DePIN: It’s Time for Crypto to Get Real

Few
things
get
your
average
crypto
enthusiast
as
excited
as
a
brand-new
cryptic
abbreviation
to
rally
around.
This
cycle,
the
DePIN
banner
is

flying
high,
and
compared
to
some
of
the
past
crazes,
this
one
is
actually
pretty
wholesome.
Not
just
that
—
it’s
exciting,
it
has
a
ton
of
potential,
and
it
marries
Web3
and
the
real
world
in
a
way
that
actually
makes
sense…
All
while
being
a
beast
the
mainstream
crypto
space
is
unprepared
for.

Why?
Before
we
dive
into
that,
let’s
quickly
put
the
spotlight
on
the
“what.”

For
now,
quite
a
few
people
—
even
crypto-natives
—
arch
their
eyebrows
at
the
mention
of
DePIN
as
the
term
is
yet
to
fully
settle
in.
So
in
the
interest
of
clarity,
DePIN
stands
for
Decentralized
Physical
Infrastructure
Networks,
or
in
simple
terms,
real-world
applications.
DePINs
leverage
tokens
to
incentivize
people
to
set
up
hardware
for
providing
and
rendering
real-world
services.
Think
car-sharing,
peer-to-peer
solar
power
trading,
5G
or
WiFi
connectivity,
street
mapping,
electric
vehicle
charging,
environmental
data
collection
through
smartphones,
and
other
exciting
use
cases.

This
op-ed
is
part
of
CoinDesk’s
new
“DePIN
Vertical”
devoted
to
exploring
the
future
of
decentralized
infrastructure.

As
an
example,
consider

Silencio,
which
enables
people
to
record
noise
pollution
levels
with
their
smartphones
and
earn
token
rewards
for
it.
Another
DePIN,

Wingbits,
uses
tokens
to
incentivize
people
to
set
up
private
antennas
tracking
planes’
location
data
broadcasts.
For
history
buffs
among
us,
the
fundamental
model
behind
DePINs
isn’t
new;
only
the
term,
coined
by
Messari
in
late
2022,
is
actually
relatively
recent.

Early
on,
the
name
got
its

fair
share
of
smirks
—
nothing
wrong
with
that,
memes
are
the
way
of
Web3
—
but
its
introduction
set
off
a
powerful
movement
imbued
with
a
promise
of
change.
And
this
change,
interestingly
enough,
goes
both
ways,
not
only
aiming
at
how
we
manage
and
earn
from
devices,
but
also
making
us,
the
Web3
natives,
reconsider
the
way
we
think
about
Web3.

Bringing
crypto
into
the
real
world
is
an
exciting
idea,
if
not
a
one-of-a-kind
opportunity.
It’s
what
the
masses
have
been
waiting
for:
real,
tangible
use-cases
for
blockchain
that
people
actually
need
and
use
daily.
The
flipside
is
that
this
one-of-a-kind
opportunity
takes
a
bit
more
effort
from
launching
another
dog-themed
memecoin,
and
has
a
lot
of
its
own
specifics
too.

So
what
makes
DePINs
special?
To
answer
this
question,
let’s
imagine
a
hypothetical
DePIN
that
enables
you
to
earn
tokens
for
measuring
local
temperature
through
a
smart
thermometer.
That’s
already
where
we
bump
right
into
one
of
the
many,
many
elephants
in
the
room:
the
hardware.

How
do
we
go
about
the
thermometers?
Do
we
let
users
connect
any
third-party
devices
capable
of
recording
and
sending
data?
Sure,
and
let’s
applaud
our
own
open-source
spirit
while
we’re
at
it.
But
let’s
not
forget
to
write
the
code
that
will
support
the
widest
variety
of
smart
sensors
and
will
feature
a
simple
user
interface
that
will
make
adding
them
a
breeze.
And
that’s
no
easy
task,
mind
you.

The
alternative
is
to
manufacture
the
hardware
ourselves,
which
lands
us
in
yet
another
animal
reservation.
Now,
we’re
no
longer
simply
building
a
dApp,
we’re
also
building
a
custom
piece
of
hardware
and
taking
on
the
joys
of
manufacturing,
storage,
and
shipment.
Of
course,
we
can
always
buy
a
white-label
solution,
hire
contractors,
and
do
a
ton
of
other
reasonable
things,
which
all
lead
us
to
our
next
trunked
beast:
the
token
economics.

