What is DePIN? Characteristics, Prospects, and 8 Related Virtual Currency Stocks

This site is a great place for me (@mifsee(2) has been working on company and stock analysis while learning privately.

This is only a record of my personal analysis and the contents may contain errors or information that differs from the actual situation. Please understand in advance when viewing this site.

Introduction.

Bitcoin's fourth half-life in April 2024 marks a turning point in a new growth cycle for the entire virtual currency market.
Interest in virtual currencies and crypto assets is also growing again, and new trends are forming.

How the virtual currency market will evolve in the future remains to be seen,A new decentralized infrastructure based on blockchain technology, or "Web3," is becoming a reality.
This Web3 differs from the traditional Internet in that it breaks away from centralized control (companies, organizations, states, etc.) and aims to create a more open and transparent form of the Internet.

In researching virtual currency, I found this new world to be very interesting and on the threshold of its growth phase.
So, let's start withDistributed physical infrastructure called "DePIN"We decided to focus on and dig deeper into the

To be honest, the world of virtual currency is very terminological and difficult for beginners, including myself, to understand. I will try to chew over these concepts as much as possible and explain them in an easy-to-understand manner.

What is DePIN?

DePIN (Decentralized Physical Infrastructure Network) is a new concept for managing and operating physical infrastructure (facilities and equipment to support basic social functions) in a decentralized manner.

In brief,A system that utilizes blockchain technology to operate physical hardware throughout the network.

It is pronounced DePIN.

This technology eliminates centralized control (i.e., companies, organizations, or countries as administrators) and increases transparency and trust.

Background of DePIN's Creation

DePIN (Distributed Physical Infrastructure Network) is a relatively new concept that came to prominence in 2023, and the background behind the creation of DePIN is as follows

Evolution of Blockchain Technology

Blockchain is a technology for managing data in a decentralized manner.
This is a mechanism whereby data is not stored on one central server, but distributed throughout the network.

This technology improves data transparency and security.
For example, the virtual currency Bitcoin also uses blockchain technology to manage transaction history.

• Decentralized management:.Data is managed across the network, not on a central server.
• Transparency: TheAll transactions are publicly available on the network and can be viewed by anyone.
• SafetySince data is distributed across multiple locations, even if one location is attacked, the entire system is less likely to be affected.

Early successes

The most famous early DePIN projects were Helium and Filecoin.

• Helium:.A system that provides a distributed wireless network and rewards users for setting up their own hotspots and providing the network.
  For example, by installing a Helium hotspot in their home, they allow other users to use the Internet and receive the virtual currency HNT in return.
• Filecoin:.Provides decentralized data storage services. Users are compensated by renting out their unused storage to other users. Data is distributed across multiple locations, increasing security and fault tolerance.

Role of the virtual currency Solana

Solanais a blockchain platform that enables fast, low-cost transactions.
Solana has played an important role as a foundation for increasing the scalability (data write = transaction processing speed) and efficiency of DePIN projects. This has allowed more projects to adopt the DePIN concept.

• High Speed Trading:.Very fast transaction processing.
• Low costLow transaction fees allow many transactions to be processed inexpensively.

What is the virtual currency Solana (SOL)? Current Price, Future Prospects, and Future Outlook

Among the many virtual currencies, including Bitcoin and Ethereum, Solana (SOL) has been attracting attention in the market for its high-speed transaction processing capability and low cost of operation. This article delves into Solana's unique features, competitive advantages over other virtual currencies, and market size, and looks at its promising future and outlook...

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Incentive Structure

The incentive (reward) structure is critical to the success of DePIN.
Users can participate in the network and be rewarded with virtual currency for providing infrastructure and contributing data.
This incentive motivates users to actively support the network.

• Rewards:.Virtual currency earned by participating in the network.
• Motivation for participation:.Rewards make it easier for users to participate in the network.

DePIN is expected to find applications in energy, telecommunications, data storage, transportation, and many other areas.
For example, a distributed energy system would allow individual households to sell the surplus energy they generate to their neighbors.
Thus, the convergence of physical infrastructure and blockchain technology is expected to create new market opportunities.

What are the advantages of DePIN?

DePIN has many advantages over the traditional centralized infrastructure model. Below are the main advantages.

