Decentralized Physical Infrastructure Networks, or DePINs, are what?

Introduction

The DeFi space is rapidly evolving. When the growing influence of blockchain technology combines with the rapid development of globalized information technology, a whole new playing field opens up. This is DePIN (Decentralized Physical Infrastructure Network). The DePin concept is currently the hottest topic among crypto enthusiasts, as such networks promise a full-scale change in decentralized physical infrastructure.

This trend was highlighted by industry experts at the Solana Foundation's Breakpoint conference. There was a lot of talk about the use of this technology and how to build a blockchain application to be successful in 2024. The DePIN development concept is set to become popular in the coming years, so let's take a closer look at its essence and advantages.

What is DePIN?

DePINs, or decentralized physical infrastructure networks, are networks that use token incentives to motivate people to share their resources. This resource sharing covers a wide range of areas, including storage, communications traffic, cloud computing, energy, etc. DePINs have turned infrastructure provision from centralized enterprises into a form of crowdsourcing, with users from all over the world participating.

Why do you need DePIN?

The answer to this question is related to the limitations of the existing ICT (Information and Communication Technology) infrastructure. DePIN provides a decentralized infrastructure and the ability to eliminate various limitations.

The term DePIN was first popularized and highlighted in a report by investment research institute Messari, which also published statistics related to DePIN.

DePIN projects are mostly built on the Ethereum blockchain, but Solana is also starting to make inroads here. The market is currently dominated by Filecoin, Render Network, Theta Network, Arweave, and Akash Network.

How DePIN works

Let’s take a look at how DePIN works. The system uses a token economy model to incentivize users to provide resources, such as GPU power, access points, storage space, etc. In the early days of DePIN, tokens often had no real value, so users acted like venture capitalists. They invested in bullish DePIN projects, becoming “risk miners” and reaping the benefits of acquiring large amounts of tokens and increasing their prices.

Modern DePIN projects pursue the following goals:

Attracting supply participants through tokens: The adoption of an established token economy model attracts early participants who contribute to building the network and provide resources. They receive tokens and come back for more.

Attracting Users: As resource providers grow, some developers join the ecosystem to create products. Users are attracted to DePIN because the provider can offer certain services at a lower cost compared to centralized infrastructures.

Positive Feedback: As the number of users increases, this demand motivates the proposers to earn higher incomes, creating a positive feedback loop. This structure attracts both proposers and participants.

Early projects in the DePIN space focused on storage and communication technologies, including the Helium decentralized network (2013), Storj decentralized storage (2014), and Sia (2015). With the rise of the Internet, the Internet of Things (IoT), and artificial intelligence (AI), DePIN’s innovation focus has expanded to include computing, storage, communication technologies, and data collection and sharing.

How DePIN is Transforming Web3

DePIN Web3 emerges as a solution to address critical issues in the Web3 ecosystem, especially vulnerabilities associated with centralized infrastructure. This decentralized model can reduce the burden on any single point of failure, creating a more robust and adaptable infrastructure for decentralized applications (dApps).

DePINs play a key role in facilitating the creation of applications that require physical infrastructure support. These applications often require significant computing power, storage, and bandwidth. DePINs provide a decentralized network of resources that developers can connect to, ensuring increased resource availability.

Moreover, the overall availability of Web3 will benefit from the use of DePIN. In regions with limited access to traditional centralized infrastructure, such decentralized systems allow for the widespread adoption of innovative technologies. DePINs help expand the scope of Web3 by enabling users to interact and use decentralized technologies.

Examples of DePIN projects

4 Bright Examples of DePIN Crypto Projects.

Filecoin and Arweave are leaders in decentralized data storage

Filecoin and Arweave are changing the way data is stored. Filecoin manages distributed storage using tokens based on the IPFS protocol, and Arweave provides a solution for persistent storage. These innovations reduce the cost of storage and improve the security and reliability of data.

Helium is a leader in decentralized wireless networks

Helium is a pioneer in decentralized wireless networks, attracting users to build the Internet of Things (IoT) through token incentives. Given the significant progress in the IoT space and the challenges in the 5G and Wi-Fi markets, Helium’s success lies in the effective use of decentralized technologies to address the high costs of IoT infrastructure.

Render Network – a new word in the field of decentralized computing

Render Network, a decentralized GPU rendering platform, provides a new solution for image and animation rendering. The network effectively matches the supply and demand of GPUs through a tiered pricing strategy, while facilitating the reuse of idle GPU resources, providing customers with a more affordable rendering option.

Theta Network is an innovator in decentralized streaming media

Theta Network uses decentralized technology to optimize content publishing, reduce costs, and improve image delivery efficiency. Theta Network allows users to contribute bandwidth and computing power to video delivery, providing users with the best video viewing experience.

The Future of DePIN Applications

The development of the DePIN industry has brought many benefits, including increased resource efficiency, reduced costs, and increased market transparency. At the same time, the industry faces technical, market, and regulatory challenges. These challenges include improving user experience, maintaining competitive advantage, and complying with regulatory requirements.

The future of the DePIN development solution space is full of opportunities and challenges. With technological advancements and increased market awareness, these innovations are expected to solve current problems and revolutionize data storage, computing, and image delivery. Looking to the future, DePIN has the potential to become a key infrastructure to support the digital economy, bringing real benefits to society, businesses, and individuals.

With DePIN, people can use Wi-Fi, transportation, storage, IoT infrastructure, data, maps, etc. and earn rewards. This is not only a growth trend, but also a catalyst for mass adoption of cryptocurrencies. This trend promises to change the user experience with technology and infrastructure.