In today’s digital landscape, a small number of companies hold significant control over the internet. These companies benefit from their size and regulatory protection, allowing them to dominate critical aspects of the internet infrastructure. However, their monopoly in the industry has resulted in reduced competition, leading to higher prices and limited choices for end users.
A solution to this problem comes in the form of Decentralized Physical Infrastructure Networks (DePIN). These platforms, built on public blockchains, aim to return control of the internet infrastructure to the users it is meant to serve. DePIN enables individuals to contribute their own resources, such as electricity and internet connection, in exchange for micropayments. This innovative approach allows protocols to create extensive infrastructure without bearing the entire financial burden.
DePIN not only makes it easier to start businesses in sectors with high barriers to entry but also revolutionizes the way networks are built. By leveraging the power of communities connected through the internet, DePIN introduces a new model that rewards contributors with both ownership and cash. This model has become increasingly relevant in today’s changing world.
Over 1000 companies have already embraced DePIN to challenge established incumbents. Filecoin, for example, has disrupted the storage industry by enabling businesses with excess storage capacity to compete with centralized giants like Amazon. By utilizing a token mechanism, Filecoin has created a competitive storage marketplace that offers cost advantages, security, and accessibility.
Other DePIN networks, such as Akash Network and Helium, focus on providing digital commodities like compute power and bandwidth. Akash allows individuals with GPUs to lease resources to developers in need of compute power, while Helium aims to crowdsource bandwidth by incentivizing people to deploy routers and provide internet services. Each of these projects harnesses the power of communities to offer different digital commodities.
The DePIN business model challenges the traditional approach of incumbents in creating digital commodities. Instead of relying on long-term contracts and upfront costs, DePIN projects embrace a pay-as-you-go model that benefits the end customer. This flexibility, combined with the ability to crowdsource supply, positions DePIN networks as ideal candidates for Infrastructure-as-a-Service (IAAS) models.
While still in its early stages, DePIN has the potential to disrupt the dominance of incumbents in cloud services. By strategically incentivizing capacity, DePIN networks can significantly lower production costs and offer services at a fraction of the price. This has the potential to incentivize broader use of internet services with fewer barriers to entry, resulting in increased societal welfare.
In conclusion, DePIN represents a path to challenge established internet incumbents without the need for competing central financing. By driving down the price of digital commodities and empowering communities, DePIN networks can create massive economic value and transform the way we utilize the internet.