DePINs

Decentralized Physical Infrastructure Networks (DePINs) are blockchain-based networks that reward people who contribute hardware like servers and energy grids.

You could think of them as a natural next stage in blockchain’s evolution:

Stage 1

Blockchains are configured to incentivize network participation (e.g. securing transactions and deciding on updates)

Stage 2

Blockchains are configured to incentivize resource contribution (e.g. the physical equipment needed to keep the network running) 

How are people incentivized? With token rewards: payment in the form of a network’s native token (the cryptocurrency that belongs to a specific blockchain and is essential for its functioning). 

An interesting use case is cloud storage. Typically cloud storage is centralized and can lead to predatory pricing and exploitation of personal data. Companies like AIOZ Network are working towards a more distributed model by incentivizing the contribution of hard drives: users with extra hard drive space earn tokens by renting it out. They’re paid by those who need space, thus creating a circular economy.

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The DePIN flywheel 

In theory, DePINs create a flywheel: a system that builds momentum through a positive feedback loop.

Potential uses

Cloud storage

Participants contribute data storage space (instead of a central entity renting it)  

Hardware contribution: Hard drives, Servers

Reward: Network's native token

Purpose: Avoid predatory pricing and mitigate the risk of a single point of failure

Smart cities

Citizens contribute data for city management

Hardware contribution: Sensors, Thermostats

Reward: Network's native token

Purpose: Improve accuracy of data readings to enhance public services 

Ride-hailing apps

Riders and drivers engage directly without intermediaries

Hardware contribution: Vehicles

Reward: Network's native token

Purpose: Removal of intermediary’s profit leads to lower prices for riders and higher earnings for drivers

Decentralized AI

Participants provide computing power for processing AI workloads 

Hardware contribution: Graphics Processing Units (GPUs)

Reward: Network's native token

Purpose: Democratize AI development so that it’s fair, transparent, and beneficial to society

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