What is DePin or Decentralized Physical Infrastructure DePin for dummies.pdf

People new to DePin think of it a complex concept that can change their life. If they understand it better, it will enable them cater to the ever-growing demand in the market.

1. What is DePin or Decentralized Physical
Infrastructure: DePin for dummies
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2. People new to DePin think of it a complex concept that can
change their life. If they understand it better, it will enable
them cater to the ever-growing demand in the market.
It’s just a fancy term, my friend.
If you are like me, who spends all their time in Blockchain
and Web3, we already live, eat, and breathe DePin, we just
don’t know it yet.
On the other hand, I see countless(okay maybe just a couple
hundred) young devs getting scared of yet another new
concept in the world of decentralization.
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3. Just when they started getting the hang of staking, restaking,
DeFi, DeFi 2.0, NFTs, Account abstraction, RWAs, ERC standards,
and so much more, DePin can be the last nail in the coffin that
feeds the devil inside who wants to shift to AI because it’s the new
sheriff in town.
But when you take a closer look, DePin is what all startups are
about, not just in Web3 but in general.
It’s about finding and combining the right set of technologies to
build a solution that introduces efficiency and security to an
existing process. Sounds simple right? So let’s get into DePin.
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4. DePin – What, Why, How?
If you are reading about DePin, I assume you already know about
Blockchain and other key concepts such as DeFi and NFTs.
If not, you will still get the hang of what DePin is after a few paragraphs.
Let’s start by asking a simple question, How does Bitcoin work?
As with everything else in the world of decentralization, understanding
DePin also starts with answering this question, but in a different
manner.
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5. Bitcoin maintains a decentralized ledger of transaction history on
different devices. PERIOD.
We don’t care about all other technical details for now.
But, What are these devices that maintain the transaction history?

Where are they?
Who owns them?
Bitcoin needs these devices because it eradicates the need for a central
authority by carrying out their major task of transaction validation
through a consensus mechanism executed on such devices.
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6. Bitcoin’s consensus mechanism requires machines that solve
mathematical problems to validate transactions.
Now, if Bitcoin only owned all these devices, it would again be a central
authority just maintaining a record in a decentralized server
architecture (What most corporates are doing these days).
Therefore, people set up mining equipment to solve such complex
mathematical problems that in turn validate the authenticity of
transactions happening over the Bitcoin network. For this validation,
the network consumes the energy and the hardware resources.
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7. Why do people do it then if they have to spend?
Yes we want a fair digital economy but no one wants to invest in it.
The network incentivizes the people through a native cryptocurrency,
in this case, bitcoin.
This incentivization is the motivation behind unknown people giving
their physical infrastructure which acts as a means for the network to
achieve its goal, in this case – decentralized transactions.
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8. harmanpuri.com
There are three major steps involved here:
Random people give physical infrastructure in the form of
mining equipment to support transaction validation or the major
objective of the network.
These devices are interconnected through a shared ledger,
making it a decentralized network of physical devices.
People get incentivized in the form of cryptocurrency for sharing
their physical infrastructure to support the network’s objective.

9. Random people give physical infrastructure in the form of mining
equipment to support transaction validation or the major objective of
the network.
People get incentivized in the form of cryptocurrency for sharing their
physical infrastructure to support the network’s objective.
Yes. Exactly.
Blockchain started out as a DePin only, it just took us more than a
decade to realize what to call it.
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10. Let’s talk about why DePin is important
By decentralizing the physical components of technology, we reduce
reliance on centralized entities. This decentralization leads to
increased security, as there’s no single point of failure, and promotes
greater innovation as multiple participants can contribute their
resources and ideas.
In a way, the growing popularity of DePin is our way back to the
original purpose and vision of Blockchain, started by Bitcoin.
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11. Several real-world examples illustrate the potential of DePin.
Helium, for instance, is a decentralized wireless network that allows
individuals to deploy low-power, wide-area network (LoRaWAN)
hotspots. These hotspots provide coverage for Internet of Things (IoT)
devices, and participants are rewarded with cryptocurrency.
Similarly, Filecoin utilizes a decentralized storage network where
users can rent out their excess hard drive space, contributing to a
vast and resilient data storage solution.
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How does it work in real life?

12. Disclaimer – this is not by ChatGPT but an actual encounter. I see many
posts these days covering make-believe experiences that are clearly
ChatGPT-inspired hence the disclaimer.
Back in 2020 when I was working on a few Blockchain POCs at the start of
my Web3 career, I worked on the concept of how Blockchain can be used
to record seismic activities and then the data can be used to predict
earthquakes.
The special thing about this application was, that because Blockchain was
being used on backend, the authenticity of data became unquestionable.
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An unknown encounter with DePin

13. They knew that the IOT devices would send accurate data, which would
remain “accurate” in the Blockchain, and then the data analysis
techniques would use this data to predict earthquake activities.
This could save millions of dollars, if not billions, for large corporations as
they could prepare for natural disasters in advance.
Now, I don’t know if the project took off from POC to MVP (hardly
happens in Web3, IYKYK), but one of the ideas we wanted to implement
in the project was to allow publicly owned IOT devices connected
through a decentralized network. To compensate for the expense and
maintenance of the IOT devices, the contributors will get incentivized
through a native currency of the platform.
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14. Just like Proof of work or proof of stake, we wanted to call it proof of
devices.
This idea came after realizing that to cover a large area for recording
seismic activities, we would need a lot of IOT devices and hence, a lot of
money. Better to make it public.
So without even knowing it, I was already working on DePin 5 years back.
My guess is, you were too.
Any crazy idea you explored on how Blockchain and IOT can be used
together, or even how Blockchain can be used in connected mobile
devices, or how Blockchain can connect energy grids, it was all DePin.
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15. Think of DePin as the alternative way of integrating Blockchain into real-
world use cases. Its like, if the mountain won’t go to Mohammed, then
Mohammed must come to the Mountain. If real usecases are not coming
to Blockchain, Blockchain has to go to real world usecases.
Understanding DePin opens up a world of possibilities in the
decentralized tech space. It empowers individuals to contribute to and
benefit from decentralized networks, driving the evolution of how we
manage and utilize physical infrastructure.
Embrace DePin, and you’ll be at the forefront of a technological
revolution.
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Conclusion