The advent of blockchain technology has revolutionized several industries, ranging from finance (DeFi) and gaming (GameFi) to Web2 brands such as Nike for digital fashion and Starbucks for Web3 customer loyalty. However, one area that has remained essentially unchanged is physical infrastructure.
Traditionally, the deployment and management of physical infrastructure, such as telecom networks, cloud services, mobility networks and power grids, have been dominated by large corporations due to their enormous capital requirements and logistical challenges.
As a result, these corporations have had a near-monopoly on pricing, conditions and services offered to end-users, leading to a lack of competition and innovation. That is, until blockchain and Web3 entered the picture.
Most are familiar with DeFi, GameFi, SocialFi and decentralized autonomous organizations (DAOs). DePIN, which stands for Decentralized Physical Infrastructure Networks, is a rising use case with real-world exposure. It utilizes tokens to bootstrap the deployment of physical infrastructure, then creates a network effect that unlocks the novel design space of real-world-based DApps.
DePINs are an emerging crypto trend that leverages blockchain technology to build and operate real-world physical infrastructure and hardware networks in a permissionless, trustless and programmatic way.
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These DePINs are arguably the next evolution of the Internet of Things (IoT) for the Web3 ecosystem or a decentralized IoT where users, device users and businesses own and monetize. DePINs enable globally distributed individuals to collectively build, maintain and operate people-owned physical infrastructure networks without needing a single, centralized entity.
DePINs incentivize supply-side participants to build the network by leveraging crypto-economic protocols, offering end-users more cost-effective and innovative services than traditional models.
The origin of DePIN
In November 2021, our own IoTeX became the first Web3 project to put a name to this up-and-coming economy, calling it MachineFi — or the decentralized machine economy, or IoT. Messari became the first to reference it as DePIN in July 2022.
Token Incentivized Physical Infrastructure Networks — or TIPINs — surfaced the same month. TIPIN describes a network that uses token incentives to motivate individuals to contribute to the deployment and operation of physical infrastructure and hardware networks, creating a more efficient and equitable model for infrastructure deployment.
Then, in August 2022, came Proof of Physical Work (PoPW), which referred more specifically to incentive structures that allow anybody to permissionlessly contribute to a set of shared objectives. Helium, for example, allows its users to contribute to decentralized wireless with hotspots for people to connect smart devices to the intervene in a secure, low-cost and energy-efficient way.
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Hivemapper is another example. It describes itself as a decentralized map built by people using the world’s first crypto-enabled dashcam. And DIMO, a user-owned DePIN platform that allows users to maximize the value of their connected devices, starting with cars.
Additionally, HealthBlocks provides a secure health data sharing and coordination platform by leveraging blockchain and token incentives to create a more efficient and patient-centric healthcare system.
And then, there are DePIN infrastructure providers, such as IoTeX, who offer centralized infrastructure such as W3bstream, developer tools and go-to-market support to enable decentralized infrastructure network projects.
In September 2022, EdgeFi surfaced as a variation of decentralized infrastructure networks focusing on deploying hardware resources closer to end-users at the network’s edge. In short, EdgeFi is a decentralized infrastructure network that prioritizes edge computing.
In November 2022, Messari decided it was time to put a name on Web3 physical infrastructure and carried out a Twitter poll where voters had to choose from PoPW, TIPIN, EdgeFi, and DePIN. They omitted MachineFi. DePIN won with 31.6% of the votes (136).
Web3 physical infrastructure needs a name!
Often referred to as Proof of Physical Work (PoPw), Token Incentivized Physical Networks (TIPIN), EdgeFi, or Decentralized Physical Infrastructure Networks (DePIN), crypto has yet to reach a consensus.
Vote below, or add a suggestion⬇️
— Messari (@MessariCrypto) November 5, 2022
And in December 2022, Messari mentioned it in research for the first time, saying it would “be one of the most important areas of crypto investment for the next decade.”
How does DePIN work?
DePINs utilize blockchain technology and crypto-economic protocols to enable globally distributed individuals to collectively build, maintain and operate physical networks in a trustless, permissionless and programmatic manner….
cointelegraph.com