Opinion: DePINs Empower Individuals to Disrupt Tech Monopolies and Regain Control
Disclaimer: The author’s opinions expressed in this article are personal and do not reflect the editorial views of crypto.news.
Decentralized physical infrastructure networks (DePINs) have the potential to revolutionize the way we access and utilize real-world services. The possibilities are endless. Imagine if internet hotspots could be set up in remote areas with limited coverage. What if homeowners could be rewarded for returning excess solar energy to the grid? Could consumers share unused storage space on their devices with others? Or entrepreneurs unlock peer-to-peer microloans to develop local projects?
Underpinned by blockchain technology, DePINs make all of this possible at a time when the infrastructure supporting the global economy is undergoing significant changes. According to Statista, approximately 33.8% of the world’s population does not have access to the internet, with people in low-income countries being the most affected. The International Energy Agency estimates that by 2030, 100 million households will rely on rooftop solar panels, and providing economic incentives will be crucial for adoption. Additionally, the rise of artificial intelligence has led to an increased demand for storage and computation, with McKinsey projecting a 10% annual rise in data center demand until the end of the decade. DePINs can establish a cloud storage network that is more cost-effective than traditional players like Google and Amazon.
DePINs pose a competitive challenge to the centralized providers that currently dominate the business landscape. Presently, large corporations and governments control most of the infrastructure we use daily. This concentration of power creates the risk of monopolies, where limited options drive up prices for consumers and businesses. Furthermore, the pursuit of profits often hinders innovation and excludes customers based on their location and income.
There is a need for change. Blockchains form the foundation of these decentralized networks. Individuals and businesses contributing physical infrastructure can be rewarded with crypto tokens through smart contracts. Consumers can use digital assets to access services on demand.
The goal is not just to modernize infrastructure access but to transform how it is managed, accessed, and owned. Unlike centralized providers, DePINs incentivize all participants through the issuance of crypto tokens. Decentralized autonomous organizations (DAOs) play a vital role in establishing the framework for managing these projects. Digital assets can be used to vote on proposals, ranging from network upgrades to resource allocation. Unlike profit-driven corporations, community-driven projects prioritize meeting the needs of underserved areas. Token issuance can also provide the necessary funding to build infrastructure, acquire land, equipment, and technical expertise.
DePINs align with the values of Web3, which advocates for internet users to have control over their data and prevents tech giants from monetizing personal information without offering anything in return. These decentralized networks not only reduce entry barriers and ensure healthy competition but also result in fairer prices for end users. Multiple marketplaces for internet access, data storage, and energy encourage rivals to innovate and differentiate themselves. Additionally, DePINs allow entrepreneurs who understand their community’s needs to start businesses without significant capital requirements. Open access and interoperability are the future.
However, there are challenges to overcome for DePINs to have a lasting global impact. Currently, multibillion-dollar corporations benefit from economies of scale and vast user bases. Decentralized innovations must demonstrate the superiority of their approach. Reaching untapped markets that are not served by dominant players is a crucial first step. Regulatory uncertainty can also deter investors and participants from getting involved. Moreover, privacy concerns must be addressed to protect users accessing internet hotspots through blockchain technology.
Ecosystems have been created to establish DePINs while preserving user privacy, emphasizing data ownership and self-sovereignty. These ecosystems reduce the risks of identity theft and comply with evolving global regulations such as the General Data Protection Regulation (GDPR) in the EU.
Looking at Europe as a use case, the impact of DePINs and the infrastructure they are built on becomes evident. The current internet landscape requires users to create new digital identities for each website or app, resulting in the manual submission of personal information and lengthy terms and conditions. The EU’s proposal for singular digital identities that can be used across multiple services aims to shift the power dynamic and give consumers control over their confidential information.
To support such initiatives, Europe needs fast, affordable, and interoperable infrastructure that enables secure digital signatures, identity checks, and credentials across the trading bloc. Central bank digital currencies also play a role in facilitating instant cross-border transactions. To ensure widespread adoption of decentralized assets by consumers, high-performing and low-cost infrastructure, as well as regulatory compliance, are essential. Privacy-focused wallets that support multiple blockchains, decentralized identities, verifiable credentials, and data storage are crucial. User-friendly mobile applications will also play a significant role in driving DePINs forward.
The future looks promising, and we have only scratched the surface of the benefits decentralization can bring to everyone. However, prioritizing usability and efficiency is crucial to match the unparalleled impact of the Internet.
About the Author:
Chris Were is the CEO of Verida, a decentralized, self-sovereign data network empowering individuals to control their digital identity and personal data. With over 20 years of experience in developing innovative software solutions, Chris has disrupted industries such as finance, media, and healthcare. He is based in Australia.
