Decentralized Physical Infrastructure Networks (DePIN) Will Improve Latin America and the World.
Blockchain technology is disrupting markets not because of its innovation within software, but rather its overall architectural design. Instead of centralized servers or data rooms that house the information of a network, the process is more democratized through decentralization, distributing the powering of the networks among thousands of participants. The technology has been implemented brilliantly by tokenizing our most popular use cases — payments & stablecoins, lending and borrowing, and real world assets. Now, we’re seeing its use cases evolve through tokenization of real world data, often described as the internet of things.
DePIN or decentralized physical infrastructure networks, are one of this definition’s most innovative cases, changing the way real world localized information can be processed, shared, and tokenized.
As opposed to improving the exchange of physical or digital goods through tokenization, DePIN is being implemented to improve the way important data and information is being collected, shared and monetized. Its main applications are focused within cloud storage, wireless networks, sensor networks and energy grids, and millions have flown into companies building on these themes in 2024.
In a traditional Web2 model, a centralized company would manage the data sourcing, processing and distributing of the service. For example, in some regions of the world (Bogotá not excluded from this list) weather patterns are more difficult to predict. The efficiency and effectiveness of predictive models within weather is limited to a network of meteorological devices, often backed by government or private infrastructure (centralized). The resources deployed to source and manage this information is oftentimes costly.
DePIN is disrupting this model because instead of this infrastructure being privately backed, its information grid is decentralized and powered by individual users. Building the infrastructure is much faster and significantly cheaper, and can be powered by mobile or affordable remote devices. More data points can be connected to the information grid oftering a more robust network. Data can be more “real” and localized to specific cases or geographic regions. It’s permissionless and can scale indefinitely across regions and jurisdictions. And the data will be collectively owned and processed making information real-time.
Users can access and experience the information through dApps (decentralized applications or apps that are permissionless) and pay for the service via the tokens on the network. These tokens are then used to compensate the individuals who power the network and dApps. It’s not web 3.0, it’s communication 3.0. The model is ingenious and could forever change how we process important intangible information.
The use cases span widely, apart from weather, many cities need to collect more data on issues relating to noise, pollution, wireless internet connectivity and green carbon-neutral energy grids (Bogota once again not excluded from this list). If every Uber driver in the city could use their smart device to power more traffic or pollution data while keeping their day job, the information could be used to vastly improve infrastructure. The pieces of the puzzle are already there, and they don’t need to be put together, they just need to be connected.
The public crypto markets just crossed $2.5 trillion dollars in total market capitalization. DePIN’s real world use case could double it.
