DePIN Is the Sharing Economy 2.0

I was climbing rooftops and installing antennas long before “DePIN” was a word. So you will understand my conviction in this space and forgive my unfaltering faith in its success.

Let me start from the beginning.

This op-ed is part of CoinDesk’s new DePIN Vertical, covering the emerging industry of decentralized physical infrastructure.

As the co-founder of Hotspotty and depinhub.io, I have been deeply embedded in DePIN well before it had a name. From my perspective, DePIN (Decentralized Physical Infrastructure Networks) is not merely an incremental innovation, but a fundamental shift towards a new economic paradigm: the Sharing Economy 2.0.

We can debate this, but in my view, DePIN is at least as transformative, if not more, than decentralized finance (DeFi).

The crypto revolution has highlighted the inefficiencies in centralized and intermediated financial services. Intuitively, anyone can understand that similar inefficiencies exist in non-financial centralized infrastructure, like telecommunication networks or energy grids. In our increasingly interconnected world, the limitations of traditional centralized infrastructure, marked by inefficiencies, high costs and vulnerability to failures have become ever more evident.

DePIN tackles these issues by decentralizing the deployment and management of physical infrastructure. There’s no reason why the promise of crypto — to democratize access, catalyze innovation, and ensure transparency, security, and efficiency through blockchain technology and smart contracts — shouldn’t extend to non-financial infrastructure. DePIN proves that point.

Imagine a world where anyone can contribute to and benefit from decentralized networks of solar panels, communication towers or electric vehicle charging stations

Imagine a world where anyone can contribute to and benefit from decentralized networks of solar panels, communication towers or electric vehicle charging stations. This model reduces dependency on large corporations, cuts costs and enhances system resilience.

The story of a project called Helium, which now boasts almost 1 million wireless hotspots, can demonstrate the power of this ecosystem. Known as the “father” of DePIN, Helium achieved the fastest infrastructure deployment in history. They successfully bootstrapped a decentralized wireless network globally using minimal capital and operational expenditure. By leveraging blockchain technology and offering rewards to participants, Helium created a robust, scalable and efficient network. This success illustrates how decentralized incentives can drive rapid network growth and adoption, providing a blueprint for future DePIN projects.

DePIN could also drive the next wave of the sharing economy. Unlike platforms such as Uber and Airbnb, DePIN’s Sharing Economy 2.0 is characterized by decentralized ownership and control, offering a more equitable distribution of value. Participants can earn rewards for their contributions, aligning incentives and fostering collaboration, thereby democratizing access to critical infrastructure and promoting economic inclusion.

But let’s not be naive. The DePIN path is not a walk in the park. Another word for decentralization is fragmentation. So the ecosystem’s greatest asset is also its biggest challenge.

The fragmentation and complexity of the ecosystem, with projects involving various aspects such as blockchain, hardware, and infrastructure, keeping track of all developments and opportunities can be complex. To profit from DePIN, it’s necessary to understand the use-case, the hardware, and the tokenomics of a project. This is the supply side. For the demand side to truly and sustainably take off, there’s a lot of translation that we, as an industry, need to do to integrate with the real-world economy. This work is essential to onboard the next millions to Web3 and make DePIN a success story.

The good news is that DePIN is an easy conversation-starter. Most people can understand, at least conceptually, the idea of building an Airbnb for GPUs in a world when GPUs are scarcer and scarcer. This brings the supply side and the demand side on the same page quickly. The hard work is to keep them there — the dependability, the resilience, the maintenance of the decentralized networks.

DePIN represents more than just a technological advancement; it is a fundamental shift in how we build, operate and interact with physical infrastructure. Personally, I like to think that DePIN is what crypto was made for. It embodies the principles of decentralization, transparency and community-driven growth, offering a path to a more inclusive, sustainable, and resilient world. Together, we can explore and shape this exciting new frontier. LFG!

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Edited by Benjamin Schiller.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Categories

Get latest news delivered daily!

We will send you breaking news right to your inbox

4Coinz ©. All rights reserved.