Web3 loves its acronyms almost as much as the American government does. From DeFi to NFTs and DAOs to POAPs, and with a million tokens ranging from BTC to ETH to DOGE in between, there’s absolutely no shortage of them in the crypto industry.
These acronyms exist for a good reason, with terms like “decentralized physical infrastructure network” being a real mouthful at the best of times, especially when you’re going to repeat it as many times as we do in this article. And although they might seem confusing, they’re important to know, as they represent some incredibly innovative ideas that promise to change the world, and the latest one is DePIN.
In case you hadn’t already guessed, DePIN is shorthand for the aforementioned decentralized physical infrastructure networks. It’s an idea that promises to morph blockchain from its relatively niche role as the foundation of crypto into the backbone of tomorrow’s internet, transforming industries such as communications, energy, smart cities and more besides.
Defining DePIN
We’ve already told you what DePIN means, but what we haven’t explained is what those networks actually do, or how they’re different from traditional networks.
In a nutshell, DePIN refers to networks that use digital tokens to encourage users to participate. These tokens are cryptocurrencies, and they give users an incentive to provide the physical real-world infrastructure networks need to exist. The DePIN itself is essentially just a decentralized application, or software, that governs how the blockchain network is run and what its intended purpose is.
The digital tokens are a key component, acting as the network’s native cryptocurrency. They’re used to pay for access to network resources and products or services built atop of it, and they also provide an incentive for users to contribute hardware or some other resource required for the network to operate.
The resources are real-world devices such as smartphones, PCs, servers or even robots and vehicles, which collaborate to provide something of value to network users.
DePIN In The Real World
If you’re still in the dark about DePIN, let’s take a look at a couple of real-world examples. Following are some of the real world examples of real-world DePIN projects;
MapMetrics
One of the best known DePIN initiatives is MapMetrics, which is building a mobility DePIN that lets drivers earn rewards for helping to map the world’s roads and monitor traffic conditions. The way it works is that you download MapMetrics’ mobile navigation app onto your smartphone device, and use it instead of a legacy application such as Google Maps or Apple Maps.
You might be wondering why you should bother. After all, Google Maps is pretty damn reliable already, isn’t it? Well, it may well be, but the truth is that it doesn’t give you much in return, except for getting you to where you want to go. But with MapMetrics, you’ll not only find your way, but you’ll be rewarded for doing so.
While Google Maps harvests your geo-location data for free, MapMetrics allows you to contribute this information in a completely anonymous way, and receive digital tokens in return for doing this. The data it collects is used to form a picture of real-time traffic conditions that benefits other MapMetrics users, helping them to navigate through the rush hour traffic more easily. Simply by switching your smartphone on and running the app, it will drip-feed tokens into your wallet, which can later be used to pay for products and services in the MapMetrics ecosystem, or simply sold on an exchange.
In this way, everyone who downloads and runs the MapMetrics app becomes a part of its decentralized DePin network. The smartphones are the physical hardware, and they work together to provide a valuable service for other users.
DataGram
For another example, let’s take the communications platform DataGram, which offers a decentralized infrastructure network built on the Avalanche blockchain.
DataGram is a bit more complex, with participants ranging from full core node operators to partner and device nodes, with each one playing a specific role. The full core nodes are more powerful bits of hardware – computer servers – which provide the compute, bandwidth and uptime needed for its communications network. As for the partner and device nodes, these are lower-power devices such as smartphones, routers, and laptops, which can provide resources to help with load balancing and the distribution of computations.
The DePIN network runs a software platform that enables secure messaging, video conferencing, and peer-to-peer features, with all of these functions available via a standard Chrome-based web browser. Besides running these services, the decentralized software platform keeps a transparent, on-chain record of the contributions of each node, ensuring that everyone is rewarded fairly, based on the resources they provide.
DataGram’s DePIN supports a number of real-world applications, serving as a foundation for decentralized messaging platforms that enable users to communicate via encrypted messages without using centralized servers, meaning more privacy. It also enables secure video conferencing at much lower costs than centralized providers, as well as a platform for edge computing use cases such as smart meters, weather sensors and traffic lights. In these scenarios, data can be processed locally, reducing latency and bandwidth.
Other applications include disaster response. When traditional networks fail due to natural disasters or government interference, DataGram provides a way to maintain connectivity and data security, as decentralized networks have no single point of failure.
Best of all, DataGram keeps the communications infrastructure simple, helping businesses and individuals alike adopt DePIN without any technical skills, paving the way for the technology’s growth.
Other Examples
There are many more examples of DePIN networks. In fact, they’re surprisingly widespread, supporting dozens of different use cases.
One of the oldest and best known DePINs is Filecoin, which provides access to decentralized storage resources in the cloud via an open market. Users with storage space can sell that resource to others who need somewhere to store their data, with payments handled by the FIL token. The data is always encrypted, and the system integrates economic incentives to promote good behavior among storage nodes, ensuring they’ll act honestly and reliably.
A different take on this is Akash Network, which provides a decentralized marketplace for cloud computing resources, such as GPUs and CPUs, which can be rented out to other users. Similar to this, Render Network is building a network of GPUs specifically for designers looking for low-cost access to cloud-based graphics engineers to power their image rendering workloads.
You may have also heard about BitTorrent, which is a peer-to-peer protocol that leverages blockchain for decentralized file sharing. Users earn BTT tokens as an incentive to continually share files with the network, which could be a movie file, a game or something else. Those files are broken down into smaller chunks, and can be downloaded from multiple sources at once. Users can pay BTT tokens to access higher download speeds.
Driving The Web3 Revolution
DePIN networks provide real-world services to real-world people using real-world devices, with the infrastructure governed by its users, rather than a single, all-powerful entity, ensuring everyone has control over them.
It’s for this reason that DePIN is much more than just an alternative network model. Rather, DePIN is a movement that allows everyone to participate in keeping their favorite services up and running, while earning rewards for helping to do so. It is the perfect embodiment of the shift from Web2 to Web3 is really all about.
They have the potential to redefine network ownership and accelerate Web3’s adoption, and the real beauty of it is that most of its users won’t even realize they’re willing participants in this global revolution.
