KEYTAKEAWAYS
- DePIN merges blockchain with IoT, allowing physical devices to contribute resources and earn crypto rewards.
- Major DePIN projects address issues in rendering (Render Network), data storage (Filecoin), and blockchain data indexing (The Graph).
- DePIN aims to create a more decentralized, transparent ecosystem where users have greater control over their digital identities and data.
CONTENT
DePIN, the next big trend in crypto. Learn about the 3 top projects like Render Network, Filecoin, and The Graph, and how to get involved.
If you had the chance to invest in any internet company back in the year 2000 that still exists today, it’s clear you’d have made a fortune. Unfortunately, many projects from that era didn’t survive the dot-com bubble. But! What if you had the opportunity to invest in the internet infrastructure itself? In this article, we are going to introduce a concept that many experienced crypto traders believe will be the next major market trend: the decentralized physical infrastructure network, or DePIN.
>>> Read more: 2024 Crypto Market Alert: Dangerous Bubbles in Altcoins, Tap-to-Earn, and AI Stocks
WHAT IS DEPIN?
DePIN might not sound as straightforward as artificial intelligence (AI) or non-fungible tokens (NFTs), but understanding it could reward you significantly. If you spend just ten minutes understanding it now, you’ll thank yourself in ten years.
>>> Read more:
The full name of DePIN is “decentralized physical infrastructure network.” Still confused? It’s actually simpler if you understand the basic principles of blockchain. Blockchain is inherently a decentralized foundational network infrastructure. DePIN essentially adds a “physical” component—it’s tangible, involving real-world devices and collaboration, merging blockchain with the Internet of Things (IoT).
Previously, IoT was understood as real-world devices and machines connected to the internet for remote monitoring and operation. DePIN takes this further, by enabling certain network-capable hardware devices, not only to transmit data to the blockchain but also to contribute computing power, storage space, and bandwidth, turning idle hardware resources into contributors to the system while earning cryptocurrency rewards.
WHY DO WE NEED DEPIN?
Besides Bitcoin serving as digital gold and a store of value, the entire blockchain and digital currency industry is building a more decentralized, fairly distributed, transparent network ecosystem that allows users to fully control their digital identities and personal data—this is why this industry is termed Web 3.0.
>>> Read more: Bitcoin Outshines Gold as Safe-Haven in Inflationary Era
Like decentralized finance (DeFi) aims to address issues of transparency, efficiency, privacy, and single points of failure in traditional finance, DePIN recognizes similar issues in various sectors and leverages blockchain to improve current operational models.
DEPIN PROJECT 1: RENDER NETWORK
(source: Render Network)
For example, if you look up the DePIN sector on CoinGecko, the largest market cap belongs to Render Network, a well-known distributed rendering network.
Rendering, crucial in gaming and film industries for computing 3D graphics, is now also significant for AI. Render Network allows any user to become a network node, offering their idle graphics processing unit (GPU) resources for others in the ecosystem needing rendering or AI processing.
This decentralized network enables effective use of computational power and mitigates risks associated with centralized cloud services. Blockchain transparency ensures the ownership of intellectual property, and by incentivizing with RNDR tokens, idle GPUs can generate income.
DEPIN PROJECT 2: FILECOIN
(source: Filecoin)
Filecoin, famous from the last crypto bull market, represents another aspect of DePIN, addressing issues of centralized data storage. Data typically stored in the cloud is centralized within a few large entities, risking single points of failure or malfeasance, and possibly causing delays if the server is too far from the user or if too many requests are made simultaneously.
Filecoin’s InterPlanetary File System (IPFS) network allows users to store the same file across different nodes worldwide, letting those with idle storage contribute to and earn from the Filecoin ecosystem. This not only frees up idle digital storage to enhance file upload and download speeds but also secures data against loss should the cloud server cease operations.
DEPIN PROJECT 3: THE GRAPH
(source: The Graph)
The Graph is a decentralized indexing protocol for querying blockchain data, addressing a critical need in the blockchain ecosystem. It enables developers to efficiently access and query data from various blockchains without relying on centralized servers. The Graph’s native token, GRT, serves as a work token within the ecosystem.
Indexers, curators, and delegators stake GRT to provide and curate data services, ensuring network security and data integrity. Its unique subgraph system also allows for precise and efficient data indexing, making blockchain data more accessible to developers. The Graph aims to create immutable APIs for decentralized applications (dApps).
HOW TO GET INVOLVED IN DEPIN
Among the many distinctive sectors in crypto, DePIN undoubtedly stands out as one of the most unique. It’s also likely to be the sector that gains widespread recognition in the future. Many people criticize crypto for being intangible, but if they could actually see their home GPUs, hard drives, or routers contributing idle resources to the network, it might just change their perspective.
While it’s not easy to get involved, this entry barrier could also be the foundation for profitability. For retail investors, participating in DePIN projects involves not only purchasing their crypto on exchanges but also visiting their official websites to understand how to engage in each project’s ecosystem.
STILL, BE CAUTIOUS, ABOVE ALL ELSE
It’s important to remind everyone that as a sector becomes more popular, there will be more projects trying to capitalize on the trend without offering genuine value. Keep in mind that DePIN is still at a very, very early stage. While it may develop due to its novelty and capital attention in this bull market, from an investment perspective, all of us must understand that it is a highly risky area that needs time to develop.
FAQS
- What is DePIN?
DePIN stands for Decentralized Physical Infrastructure Network, merging blockchain technology with real-world devices and Internet of Things.
- How does DePIN differ from traditional IoT?
DePIN allows devices to contribute computing power and resources, earning cryptocurrency rewards, not just transmitting data.
- What are some examples of DePIN projects?
Render Network (distributed rendering), Filecoin (decentralized storage), and The Graph (blockchain data indexing) are prominent examples.
- How can I participate in DePIN as a retail investor?
You can buy project tokens on exchanges or contribute resources (e.g., GPU, storage) through official project websites.
>>> Read more:
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