You
see,
the
price
of
all
of
that
has
to
be
accounted
for
in
the
token
economics.
Whether
we
expect
the
community
to
purchase
a
thermometer
from
us
or
not,
we
have
to
be
mindful
of
this
investment
when
we
lay
out
the
rewards
and
incentives.
People
will
expect
a
return
on
their
investment
in
hardware,
after
all,
and
quite
reasonably.
And
with
that,
we
are
no
longer
writing
token
economics
for
people,
as
regular
dApps
do,
we
are
writing
them
for
people
and
value-generating
machines
—
machines
that
are
growing
more
intelligent
by
the
day
and
turning
from
mere
tools
into
economic
agents.

See
how
significant
this
distinction
is?
And
that’s
only
the
supply
side
so
far.

Now,
let’s
consider
the
other
part
of
the
equation.
A
crypto
token
can
live
off
the
hype,
memes,
and
sheer
unhinged
speculation
we
know
Web3
for.
A
DePIN
can’t.
In
our
case,
it
needs
weather
companies,
researchers,
and
anyone
else
willing
to
buy
the
temperature
data
we
collect.
In
other
cases,
it’s
devices
using
its
IoT
connectivity
network,
or
drivers
looking
for
charging
spots;
the
gist
is,
DePINs
need
real-world
demand
for
their
real-world
service.
They
must
push
beyond
the
Web3
echochamber
and,
often
enough,
even
compete
with
Web2
rivals.

The
good
news
is,
they
are

up
to
the
challenge.
When
they’re
armed
with
a
solid
idea
and
execution,
DePINs
have
several
unfair
advantages
over
their
Web2
incumbents.
For
example
they
can
bootstrap
their
way
to
scale
–
fast
–
and
they
can
undercut
virtually
any
centralized
competitor.
You
read
that
right;
Uber,
the
undercutter
of
all
undercutters,
may
have
met
its
match.
The
bad
news
is,
crypto
isn’t
as
used
to
this
business
model
as
it
thinks.
Thus,
solid
enterprise
ties
are
a
must
for
any
aspiring
DePIN
ecosystem,
as
they
help
with
securing
this
demand,
and
with
various
other
headaches,
such
as
hardware
manufacturing.

Let’s
not
forget
about
having
to
win
the
hearts
and
minds,
too.
DePINs
have
to
approach
entirely
new
audiences,
people
who
are
an
afterthought
for
most
crypto
projects.
Think
IoT
and
tech
geeks,
but
also
anyone
who
could
host
and
run
hardware,
from
drivers
(they

really
love
their
world-mapping
DePINs)
to
small
businesses.
It’s
no
easy
task,
marketing-wise,
and
one
that
further
distinguishes
DePINs
as
a
unique
Web3
sector.

None
of
this
is
fatal,
obviously,
as
the
sector
powers
on,
but
all
of
this
makes
for
a
gauntlet
that
calls
for
a
new
mindset,
architecture
and
language.

Mindset:
more
attentive
of
real-world
challenges
that
DePINs
can
tackle
and
savvier
in
accounting
for
the
hurdles
in
the
path,
including
things
like
actual
product
marketing
and
user
experience
to
compete
with
Web2
rivals.

Architecture:
merging
smart
contracts
with
edge
computing
and
peer-to-peer
device
interactions,
mindful
of
the
real-world
challenges
involved.

Language:
more
accessible
to
the
non-Web3,
those
who
didn’t
spend
their
last
few
years
chasing
the
crypto
bags,
language
of
business
cases
and
efficient
solutions.

The
beauty
of
DePIN
is
that
it
gives
us
all
a
chance
to
judge
crypto
based
on
its
real-world
usefulness.
By
tapping
into
real
demand
and
supply,
DePINs
give
us
all
clearer
metrics
to
go
by..
How
many
devices
are
on
a
DePIN?
How
many
people
use
the
DePIN’s
services?
Is
its
pricing
and
services
better
than
those
of
Web2
rivals?
It’s
not
about
speculation
anymore,
but
about
making
a
positive
impact
on
the
world.
This
is
what
truly
singles
DePINs
out
across
the
entire
Web3
space
as
a
unique
and
self-standing
sector.
Their
supporting
layer-1
backbones
should
be
as
wary
of
this
as
the
wider
Web3
community
if
we
want
this
space
to
finally
bring
in
real-world
blockchain
adoption
—
this
time,
for
real.

Note:
The
views
expressed
in
this
column
are
those
of
the
author
and
do
not
necessarily
reflect
those
of
CoinDesk,
Inc.
or
its
owners
and
affiliates.