Enhanced fault tolerance

DePIN does not rely on a single point of failure because it distributes management throughout the network. Due to this,The risk of system-wide outages due to natural disasters, technical failures, cyber attacks, etc. is reduced.
A decentralized infrastructure improves reliability because if one part of the infrastructure goes down, other parts can remain functional.

In other words, because it is not managed by one company or organization, the risk is spread out if a problem arises.

Improved security

The decentralized control framework and tamper-resistant properties of blockchain technology enhance the security of DePINs.It reduces the risk of data tampering and cyber-attacks and provides a highly reliable infrastructure.

Improved efficiency

DePIN reduces costs by eliminating middlemen with transparent and secure transaction management via blockchain.
Smart contracts (execution programs with rules set on the blockchain) can be used to automate processes such as billing and resource allocation to increase operational efficiency.

Community-driven development

DePIN allows community members to actively participate in the development and management of infrastructure. This creates infrastructure based on local needs and priorities, and increases engagement and a sense of ownership through direct user involvement.

Democratization of infrastructure

DePIN converts a portion of an infrastructure asset into a digital certificate called a "token," and individuals can own a portion of that infrastructure by purchasing this token.
In other words, by owning the tokens, you earn a return on your investment.

For example, token holders may be rewarded each time the infrastructure is used. In addition, having a token allows one to participate in voting on the operation of that infrastructure and to be involved in the decision-making process on how it should be operated.

These mechanisms will make the establishment and operation of the infrastructure more democratic and facilitate the active participation of individuals.

Accessibility and affordability

The DePIN network uses a crowdsourcing and peer-to-peer model to reduce initial infrastructure costs.
In other words,By sharing the resources that many people have (e.g., Internet access, storage capacity, etc.), large initial capital investments are not required.

This allows more people to participate and makes it easier to build and expand the infrastructure. The open and permission-free nature allows anyone to join and contribute to the network, making the infrastructure accessible and affordable.

With these advantages, DePIN provides a powerful alternative to the traditional centralized infrastructure model, enabling the creation of a more efficient, secure, and beneficial infrastructure for the community.

What are the disadvantages of DePIN?

While DePIN has many advantages, there are also several disadvantages and challenges.
Below are the main disadvantages of DePIN.

Technical complexity

DePIN involves a great deal of technical complexity. Designing, developing, and maintaining the network requires extensive expertise in blockchain and related technologies, and requires training for contributors around the world to properly connect resources and upgrade them frequently.

Difficulty in hiring

DePIN is a relatively new technology, and many people are not fully aware of these networks or trained to use them efficiently. This has made the adoption of DePIN in a variety of industries difficult.

Security and privacy concerns

DePIN uses blockchain technology and smart contracts, which generally provide a high level of security, but still leaves the risk of cyber attacks and network hacking. It is possible that hackers could modify the code of the smart contract and manipulate the operation of the entire network.

Regulatory Challenges

Because DePIN is a new technology, there is no clear regulatory framework for it. As a result, DePIN operators often face regulatory challenges in building and operating their networks. Regulatory uncertainty is a source of uncertainty for project developers and investors.

Initial investment required

Building the physical infrastructure of the DePIN network requires a substantial initial investment. This may take some time before the network generates sustainable revenues and provides competitive service costs.

Token price fluctuations

Many DePIN projects utilize a token-based incentive structure and are susceptible to price fluctuations in the virtual currency market. Token price fluctuations can affect user incentives and network stability.

DePIN is an innovative technology with many advantages, but by overcoming these challenges, DePIN is expected to be adopted in more areas and benefit more people.

What possibilities open up with the use of DePIN?

Many possibilities are expected to open up in a variety of fields. The following are some examples.

Energy System Transformation

DePIN can create a more sustainable and equitable energy ecosystem by managing energy production and consumption in a decentralized manner.

For example, individual households can sell surplus energy obtained from solar power generation directly to their neighbors and trade energy without having to go through a central power company. This will promote the use of renewable energy and improve energy use efficiency.

Innovations in Data Storage

Unlike centralized cloud storage (e.g., Google Drive, Dropbox, Microsoft OneDrive), DePIN provides a decentralized data storage network. Users are rewarded for offering their unused storage space to other users.

For example, Filecoin uses this model to improve the reliability and security of data storage and access.

