What is DePIN?
According to a report by technology analysis firm 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 surpass $3.5 trillion. But what exactly is DePIN?
The full name of “DePIN” is “Decentralized physical infrastructure networks.” In simple terms, DePIN is a concept that uses token rewards as incentives to encourage people to participate in and build physical infrastructure in the real world.
For example, decentralized wireless telecommunications service Helium Mobile has launched its own telecommunications service and allows the public to purchase hotspots for installation indoors or outdoors, ensuring internet connectivity wherever they go. As hotspot providers, individuals can earn token rewards when their networks are used. As more and more people own hotspots, the network coverage expands, creating a win-win situation.
DePIN expands the application scope of Web3, allowing not only digital assets and decentralized finance but also 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 community-driven compared to the current centralized systems.
Carlos Lei Santos, CEO of wireless network company Uplink, says that due to the increasing need for more wireless hardware connections in the market, new multi-billion dollar giants are likely to emerge from the DePIN industry.
According to data from Messari and DePIN.Ninjia, as of 2023, the DePIN ecosystem had approximately 650 projects, with 250 projects in the computational field and 200 projects in artificial intelligence. This indicates that DePIN has begun to make its mark in the AI and data storage technology fields.
What are the advantages of DePIN?
With more and more devices requiring connectivity, existing infrastructure efficiency is no longer sufficient to meet the demand. This situation has driven the industry’s need for decentralized connectivity solutions. The scalability and sustainability of these solutions will be key to industry development in the coming years.
Advantage 1: Cost-effective
DePIN offers a more cost-effective alternative to traditional infrastructure, as it greatly 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 flexible solutions to adapt to rapidly changing market demands, thereby offering a competitive advantage.
Advantage 3: Decentralization
In addition, the DePIN network consists of thousands of nodes rather than a centralized structure controlled by a single company, making it more resilient against attacks and technical issues.
Despite the many benefits of DePIN, there are still certain challenges that need to be overcome. One major challenge is the volatility of token prices. When token prices plummet and ultimately 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 been around for quite some time before the term gained popularity.
Filecoin – Your personal portable hard drive
For example, peer-to-peer file storage infrastructure Filecoin was born as early as 2014 and is currently the largest DePIN project by market capitalization. Contributors can offer their idle 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 mentioned earlier, anyone can turn their home WiFi into a hotspot provider and earn $HNT tokens. The more people use the hotspots, the more tokens can be earned.
Nevertheless, with advancements in decentralized technology, the future is bound to see more innovative companies transforming 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