DePIN (Decentralized Physical Infrastructure Networks) refers to decentralized physical infrastructure networks. It utilizes blockchain technology and token rewards to incentivize individuals and businesses worldwide to build any physical infrastructure (such as WiFi, hard drive storage, batteries, etc.). It’s about sharing surplus energy like computer hard drives and WiFi and earning token rewards. As the distributed physical infrastructure network (DePIN) rapidly evolves, a new ecosystem that uses blockchain technology is gradually emerging.
In April 2024, DePIN projects led by peaq successfully raised $15 million for ecosystem expansion. Additionally, projects like Helium integrating with Solana enhanced network scalability, reduced costs, and made decentralized wireless networks a reality, thereby promoting community autonomy and technological democratization.
DePIN covers a wide range of industries, mainly categorized into Physical Resource Networks (PRN) and Digital Resource Networks (DRN). PRNs utilize blockchain and token incentive mechanisms to attract individuals or businesses to use their physical hardware or facilities to participate in networks providing tangible goods and services. For example, a decentralized solar panel network might provide renewable energy, and participants earn token rewards by contributing to electricity production. DRNs encourage people to lend their hardware resources for digital domain tasks like blockchain validation or distributed data storage.
DePIN optimizes resource allocation, reduces waste, improves efficiency through blockchain-driven automation management, and provides infrastructure for environmental and sustainable projects. By reducing reliance on large-scale capital investment and centralized management, DePIN enables small businesses and entrepreneurs to enter the market at lower initial costs. Its decentralized nature reduces the control of a single entity over the market, providing a more equal competitive environment for more participants.
Challenges and Solutions of the DePIN Project
In the process of integrating blockchain technology with physical hardware, the DePIN project faces unique challenges in technical architecture design and implementation. These challenges involve software-level innovations and deep integration with physical infrastructure.
Integration of Physical Devices and Data
The core of the DePIN project lies in the construction of physical devices and data integration. “Device construction must not only meet technical requirements but also consider cost-effectiveness and market acceptance,” he explained. This includes collaboration with sensor manufacturers, air quality monitors, or refrigerator manufacturers. The DePIN project can also be installed as an application on existing hardware devices such as smartphones. This strategy solves connectivity issues in the supply chain and facilitates rapid iteration and optimization of products.
Performance Bottlenecks and Storage Consensus
The biggest challenge brought by integrating DePIN projects with physical infrastructure is performance issues. Considering the possibility of hundreds of millions of devices needing to operate concurrently on the blockchain, existing blockchain infrastructures cannot meet this demand. In the impossible triangle problem, blockchain must balance security, scalability, and decentralization. Although some high-performance chains like Solana have attracted many DePIN projects this year, such solutions may only be suitable for minimum viable products (MVPs). There should be a balance between decentralization and a certain degree of centralization.
MPC and Its Integration with DePIN
The emergence of MPC addresses the contradiction between individual privacy and data security. For applications like geolocation services, users want to ensure their privacy while also ensuring the system’s fairness. MPC technology makes it possible to perform calculations on data without revealing personal sensitive information. This means that in the DePIN ecosystem, data can be computed and analyzed without disclosing users’ personal data. It ensures that each user is treated fairly.
Data and functionality are crucial for the DePIN project. MPC technology allows access to public data and enables the computation of users’ private data. This allows the DePIN project to ensure user data privacy while allowing data monetization, providing new opportunities and possibilities for the development of the entire ecosystem.
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