Decentralized communications infrastructure

DePIN creates a communications infrastructure that is not dependent on a centralized provider by building the communications network in a decentralized manner.

The Helium network is a prime example, where users provide the network by installing hotspots and receive the virtual currency HNT as compensation.
This will improve Internet connectivity, especially in areas with limited access.

Increased supply chain transparency

DePIN leverages blockchain technology to improve the transparency and efficiency of supply chain management.
Every step of the product, from production to delivery, is recorded on the blockchain, thus preventing counterfeiting, reducing the risk of fraudulent transactions, and increasing consumer confidence.

Transportation Network Optimization

Smart contracts can be used to automate transportation networks such as ride-sharing services (such as Uber and Lyft).

Smart contracts are programs that automatically execute when predetermined conditions are met, eliminating the need for intermediaries and ensuring that all transactions and processes are executed quickly and accurately.

For example, if a passenger sends a rideshare request and the driver accepts it, a smart contract will work to automatically process payment of the fare and pay the driver once the ride is complete.

Community Engagement and Social Impact

DePIN allows community members to directly participate in the development and management of their infrastructure. This increases the opportunity for communities to control their own infrastructure and contribute to sustainable development goals.

Thus, DePIN can offer new possibilities in a variety of areas, including energy, data storage, telecommunications, supply chain, and transportation. This is expected to create a sustainable, equitable, and efficient infrastructure, and as technology evolves in the future, the possibilities offered by DePIN will continue to expand.

Notable virtual currency stocks related to DePIN

Below are some notable project and virtual currency stocks related to DePIN.
Real-time charts are displayed.

Helium (HNT)

• Overview: (in Japanese only)Helium is a project that provides a distributed wireless network. Users install hotspots and receive HNT tokens as a reward for providing the network.
• UsageProvides low-cost, broad coverage of IoT devices.
• FeaturesLow-cost, low-power, community-driven network.

Helium (HNT)/USD real-time stock price chart

Filecoin (FIL)

• Overview: (in Japanese only) Filecoin offers a decentralized cloud storage solution. Users are rewarded for contributing excess storage space to the network.
• UsageSecure and reliable data storage.
• FeaturesSecurity, reliability, and open source projects with market-driven pricing.

Filecoin (FIL)/USD real-time stock price chart

Render (RNDR)

• Overview: (in Japanese only)Render is,Distributed computing network for digital rendering.
  The user provides excess computing power and receives RNDR tokens in return.
  The network is designed to allow artists and creators to scale up their rendering work on demand, using high-performance GPU nodes from around the world.
• UsageIt is used for resource-intensive rendering, such as virtual reality and metaverse games. Also,Training AI models and machine learning also require high-performance computing resources, and the Render Network provides the GPU power needed for these tasks, enabling efficient processing.
• FeaturesCost-effective and particularly suited to small and medium-sized businesses, it can provide high-quality renderings for projects with limited budgets.

Real-time stock price chart for Render (RNDR)/USD

Theta Network (THETA)

• Overview: (in Japanese only)Theta Network is a blockchain-based platform for decentralized video streaming and data delivery. Users provide excess bandwidth and receive THETA tokens in return.
• UsageProvide high-quality video streaming to compensate for the lack of local infrastructure.
• FeaturesProvides cost savings, high-quality streaming, and digital rights management (DRM).

Theta Network (THETA)/USD real-time stock price chart

Ocean Protocol (OCEAN)

• Overview: (in Japanese only)The Ocean Protocol is,A distributed data platform for data exchange and tokenization of AI models.Allows data to be traded and used in AI models in a secure and private manner. Provide tools for data owners to securely share and monetize their data.
• UsageSecure exchange and monetization of data, as well as tokenization of data, make it easy to obtain and use training data for AI models.
• FeaturesFacilitate data distribution and use by providing data privacy protection, token-based access management, and a decentralized data marketplace.

Ocean Protocol (OCEAN)/USD real-time stock price chart

The Graph (GRT)

• Overview: (in Japanese only)The Graph is an indexing protocol that enables efficient querying of blockchain data, allowing the creation and publication of open APIs (subgraphs) for querying data on networks such as Ethereum and IPFS. This allows developers to seamlessly access blockchain data and improve the functionality of their applications.
• UsageIt is widely used throughout the decentralized finance (DeFi) and Web3 ecosystems to efficiently capture blockchain data using subgraphs.
• Features The Graph simplifies data retrieval and increases application functionality through an open API called Subgraph. It also supports Ethereum, IPFS, and POA networks, with plans to support more networks in the future.

