Recently, when we read articles about the cryptocurrency industry, we often see the word DePIN. We have also started to make investments in this sector in VIP. Since last week, I have written two basic buy-in surveys for the IOTX and DIMO projects. So far, the market response has been good.
DIMO has increased by 140%. In this market flooded with inscriptions, the token has achieved more than 1 times the revenue in two days to directly confront the hard inscriptions, which is a rare target.
In fact, DePIN is not a very new sector, and the mechanism of DePIN is actually more similar to Bitcoin mining machines, but they are actually different in nature. Bitcoin mining is to maintain the nodes and data processing of the Bitcoin network, while DePIN can have a legal decentralized physical infrastructure network.
DePIN is a new network that uses token incentives to encourage individuals to share their resources. This resource sharing covers a wide range of areas, including storage space, communication traffic, cloud computing, energy, etc. The emergence of DePIN has transformed the infrastructure originally provided by centralized enterprises into a crowdsourcing form in which users around the world participate.
Early projects in the DePIN field focused on storage and communication technologies, such as the decentralized network Helium (2013), decentralized storage Storj (2014) and Sia (2015). With the development of the Internet, the Internet of Things and artificial intelligence, the focus of DePIN startups has expanded to computing, storage, communication technology, and data collection and sharing.
One of the typical applications of DePIN is the FIL project. Launched in 2020, the project provides cloud storage services similar to Google Cloud and Amazon Web Services. The FIL project connects users who need space to store data with users who have free space on their hard drives, uses filecoin as an incentive mechanism to reward users who provide infrastructure, and makes the entire facility available to users who need to store data.
The advantage of DePIN is that it spreads the costs among the participants in the construction of the entire physical infrastructure network and uses virtual currency as an incentive for the participants, so that the costs of each participant are effectively controlled. At the same time, the contributions of all participants can be aggregated to serve the users of the facility, thereby improving service efficiency.
Is DePIN a blockchain that could be implemented in China?
Here we will quote the copywriting of Lawyer Xiao, with whom we have previously worked together on a virtual currency case.
September 2021 is an important turning point in China's virtual asset sector. With the release of the "Notice on Further Preventing and Dealing with Virtual Currency Trading Speculation Risks" and the "Notice on Regulating Virtual Currency "Mining" Activities", domestic virtual currency-related activities are basically in a state of clearance.
The essence of DePIN is an unavoidable concept similar to mining. The fundamental extension of DePIN and mining is still the behavior of obtaining virtual currency through the reward mechanism it generates.
The so-called virtual currency "mining" activity refers to the process of calculating and producing virtual currency through dedicated "mining machines". Therefore, only the behavior of actually using mining machines to "calculate" and produce virtual currency can be identified as virtual currency "mining" activities.
The extensive use of mining machines will of course lead to "large energy consumption and carbon emissions, low contribution to the national economy, and limited driving effect on industrial development, scientific and technological progress, etc.", "It will have an adverse impact on promoting high-quality economic and social development and energy conservation and emission reduction. This is also one of the main reasons for stopping mining activities.
The mining of FIL is not a mining activity, because the requirements for FileCoin mining machines are not high. What is provided is not a high-power mining machine with strong computing power, but a storage device with sufficient storage space. This type of storage device is essentially not much different from a general computer, and its energy consumption is not as good as that of a general mining machine, so it is not called mining.
The nature of FileCoin is similar to that of DePIN. Specific driving recorders, specific map satellite hardware, hotspot network hardware equipment, etc. are all common things. The only thing is the review of whether some data are illegally provided or obtained. Therefore, the probability of the DePIN project being implemented in China is actually very high.
The above chart shows projects related to different DePIN sectors, but not all projects can show a strong correlation and rising market. #BTC走势
