Web3 has evolved into an expansive ecosystem that has seen the rise (and fall) of many associated technologies and narratives. But one narrative that has continued to preserve and show strong potential to holistically transform and alter the provider-user dynamics via infrastructure is DePIN.
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The Need for Web3
One of the biggest challenges of modern computing has always been infrastructure. A few decades ago, the cost of acquisition, set-up, and management of computing infrastructure was a major constraint for many potential tech players.
Then, in the 2000s, Amazon started a revolution with Amazon Web Services, releasing EC2 and S3 in 2006. A couple of years later, Google and Microsoft would also pitch in with their respective platforms, creating a template for what we now know as cloud computing. This new model allowed business owners to optimize their products and services while outsourcing computing requirements and responsibilities. Time to market for businesses improved, overhead costs decreased, and data insights from the cloud provided new insights to enhance service delivery.
Unfortunately, what began as an innovative solution soon became a rather dicey quagmire. While centralized infrastructure offered easy accessibility, seamless onboarding, and other perks, the concentration of more than 70% of global digital business and technology on only a few centralized providers came with severe implications. One was due to a single point of failure inherent to most centralized architecture. In the face of escalating cyber-attacks, SPF presents a serious disadvantage.
Another was the immense control and ownership exerted by centralized providers and social media platforms. The previously “free web” became monopolized, with growing cases of censorship, de-platforming, and even worse, outages. Major providers’ service downtimes meant untold losses for businesses and organizations reliant on their services. An example can be drawn from the recent CrowdStrike IT outage. Aviation systems shut down, medical systems failed, and millions of devices were affected globally.
Vendor lock-in was also a serious drawback. To discourage clients from leaving their platforms, centralized providers often optimized applications only for their own platforms. Thus, it was difficult and financially draining for clients to migrate even in less-than-ideal situations.
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Thankfully, Web3 came to the rescue.
Web3-DePIN: The Nexus
Building the next iteration of the web on a decentralized technology restores control to the people and eliminates monopolization. But more importantly, it allows delivery of fast, efficient, and personalized service away. Internet users retain ownership of their data, determine how it is shared with businesses and advertising companies, and get rewarded for participation.
But what if Web3 could do much more?
Decentralized physical infrastructure networks (DePIN) broaden Web3’s horizons by enabling industries to be completely transformed by leveraging decentralized technology. Instead of relying on centralized corporations to provide critical infrastructure, DePIN utilizes blockchain technology to coordinate a network of participants who contribute their resources and provide valuable services.
Picture Uber. The company does not necessarily own a fleet of cars for its business. Rather, it relies on incentivized drivers ‘contributing” their physical infrastructure (in this case, a car) and resources (driving skills) to the network, which other users can then leverage. DePIN operates a similar mechanism using decentralized providers of physical infrastructure and blockchain.
DePIN removes the high barrier of entry that comes with providing infrastructure by eliminating overhead costs like acquisitions of building, hardware and maintenance. Instead, the physical infrastructure is provided by network participants, who receive incentives in return. All of these runs on the blockchain ensuring verifiable proof of contribution and transparency.
DePIN In The Now
Applications for DePIN cut across different sectors, providing a viable solution to the infrastructure problem. Startups and small businesses can easily access cloud infrastructure via decentralized marketplaces at competitive pricing. DePIN also provides an alternative to GPU availability and accessibility problems. A good example is the FluxEdge marketplace, which offers clients enterprise- and consumer-grade hardware to carry out compute-intensive tasks like AI, rendering, and more.
One strong advantage of DePIN is its massive scale. As opposed to setting up large, individual infrastructures in designated areas, new hardware can easily be added to DePIN networks, allowing projects to onboard new hardware quickly and with much more room for flexibility.
Decentralized wireless networks, for example, are making it easier for people around the world to access the internet. In India, a DePIN-based internet service provider, Wifi Dabba, is working hard to decentralize access to the internet and improve internet penetration using the Solana blockchain. DePIN projects have also recorded substantial success in areas like decentralized storage. By relying on a distributed network of completely independent nodes, DePIN offers better resilience and security, as the files are completely encrypted, split, and shared across different endpoints.
The developing world presents an untapped potential for DePIN to flourish and deliver astounding results even in cases where centralized infrastructure has failed.
DePIN In The Future
As the world rapidly adopts AI tools and technologies, DePIN offers perhaps the most sustainable way to address the infrastructure question. From making compute resources available via decentralized platforms to providing an advanced layer of security to protect against malicious attacks and outages, DePIN holds the key to the future of emerging technology through its ability to make infrastructure available and accessible.
DePIN repositions users at the core of infrastructural decisions instead of corporations, allowing communities to self-govern. Thus, a sense of ownership and responsibility is created, which encourages and drives adoption.
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Like all innovative technologies, however, DePIN is far from perfect. There are still a few hurdles to scale. These include regulatory frameworks for customer protection, transactions, and performance optimization to ensure DePIN projects can favorably compete with centralized options on all fronts. Plus, there is the question of interoperability since as DePIN projects become more mainstream, there will be the need for projects to interact across their different blockchains, exchanging data to improve efficiency.
Fortunately, there is no cause for alarm; the DePIN sector continues to show remarkable resilience despite ever-changing consumer inclinations and industry trends. Given time, some fine-tuning, and sustained public interest, DePIN may prove to be perhaps the greatest narrative ever to emerge from Web3.
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