Only one industry is more fashion-driven than the women’s clothing industry – the evolving crypto space. The ongoing merger between cloud computing and developments within the crypto space is sufficient evidence that “You Ain’t Seen Nothin’ Yet.”
Although it’s a relatively new concept, DePIN (Decentralized Physical Infrastructure Networks) is now a central theme within the Web3 space. This guide discusses the importance of DePIN within the crypto universe and lists the best projects to watch in 2024.
Related: Top Blockchain Projects of 2024
What is DePIN?
DePIN, aka decentralized physical infrastructure networks, refers to a peer-to-peer (P2P) network that meets hardware and is designed to provide services via an open and decentralized marketplace. The innovation uses blockchain technology to modernize how ordinary persons can utilize and benefit from the concept of decentralization.
Cryptocurrencies are at the heart of the DePIN movement as they use crypto incentives to attract decentralized infrastructure networks. By using token-based incentivization, the concept encourages the development and creation of physical structures like power grids, mobility networks, wireless networks, and cloud services. DePIN aims to restore public trust and enhance the popularity of blockchain technology as the Web3 movement gathers steam.
How Does DePIN Work?
DePIN works by establishing a link between a blockchain network and tangible physical infrastructure. Users with unused computing power, spare storage space etc., contribute their resources to the DePIN network with the blockchain verifying ownership and facilitating transactions.
The function requires four essential elements, namely an off-chain network, a blockchain, protocols, and token incentives:
- Off-Chain Network: A DePIN off-chain network includes a service provider and user. The user needs wireless connectivity, GPU computing power, and data storage, which they can buy from open marketplaces.
- A Blockchain Network: The blockchain connects the service provider and end users, serving as a public ledger to handle escrow contracts and payments for all transactions. Transactions between service providers and end users are recorded on-chain and time-stamped and can be easily tracked on the blockchain.
- Protocols: The protocol, which refers to the encoded rules, determines precisely how a particular DePIN functions. The rules are designed to assess service provider eligibility, a DePIN’s security measures, the crypto token in circulation, and service provider-user interaction, among other details.
- Token Incentives: DePIN networks use cryptocurrency tokens to reward participants. The tokens are a digital way of appreciating participants for their contribution to the decentralized infrastructure networks. The projects employ tokenization, an approach that closely mirrors liquidity incentives as found in the play-to-earn and DeFi sectors to offer faster and more cost-effective infrastructure development.
Benefits of DePIN within the Crypto Space
DePIN projects decentralize the market for hardware infrastructure by eliminating centralized Big Tech domination and giving power to the end-user. Some of the advantages of DePINs over the conventional centralized infrastructure systems include:
- Greater Efficiency: DePINs optimize resource allocation by using underutilized resources across networks, thereby reducing inefficiencies.
- Improved Resilience: Decentralized infrastructure networks are not as vulnerable to failure, making them more dependable and robust.
- Reduced Costs: DePIN’s removal of large, centralized infrastructure projects, DePIN has the potential to reduce costs for users.
- Transparency and Security: Integrating blockchain technology introduces transparency in transactions, providing a secure way to track resource utilization and ownership.
The Best DePIN Crypto Projects to Watch in 2024
The following are among the best DePIN projects currently in the market:
Helium Network (HNT)
Helium is a decentralized blockchain-based network offering wireless connectivity to IoT devices. The project uses affordable, long-power radio technology for IoT devices, especially in areas with little or no wireless coverage, and offers affordable, secure, wide-area connections.
The Helium Network (HNT) comprises easy-to-use wireless devices called Hotspots, which provide coverage that’s 200 times stronger than regular Wi-Fi. Additionally, the Hotspots also act as crypto miners within the Helium blockchain and earn HNT tokens for moving device data and expanding the network. Users can own and set up Helium nodes in their homes or offices and earn rewards in Helium Network Tokens (HNT) for their contribution to the network.
Filecoin (FIL)
Filecoin is a P2P network designed to store files. It uses cryptography and has built-in financial incentives to guard files safely over time. Filecoin pays storage providers, referring computers that can be used to store files and prove they were stored correctly over time. Users who join Filecoin can choose whether they want to store their files or get paid to store other people’s files. Filecoin facilitates an open market system where a single entity doesn’t control the amount of storage available or the price for storage.
Theta Network (THETA)
The Theta network (THETA) is a new blockchain-based project specializing in media, entertainment, and artificial intelligence (AI). The project enables existing video and media platforms to reduce their costs and earn cash as users get rewards for sharing their bandwidth and storage space with other devices.
THETA is compatible with the Ethereum blockchain and employs smart contracts, making it well-suited for different Web3 applications. Media and entertainment platforms can use it to incorporate unique NFT tokens, DeFi projects, and decentralized organizations (DAOs).
Arweave (AR)
Arweave is a decentralized blockchain-based storage network that leverages the elements of blockchain to offer secure, permanent, and affordable data storage solutions. The project proposes “blockweave,” a new approach to data storage that guarantees immutability and permanence.
The project allows users to pay a one-time fee to store their data securely on the Arweave network and avoid the need to pay recurrent storage fees. Arweave focuses on attributes like security, permanence, and affordability, aiming to disrupt regular cloud-based storage solutions by introducing a centralized storage approach.
IOTA (IOTA)
IOTA is a renowned user of blockchain technology, specifically for the Internet of Things (IoT), which uses the Tangle consensus mechanism to facilitate scalable operations and feeless transactions. The Tangle is designed to improve efficiency and become more scalable as network activity increases by facilitating micro-transactions that enable flawless machine-to-machine communication. The adoption of IOTA’s innovative technology could revolutionize different industries, including intelligent cities and the automotive and supply chain industries.
Krest
Krest is a DePIN platform that combines socio-economic, technical, community, and governance innovation through a notable feature within the PEAQ ecosystem using its ‘Economy of Things Simulation Network.’
As the world’s pioneer simulation network of its kind, the ecosystem is designed to enable builders to deploy and launch IoT and DePIN projects in a safe environment and test on a live blockchain where they’re shielded from real-world harm. Krest also facilitates the live testing of IoT hardware and connections, thereby enhancing simulations using real-world data. Krest aims to bridge the gap that exists between theoretical IoT and DePIN applications and their actual implementation.
Conclusion
DePIN plays an integral role within the crypto and nascent Web3 ecosystem by merging blockchain technology’s elements of decentralization with physical and cloud-based infrastructure. This creates an environment where no government or Big Tech company can shut down a project arbitrarily, especially when blockchains have their computing infrastructure. DePIN projects and DePIN cryptocurrencies exist to enable these networks to incentivize individual players globally to contribute infrastructure, with the tokens themselves serving as payment. As the adoption of DePIN projects continues to increase, the demand for decentralized solutions to existing world problems could eventually grow and help to diversify crypto investment options.
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