What is DePIN?
According to a report by technology analysis company Messari, DePIN is one of the fastest-growing industries today, with a current valuation of nearly $2.2 trillion. By 2028, the market value of DePIN-related projects is expected to exceed $3.5 trillion. So, what exactly is DePIN?
The full name of “DePIN” is “Decentralized physical infrastructure networks,” which can be translated as “decentralized physical infrastructure networks” in Chinese. In simple terms, the concept of DePIN is to use token rewards as incentives to encourage people to participate in and build real-world physical infrastructure.
For example, Helium Mobile, a decentralized wireless telecommunications service, has launched its own telecommunications service and opened it up for the public to purchase hotspots for indoor or outdoor installation, providing internet connectivity wherever the customer goes. As hotspot network providers, they also earn token rewards when their network is used. As more and more people own hotspots, the network coverage expands, creating a win-win situation.
DePIN expands the scope of Web3 applications, allowing cloud and storage networks, wireless networks, sensor networks, energy networks, and other fields to become more decentralized. It aims to create alternative solutions that are more resilient, cost-effective, and driven by communities than the current centralized systems.
Carlos Lei Santos, the CEO of wireless network company Uplink, states that due to the market’s urgent need for more wireless hardware connections, a new multi-billion dollar giant is likely to emerge from the DePIN industry.
According to data from Messari and DePIN.Ninjia, as of 2023, there are approximately 650 projects in the DePIN ecosystem, with 250 projects in the computing field and 200 projects in artificial intelligence. This shows that DePIN has begun to make its mark in the AI and data storage technology fields.
What are the advantages of DePIN?
As more and more devices require connectivity, the efficiency of existing infrastructure is no longer sufficient to meet the demand. This situation has driven the industry’s demand for decentralized connectivity solutions. The scalability and sustainability of such solutions will be crucial for the industry’s development in the coming years.
Advantage 1: Affordability
DePIN offers a more cost-effective choice than traditional infrastructure, as it significantly reduces the costs of project construction, maintenance, physical structures, and personnel.
Advantage 2: Speed
Furthermore, DePIN allows for faster hardware connectivity, providing different companies with customized solutions and the flexibility to adapt to rapid market changes, thereby providing a competitive advantage.
Advantage 3: Decentralization
In addition, DePIN networks consist of thousands of nodes rather than a centralized structure, making them more resistant to attacks and technical issues.
Despite the numerous benefits of DePIN, there are still challenges to overcome. One major challenge is the volatility of token prices. When token prices plummet and become worthless, contributors are likely to leave, and the entire network construction may face collapse.
Which projects are worth paying attention to?
Many DePIN projects have existed for a considerable period even before the term gained popularity.
Filecoin – Your personal portable hard drive everywhere
For example, the peer-to-peer file storage infrastructure Filecoin was born as early as 2014 and is currently the largest DePIN project in terms of market value. Contributors can offer their unused storage space on their computers to those in need in exchange for tokens.
Helium Network – WiFi wherever you go
Helium Network is a decentralized global WiFi hotspot network with over 980,000 hotspot providers.
As in the example mentioned at the beginning of the article, anyone can use their home WiFi as a hotspot provider and earn $HNT tokens. The more people use the hotspot, the more tokens can be earned.
Nevertheless, with the advancement of decentralized technology, it is inevitable that more innovative companies will start to change the traditional wireless connectivity market. As the DePIN industry matures and develops, these innovative solutions will drive the global economy and society towards digitization.
References: cointelegraph, forbes
