Little Learnings #9
What Is DePIN, and Why Should You Care?
Welcome to Little Learnings, a series of educational posts I release every Friday where I pick a topic and break it down as simply as I can.
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What Is DePIN, and Why Should You Care?
A lot of crypto narratives sound good in theory but fall apart when you ask the simple question of who is actually using this.
DePIN is one of the few corners of crypto where the answer is real customers paying real money for real services. Not huge by crypto standards, but the trend line is up and to the right, and the revenue is real.
What it means
DePIN stands for Decentralised Physical Infrastructure Networks. The idea is simple. Instead of one company owning all the GPUs, hard drives, or wireless towers, the network is built by thousands of individual contributors. Anyone with the right hardware can plug in and earn tokens for the work they do.
Traditional model: AWS owns the data centres and rents them out. Profit goes to Amazon.
DePIN model: people run GPUs at home, the protocol pays them in tokens, customers pay the network to use those GPUs. Profit goes to contributors.
The main categories
GPU compute & AI infrastructure. Networks that aggregate GPUs from independent operators and rent them out for AI workloads and rendering. The hottest category right now because of AI, obviously.
Wireless & telecom. Mobile networks built on community deployed hotspots, often partnered with traditional carriers for fallback coverage.
Storage. Decentralised storage networks that pay people to store data on their hard drives, increasingly used for AI training data and Web3 applications.
Data networks. Networks that crowdsource real world data collection. Things like mapping via dashcams, sensor networks, or monetising idle internet bandwidth for AI training.
AI networks. Decentralised networks for AI model training and inference, where models compete for rewards or where users access compute through token staking.
Why I find it interesting personally
DePIN is one of the rare places in crypto where the technology touches the physical world in a way you can actually see and use.
We have spent decades building infrastructure by companies raising infinite capital to build huge data centres, and DePIN is an alternative option that once again returns power and rewards back into the hands of “the people”. The hardware is already out there in billions of homes and pockets. The missing piece was a way to coordinate contributors and pay them fairly for useful work, which is exactly what blockchains can be good at.
The implications get more interesting the further you zoom out. If this works, infrastructure stops being something owned by a handful of giant companies and starts being something owned by anyone willing to participate. A mobile network without a telco, a cloud without AWS, or a mapping service without Google. None of these have been possible before because coordination at that scale used to require a central authority.
Whether DePIN ends up being the model that wins or just a stepping stone to something else, the experiment is one of the more interesting things happening in tech right now.
One of those things in crypto that I think is worth paying attention to even if you never touch a token.
For now, thanks for reading, see you next week with another little learning!
Disclaimer: The content covered in this newsletter is not to be considered as investment advice. I’m not a financial adviser. These are only my own opinions and ideas. You should always consult with a professional/licensed financial adviser before trading or investing in any cryptocurrency related product. Some of the links shared may be referral links.