DePIN in "CRYPTO THESES 2024"

Previous sections of the report:

Today, we talk about DePIN:

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Physical Resource Networks (PRNs) incentivize participants to deploy location-dependent hardware that provides resources such as energy, geospatial data, or connectivity for specific physical locations. In contrast, Digital Resource Networks (DRNs) create a new, location-independent cloud backend that incentivizes market participants to provide digital resources such as computation, storage, and bandwidth.

Demand for DRNs continues to grow explosively (albeit from a small base), but in terms of potential adoption, we are still only scratching the surface. The cloud storage market is worth $80 billion and grows 25% annually, yet decentralized alternatives serve less than 0.1% of the market, even though they can be 70% cheaper than providers like Amazon S3.

This reflects that despite significant cost and potential advantages of decentralized digital resource networks, there is still a long way to go in terms of market acceptance and widespread adoption. This may partly be due to the strong market position of existing leaders and customer reliance on and trust in current solutions. However, as the technology matures and more success stories emerge, we can expect decentralized digital resource networks to continue growing their market share, especially in use cases that are cost-sensitive and require high scalability. Additionally, with increasing concerns about data privacy and security, decentralized solutions may become more appealing.

Storage Wars

Among the major decentralized storage providers, four are particularly noteworthy:

Filecoin primarily offers cold storage solutions for businesses and developers. Its competitive pricing and ease of use make it an attractive option for Web2 entities seeking cost-effective storage of large amounts of archived data. Currently, it is the storage network with the highest capacity and utilization.
Storj has optimized its hot storage offerings for enterprises, providing Amazon S3-compatible cloud object storage. It offers fast retrieval times and has proven effective for sharing large video files. These features position Storj to focus on the media and entertainment industries.
Sia also targets the hot storage market, primarily catering to developers. Sia attracts users looking for private storage solutions with fast retrieval times.
Arweave is particularly attractive to NFTs, metaverse, and decentralized social projects thanks to its innovative "pay once, store forever" model. Sami's model shows that demand for Arweave could increase 20 times in the next three years. (What might this do to the token price?)

The development and positioning of these decentralized storage providers highlight the diversity and maturity of the decentralized storage market.Each platform has its unique advantages and focuses on specific market segments, ranging from cold storage to hot storage, and targeting large enterprisesto providing solutions tailored for specific industries.As market demand grows and technology advances, these platforms may continue to expand their service offerings and increase their market share.For investors and users, it is crucial to understand the characteristics and potential of these platforms, especially when considering their possible impact on token prices.

Decentralized databases

Historically, decentralized databases have been plagued by severe performance and latency issues, but there are signs that these products will significantly improve in 2024, which is one of the biggest opportunity areas for the DRN (Digital Resource Network) part of DePIN. Applications in DeSoc (Decentralized Social), gaming, dynamic NFTs, and machine learning/AI will all rely heavily on the widespread adoption of decentralized databases.

The core advantage of decentralized databases lies in their provision of a safer and more transparent way of data storage and processing, which is particularly critical for ensuring data integrity and resisting censorship. However, to meet the demands of modern applications, these databases need to overcome challenges related to performance deficiencies and high latency compared to traditional centralized databases.

With technological advancements and the application of new algorithms, decentralized databases are gradually addressing these issues. For example, by adopting more efficient consensus mechanisms, improved data indexing strategies, and optimized network communication technologies, these databases can enhance their processing speed and response time.

In the future, with the improvement of the performance of decentralized databases, we can expect them to play an increasingly important role in various industries and applications, especially in areas with high demand for data security and decentralization characteristics. The development of decentralized databases is not only significant for technological innovation but also provides users with more control and privacy protection, while promoting the growth of the entire digital resource network field.

Decentralized wireless networks

Helium Mobile is a carrier built on the Helium network. This summer, it collaborated with T-Mobile to launch a $20 monthly mobile plan, offering unlimited texts, calls, and data services to new customers without the restrictions of traditional wireless customer contracts. Helium Mobile customers have the opportunity to earn tokens by sharing their location data through a project called "Discovery Mapping."

Helium's positioning and data transmission network can also benefit other DePIN networks such as Hivemapper and Dimo, which require data transmission from their devices, providing additional revenue channels for the monetization of traditional wireless networks. This use of the Helium network not only offers users new opportunities to earn tokens but also brings innovative business models to wireless network services.

The launch of Helium Mobile marks an important advancement in the practical application of decentralized wireless network services. Through collaboration with traditional carriers, Helium not only provides more flexible and economical communication service options but also promotes the concept of decentralized networks to a broader consumer market. Additionally, the Helium network offers a reliable and efficient data transmission solution for services like Hivemapper and Dimo that rely heavily on data transmission, further demonstrating the potential value and application prospects of decentralized networks in modern communications.

With the development and application of decentralized technologies, we can expect that decentralized wireless networks will play an increasingly important role in providing innovative services, optimizing data transmission, and exploring new revenue channels, while offering users more choices and better experiences.

DePIN's artificial intelligence machines

Artificial intelligence solutions in the crypto space will also be hardware-centric.

Decentralized GPU markets like Gensyn address the imbalance between the limited supply and soaring demand for GPUs needed to train AI models, creating a decentralized supercomputer. Bittensor is transforming how AI researchers work by incentivizing the creation and sharing of machine intelligence. The Bittensor network enables individuals to contribute to open-source AI and monetize their work regardless of the scale or niche of their contributions. This is similar to how the internet made niche contributions economically viable and empowered individuals on content platforms like YouTube. Essentially, Bittensor aims to commoditize machine intelligence and become the internet of AI.

Moreover, the convergence of artificial intelligence and cryptocurrency broadens the scope of cryptocurrency design in several ways:

AI agents can autonomously use crypto infrastructure for payments and to access digital resources (storage, compute, bandwidth).
Innovations like "zkML" (zero-knowledge machine learning) allow smart contracts to securely query AI models, extending the inherent capabilities of blockchain.
Tokens provide a way to incentivize individuals to fine-tune models and collect valuable real-world data, intersecting with DePIN.

These developments indicate that as technology advances, the combination of AI and cryptocurrency will enable us to develop and utilize blockchain technology in entirely new ways, offering limitless possibilities for achieving a smarter, more efficient, and more decentralized digital world.