience, utilities development of blockchain technology, and the phase of our project, to hopefully ultimately achieve decentralization that is meaningful and sustainable.

At Pi, we have applied iterative methods to all aspects of the project, from our network-level strategies to testing small product features in our mobile application, to developing the token model to a workflow process.

That distinction separates us from some set-in-stone models that rely on their Whitepaper hypothesis before their people. Instead, we apply our feedback and our iterations to inform and improve the token model and network structure––all to better meet the needs of the people we serve.

Pi Network’s Community-Sourced KYC Solution

Pi Network designed its native KYC solution, Pi KYC, in response to the lack of scalability, financial accessibility, and global reach from other third-party market solutions. Combining scientific and human truths, Pi KYC combines machine automation (AI) with crowdsourced, “hyperlocal” human verification to accomplish accurate and efficient KYC for more than 35 million global members already on its mobile platform.

Machine automation is responsible for image processing, text extraction, fake ID detection, liveness check, and image comparison. Human verification, meanwhile, is processed by pre-approved individuals who check the redacted data of other members’ KYC applications, thus preventing individuals from creating fake accounts.

To solve the problem of scalable KYC, Pi KYC now boasts a robust, self-sustaining human validation workforce in more than 200 countries worldwide (areas that represent about 92.6% of the global population). The network is continually expanding with over 125,000 trusted Validators, validating KYC applications globally, whose efforts are rewarded in Pi.

Beyond preventing spam accounts and keeping out bad actors, Pi KYC helps the network to comply with legal regulation while frictionlessly growing its thriving community. In the age of AI, Pi Network has built a decentralized scalable KYC solution that combines machine automation with crowdsourced human verification for an efficient and responsive solution.

Harnessing the best of both worlds, Pi KYC allows the Network to build a legally compliant crypto community that is optimized for accuracy, privacy, and global accessibility. And best of all — it’s truly human at its core.

In truth, it’s hard for any entrepreneur to know whether or when their project will be successful, and that applies to us as well. What we do know is that Pi has a grand vision for an accessible and inclusive network and ecosystem built on blockchain and fueled by a fairly distributed cryptocurrency. Through the power of community, we are closer each day to realizing that vision.

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A lifelong technologist, Dr. Nicolas Kokkalis is a Founder and Head of Technology at Pi Network. Kokkalis has an extensive background in blockchain technology. In his early Ph.D. work, Kokkalis created a framework for writing “smart contracts” on fault tolerant distributed systems before blockchain and Ethereum were introduced. As part of his postdoc, he introduced and taught CS359B, the Decentralized Applications on Blockchain class in Stanford’s Computer Science department. Dr. Kokkalis can speak to the technical, financial and social potential of cryptocurrencies and their limitations.

This article first appeared on TabbFORUM.

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