Real-time stock price chart of The Graph (GRT)/USD

Akash Network (AKT)

• Overview: (in Japanese only)Akash Network is,A distributed cloud computing platform that provides a marketplace where users can buy and sell computing resources.This will serve as an alternative to traditional cloud services such as Google and Amazon Web Services (AWS).
• UsageProvides distributed cloud computing resources,It is especially suited for users who need GPU resources for AI and machine learning.It is also used as a platform for developers to deploy distributed applications (dApps).
• FeaturesAkash Network provides a distributed GPU marketplace, connecting users who need computing resources with providers. This makes it more cost-effective than traditional cloud services and allows users to monetize excess GPU resources. In addition, the network is secured by Proof of Stake (PoS), and AKT tokens are used for governance, security, incentives, and value exchange.

Akash Network (AKT)/USD real-time stock price chart

AIOZ Network (AIOZ)

• Overview: (in Japanese only)AIOZ Network is an EVM (Ethereum Virtual Machine) compatible decentralized blockchain designed primarily to provide digital media content distribution, AI computation, and data storage AIOZ Network is built on the Cosmos SDK and Tendermint Core as its foundation, which enables high throughput and scalability.
• UsageThe AIOZ Network leverages a distributed content delivery network (dCDN) to provide video streaming, AI computation, and data storage. This allows users to share their computational resources and reap the rewards.
• FeaturesThe AIOZ Network is EVM compatible and supports smart contracts written in Solidity and WebAssembly. It also uses Cosmos' Inter-Blockchain Communication (IBC) protocol to ensure interoperability with other blockchains, allowing for cross-chain data and asset movement. This allows developers to take advantage of the Ethereum and Cosmos ecosystems.

AIOZ Network (AIOZ)/USD real-time stock price chart

Market outlook and future prospects for DePIN

DePIN is a project that utilizes blockchain technology to manage and operate physical infrastructure in a decentralized manner.
This new concept of DePIN is expected to grow rapidly over the next few years.

market outlook

• The market for DePIN is growing rapidly and has already attracted a lot of attention in 2024.Some estimate that the market size will reach $3.5 trillion by 2028, which represents significant growth compared to the traditional infrastructure market.
• There has been great interest with many venture capitalists (VCs) investing in DePIN projects. This has encouraged new projects and expansion of existing projects.

promise

• DePIN is expected to be applied in a variety of areas, including cloud storage, wireless networks, sensor networks, and energy networks, revolutionizing the current centralized model and providing an efficient and cost-effective infrastructure.
• DePIN utilizes a distributed architecture to provide superior scalability and fault tolerance compared to traditional centralized systems. This allows,In particular, it is expected to be increasingly integrated with emerging technologies such as the Internet of Things (IoT) and artificial intelligence (AI).
• The DePIN project is forming a new shared economy model by creating a decentralized energy and data storage system. This will allow individual users to contribute their own resources to generate revenue and promote the growth of the network as a whole.

The DePIN market is growing rapidly and more applications are expected in the coming years. Along with technological innovations, it is expected to shape new economic models and have a significant impact on the existing infrastructure market.

Where can I buy virtual currency related to DePIN?

Many virtual currencies (altcoins) can only be purchased on domestic exchanges, and not only DePINs,

Below are the DePIN-related virtual currencies that can be purchased in Japan.

DePIN-related virtual currencies available in Japan

Other altcoins must be purchased on foreign exchanges.
I don't use many exchanges myself, but I basically use ByBit.

summary

Focusing on DePIN (Decentralized Physical Infrastructure Network), we delved into the details of how it works, its features, future potential, and related virtual currency stocks (altcoins).

Notable projects include Akash Network (AKT) and Ocean Protocol (OCEAN), which provide distributed cloud computing and data exchange solutions, respectively. These projects are also contributing to the development of AI and are expected to drive future technological evolution and market growth.

Personally, I intend to diversify into these virtual currencies as I make AI-related investments and keep an eye on future trends.