In this post, we’ll unpack all you need to know about Decentralised Physical Infrastructure Networks (DePIN), defining exactly what they are, how they work, advantages and disadvantages, an example and more.
What Are Decentralised Physical Infrastructure Networks (DePIN)?
Decentralised Physical Infrastructure Networks (DePIN) refer to networks where the physical infrastructure is operated in a decentralised manner.
Centralised Versus Decentralised Networks
Centralised networks concentrate control and ownership across a small number of entities.
Decentralised networks distribute control and ownership across a large number of entities.
The shift from centralised to decentralised networks represents a significant change in how we manage and also interact with critical infrastructure.
How They Work
Decentralised Physical Infrastructure Networks leverage blockchain technology to develop, operate and maintain physical infrastructure in a decentralised manner.
DePIN operate through a distributed network of nodes (devices), each contributing to the overall operation and maintenance of the network. In return, participants are rewarded with tokens.
All transactions and interactions are recorded on a public ledger, thus ensuring transparency and accountability. Smart contracts automate processes, reduce the need for intermediaries as well as enhance efficiency.
DePIN networks allow for the aggregation and coordination of resources.
Modelling DePIN On The Body
Decentralised Physical Infrastructure Networks (DePIN) can be likened to the human body’s circulatory system.
- Nodes As Cells
In DePIN, individual nodes (devices) is akin to individual cells in the body. Just as each cell performs specific functions and contributes to the overall functionality of the body, each node in a DePIN performs specific functions and contributes to the overall functionality of the network.
- Data Flow As Blood Circulation
In DePIN, the flow of data is akin to the flow of blood in the body. Just as blood delivers oxygen and nutrients to cells and removes waste products, data packets deliver information to nodes and therefore help in the execution of tasks.
- Decentralized Control As The Autonomic Nervous System
In DePIN, decentralised control is akin to the autonomic nervous system in the body. Just as how autonomic responses adjust bodily functions based on real-time conditions, nodes autonomously adjust network operations based on real-time data.
- Redundancy & Resilience As Immune Response
In DePIN, the network’s resilience and redundancy is akin to the body’s immune response. Just as the immune system can identify and respond to threats ensuring the body remains robust and functional, nodes can identify and respond to disruptions, therefore ensuring the network remains robust and functional.
- Distributed Resources As Nutrient Distribution
In DePIN, the distribution of resources is akin to the distribution of nutrients in the body. Just as nutrients are directed to where they are needed most in the body, resources are directed to where they are needed most in the network.
Advantages & Disadvantages
Advantages of Decentralised Physical Infrastructure Networks include increased security, transparency, resilience, decreased risk of monopolistic practices and also increased innovation and competition.
Disadvantages of Decentralised Physical Infrastructure Networks include regulatory hurdles, scalability issues, the need for widespread adoption and also interoperability.
A New Chapter
The genesis of DePIN marks a new chapter in human economic history, where societal infrastructure is funded, owned and operated by the people and not by governments or corporations.
DePIN & Wealth
DePIN enables the distribution of wealth. It democratises wealth creation by allowing individuals and organisations to own, invest in and thus profit from infrastructure projects.
What Is An Example Of A DePIN?
A real world example of a Decentralised Physical Infrastructure Network is World Mobile ($WMT).
World Mobile aims to provide affordable and accessible internet connectivity by leveraging a DePIN model and thus allowing local entrepreneurs to host and operate network infrastructure and share in the revenue.
This model not only enhances connectivity but also stimulates local economies and promotes digital inclusion.
Summary (TL;DR)
Decentralised Physical Infrastructure Networks refer to networks where the physical infrastructure is operated in a decentralised manner.
DePIN leverage blockchain technology and operate through a distributed network of nodes, each contributing to the overall network. In return, participants are rewarded with tokens.
Advantages include increased security, transparency, resilience, decreased risk of monopolistic practices and also increased innovation and competition. Disadvantages include regulatory hurdles, scalability issues, the need for widespread adoption and also interoperability.
