Decentralized Physical Infrastructure Network Development Is Nascent, But Considerable Progress Has Been Made: Report

While Decentralized Physical Infrastructure Network (DePIN) development is still nascent, there has “been considerable progress over the past five years with startups seeking to disrupt traditional, multibillion-dollar infrastructure industries such as server (cloud), wireless telecom, sensor networks, and energy and transportation,” according to an update from Pitchbook.

Pitchbook analysts explain that the current landscape consists primarily of four segments:

  • Decentralized cloud
  • Decentralized wireless (DeWi)
  • Internet of Things (IoT) networks
  • Distributed grid and environment

According to the report, the diverse universe of startups includes those “building cloud and data storage, relational databases, content delivery networks (CDNs) and virtual private networks (VPNs), wireless networks like 5G and LoRaWAN, electric vehicle charging, solar grids, weather stations, mapping (like Google Street View), and more.”

The extensive report from Pitchbook also mentioned that “with the recent passing of the $1 trillion infrastructure bill in the US, there has been a heightened awareness of the need to upgrade physical infrastructure.”

The bill, which also “allocates more than $42 billion to enhance high-speed internet access across all US states and territories, reflects the government’s push to bridge the digital divide and increase connectivity nationwide.”

According to Pitchbook, this particular trend could significantly “benefit the DePINs, which are decentralized networks that fractionalize traditionally capital-intensive hardware infrastructure, enabling anyone to become an infrastructure provider and solve traditionally illiquid markets through tokenization and a peer-to-peer marketplace.”

Pitchbook analysts added that they now “expect the DePIN landscape to significantly expand over the next decade to encompass other critical physical infrastructures such as tollways and parking, pollution monitoring systems, and supply chain logistics.”

As explained in the report, DePINs are systems “that leverage blockchain and IoT technologies to coordinate the building of real-world physical infrastructure.”

Also known as “proof of physical work,” these networks use token-based incentive systems and decentralized protocols to enable globally distributed communities in order “to install, maintain, and operate physical infrastructure networks.”

Like most of Web3, DePINs are decentralized and thus “are not owned by a single entity but rather by a community of globally distributed participants.”

The report from Pitchbook further noted that DePINs are also “typically permissionless— meaning anybody can participate without the need for prior approval—and
trustless—meaning participants do not need to know or trust each other or rely on a
third party to maintain that trust.”

The report from Pitchbook researchers added that decentralized wireless networks “are blockchain-based, next-generation communication systems that are peer-to-peer.”

The report further explained that these services are designed “to provide internet connectivity, data transfer, and other wireless services without relying on traditional centralized providers such as internet service providers or telecommunications companies.”

Participants allocate resources “such as broadband and wireless capacity to the network and are rewarded with tokens for their contributions.”

The report pointed out that there are currently “close to 20 DeWi networks on the market that leverage a range of wireless spectrums and technologies, including wifi, cellular, LoRa, Bluetooth, and satellite.”

As stated in the update from Pitchbooj, these networks have “shown a promising way to construct, operate, and maintain communication networks by distributing costs among supply-side participants, making the process to build a communications infrastructure significantly more cost-effective than traditional means.”


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