The Rise of Decentralized Physical Infrastructure: A New Era for Tech Services

What is DePIN (Decentralized Physical Infrastructure)?

In simple words, DePIN is a system where individuals can share their unused physical resources like computer storage space, internet bandwidth, CPU and GPU power along with data collected from IOT (Internet of Things) devices.

In return, they earn tokens with real monetary value as rewards for supporting a specific decentralized project. DePIN encourages people to participate in providing any tech related services in exchange for tokens as rewards. 

For example, assume you got registered as a viewer on a decentralized video streaming platform, as a result, you enjoy super video quality and smooth streaming from your mobile when watching videos on the platform.

This is because the platform intelligently selects nodes (individuals with powerful computers) with sufficient bandwidth and processing power to deliver high quality videos to you. These nodes are also registered with the platform just as you, but as service providers. They can be located in many regions worldwide and no single entity owns them. 

DePIN is much like a service that you receive, in terms of video streaming, gaming or other applications, by making use of the computational resources that individuals have all over the world. This concept is very resourceful when compared to how a Centralized platform works.

In a centralized digital infrastructure, resources such as servers are owned by the company itself. For example, Netflix stores their movies on their own servers located across many regions and streams directly to users globally.

The scenario is the same for Youtube. YouTube owns their own servers globally, so when user’s watch videos on their platform, YouTube relies on their distributed servers to handle the streaming and deliver the video content to your device. 

Examples of DePIN Projects in Crypto Space

While the concept of DePIN was there before crypto, the concept became very popular with blockchain technology and cryptocurrencies. 

Helium (HNT): Helium is about providing decentralized wireless networks for specific IOT devices. Users can buy and set up helium hotspot devices and they can then share the bandwidth with nearby IOT devices.

In return, users receive HNT tokens as rewards. These hotspots devices cost around $400 to 600 and could reach 200 times further than the conventional Wi-Fi. 

Theta Network (THETA): This crypto project is focused on providing decentralized video streaming to users globally. Theta allows service providers to rent out their excess bandwidth and computing power to deliver high quality videos. Service providers are rewarded with TFUEL tokens for their contribution.

Render Network (RNDR): This project provides decentralized GPU power by allowing individuals to rent out unused GPU power for rendering tasks like VR, gaming and video production. 

File Coin: The project is a decentralized storage network that allows users to rent out their unused hard drive space to others. How ever you cannot just become a storage provider, your PC should meet their minimum requirements. Successful storage providers will earn rewards in FIL tokens. 

DIMO (Digital Infrastructure Mobility): This is a decentralized vehicle data platform. Users install a Demo device (Hardware sensor) in their vehicle, this device collects data from the car such as mileage, fuel efficiency, location, maintenance needs, engine performance etc.

Car owners have full control over which data they want to share with developers, business and researchers. And in return, they will receive DIMO tokens. The data collected can be used for many purposes such as building new apps, personalized insurance, improving traffic systems, environmental monitoring, driver behavior analysis and more.

The Growing Market Potential of DePIN

The growth and potential for DePIN projects can differ due to the variety of industries, so we cannot judge with a single figure the entire market for DePIN. But we can still look into each industry and its growth and market potential. 

IOT Market Growth: DePIN is closely related to IOT, thanks to its decentralized solutions provided. The market for IOT according to Fortune Business Insights is projected to grow from $714 billion in 2024 to 4 trillion by 2032 with a compound annual growth rate (CAGR) of 24.3%.

Decentralized Cloud Storage: According to Business Research Insights, the decentralized cloud storage market is projected to grow from $0.5 billion in 2023 to $1.5 billion in 2032 with a CAGR of 15% during the forecast period.

Decentralized Wireless (DeWi) Market: The market for decentralized low-cost wireless network is growing very rapidly, although any relevant statistics can be found regarding this, projects like helium and Wi-Fi Dabba play a key role in this sector.

For instance, Helium IOT focused wireless networks span over 70,000 locations and Wi-Fi Dabba is making waves in India offering broadband for $0.01 per 1 GB. Anyone can become a part of the network by purchasing a Dabba hotspot device. This major shift in wireless networks can increasingly compete with traditional telecom networks.

Web3 Adoption: Web 3.0 is the next generation of the internet built on blockchain technology, focusing on giving more control to the users over their data and digital assets. Therefore, DePIN plays a key role in Web3, without DePIN, the core principles of Web3 like decentralization, transparency, incentivization are hard to achieve.

The Web3 market according to Grand View Research is valued at $2.25 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 49.3% from 2024 to 2030. Therefore, DePIN projects have a unique advantage as they complement Web3’s push for decentralization.

Benefits of DePIN

Low costs: DePIN makes use of underutilized resources such as storage, computing power and bandwidth from users, this minimizes the need to set up expensive centralized infrastructure which is very costly. Therefore, DePIN can convert these low infrastructure costs to low prices for users. 

Scalability: Making use of underutilized resources and giving people the power to participate in providing services allow  DePIN projects to expand quickly and efficiently without having to worry about massive investments. 

Decentralization: DePIN projects aren’t centralized, meaning the infrastructure isn’t owned by a single company. In the case of Helium, for example, people buy the hotspot devices themselves and can decide whether to keep providing bandwidth based on the incentives they receive.

Incentives: DePIN projects are likely to be successful because users receive tokens which have a monetary value based on demand and supply for those tokens in the crypto space. Nobody wants to provide services for free, right? so receiving daily rewards surely motivates anyone to take part.

Final Thoughts

DePIN really shakes things up when it comes to how we think about infrastructure and services. It’s a complete turnaround from the centralized systems we’re used to. With the chance to earn rewards, DePIN could spread like wildfire and even give traditional infrastructure a run for its money in the future.

Honestly, I believe that this kind of competition is awesome, because it can lead to more innovation and better-quality services, boosting living standards for everyone.

But let’s be real here, DePIN isn’t without its bumps in the road. Remember, DePIN relies on people and people are motivated in this field because of the tokens they receive as rewards which have a monetary value.

What will happen if token prices related to a specific project suddenly drop? can the consistency of the services be maintained? The crypto space is notoriously volatile, prices can pump or dump without any warning, making it a huge challenge to keep things steady. But let’s hope for the best, after all, people are very creative and always find solutions to problems!

Disclaimer: The contents of this article are for informational purposes only and are not financial advice. The views here are just the author’s opinions. The crypto market is volatile, so be sure to do your own research before investing.