Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.

Decentralized physical infrastructure networks are not entirely new, but this technology is finally getting its share of the conversation it deserves, at least within the crypto space. However, we must ensure that the functional synergies and tremendous utility DePIN presents are more than fleeting buzzwords like resource optimization, scalability, and incentive alignment. These networks have the power to elevate perceptions of blockchain technology’s value proposition among the mainstream and shape a new economy driven by community-first thinking and engineering.

You might also like: The people’s network: Democratizing digital infrastructure through DePINs | Opinion

With the current valuation of the DePIN market estimated to be $2.2 trillion and projections from Messari forecasting growth to $3.5 trillion by 2028, the potential impact of DePINs is enormous. Despite concerns regarding scalability, complexity, and balancing supply with demand, the momentum behind DePINs continues to grow. With numerous compelling real-world integrations and nearly limitless potential for eliminating intermediaries and empowering users, DePINs must be considered among the most promising technologies with transformative potential on a global scale.

Community control and innovation 

DePINs fundamentally alter the economic landscape by eliminating institutional intermediaries, allowing for more direct, equitable interactions between individuals and their communities. These networks enable users and smaller organizations to set up and run physical infrastructure networks using token rewards. This system encourages participants to help shape the infrastructure and create a more community-focused, sustainable economy. By promoting the development of a more flexible, efficient, and democratic infrastructure system, DePINs distribute the benefits of economic activities more evenly and directly.

This shift not only supports a sustainable system but also fosters innovation by providing communities with more opportunities to unite and innovate in ways that reflect their unique values and interests. As communities come to govern their economic activities, the democratization of economic power can lead to more resilient, empowered, and adaptive systems as decisions are made closer to the source of impact. Whether through industry-wide applications or local community projects, DePINs improve efficiency, reduce costs, and strengthen operations without the need for institutional approval or support.

Data liberation 

One of the most significant advantages of DePINs is their ability to free personal data from institutional control, offering individuals more personal data sovereignty. With the rise of data farming and other concerning practices, DePINs provide a solution by allowing individuals to reclaim ownership of their data. In contrast to the traditional internet model dominated by centralized entities that often compromise privacy and control, DePINs ensure that data is owned and controlled by the individuals to whom it belongs.

This new paradigm emphasizes data sovereignty, transforming users from passive data generators into active participants in the digital economy. This shift is crucial in an era where data is a valuable asset, and controlling this asset can significantly enhance individual autonomy and economic power. By promoting a more flexible and democratic infrastructure system, DePINs decentralize access and control, fostering a privacy-focused digital landscape.

Economic efficiency 

DePINs redefine the economic model of network construction by lowering costs and eliminating unnecessary management expenses. Traditional infrastructure projects involve high costs and inefficiencies due to centralized control and multiple layers of management. DePINs reduce these costs and accelerate development, leading to enhanced resource allocation and more investment in the community and technology. 

By democratizing infrastructure development, DePINs lower barriers to entry and promote broader participation, allowing more individuals and small enterprises to contribute. Additionally, users become the ultimate benefactors of their data’s value by determining how their data is monetized and participating in the economic benefits of infrastructure investment. For example, users can earn rewards through excess computing power, participate in data collection quests, or support the community by buying and installing DePIN-powered WiFi extenders. Companies such as DIMO, a DePIN project that enables users to collect data from driving their cars, allow users to take back data that would otherwise be solely held by manufacturers such as Tesla, Ford, and others for their purposes. Tracked through DIMO’s mobile app or hardware, users can sell their data back to these or other entities, creating value for something as simple as driving to your local supermarket.

You’ve got to give it to DePINs

The potential of DePINs to create a more equitable, inclusive, and privacy-focused digital economy is upon us. Embracing DePINs can unlock new opportunities and empower individuals to participate more actively in shaping their economic future, paving the way for a more resilient and adaptive digital economy. 

As DePINs gain momentum, they represent a significant shift toward community-driven economies, where individuals have greater control over their resources and interactions. The functional benefits of this technology are more than aspirational, and mass adoption is on the horizon.

Read more: DePINs can disrupt tech monopolies and put people back in control | Opinion

Author: Markus Levin

Markus Levin is the co-founder of XYO Network and head of operations at XY Labs. Markus co-founded XYO Network in 2018, establishing it as the first people-powered decentralized project to connect data from the actual physical world directly with blockchain smart contracts and other digital realities. XYO has grown to become one of the world’s largest networks of nodes, achieving record-breaking growth year after year. After dropping out of his PhD studies at Bocconi University, he began working with and leading companies in hyper-growth industries around the globe, including cutting-edge technology ventures such as Novacore, “sterkly”, Hive Media, and Koiyo. Markus mined his first Bitcoin in 2013 and has been captivated by blockchain technologies ever since.