DePIN or Decentralized Infrastructure – What Is It and How Does It Work?

While most people are busy staring at Bitcoin price charts, a crypto trend has been gaining traction over the last few years that could forever change how we build roads, use the internet, or consume electricity.

This trend is called DePIN (Decentralized Physical Infrastructure Networks).

Although DePIN is often discussed today as the latest technological trend, its roots go back a decade through pioneer projects like Filecoin (2014) and Render (2017), while Helium (2019) was the first to prove that everyday people, motivated by tokens, can build a global wireless network faster than any corporation.

The name DePIN itself was officially coined only in late 2022, when the analytics firm Messari used a public poll to unify previously confusing terms like MachineFi and Proof of Physical Work under one recognizable name.

It emerged as a direct response to the inertia and high costs of centralized monopolies, utilizing the maturity of modern blockchains to finally connect digital incentives with tangible services in the real world.

What is DePIN exactly, and why does it matter?

DePIN is a fusion of blockchain and tangible, physical devices.

Historically, building a mobile network or a mapping system required billions of dollars in initial capital, which created monopolies (such as major telcos or Google) that today control both the prices and your data.

The DePIN model works in reverse: instead of a single company, the community builds the infrastructure.

Here, blockchain serves as an automated reward system that pays out tokens to those who provide resources to the network (such as a signal or disk space).

The difference compared to a few years ago is that the technology is now fast and cheap enough for these incentives to function in real-time, making services up to 10 times more affordable than those offered by tech giants.

What Are The Advantages Of The DePIN model?

It solves the problem of high entry costs for infrastructure development

The traditional model of infrastructure development suffers from what economists call high capital expenditures (CAPEX).

If you want to build a 5G network, you have to buy frequency licenses, rent thousands of rooftops, and pay workers to install and maintain antennas.

Only massive corporations can afford this. They later pass that cost on to you through expensive subscriptions, while controlling who has access and at what price. DePIN does not eliminate this cost but rather disperses it.

Instead of one company paying a billion dollars for equipment, a million people buy a $500 device. This shifts the risk and ownership from the corporation to the individual.

Operational Transparency and Payments

The primary reason this did not exist before blockchain is trust.

How do you convince 100,000 people in different countries to install antennas and be certain they will be paid for their work?

Blockchain serves as an impartial intermediary, with everything handled through smart contracts.

More precisely, payment rules are written into the code. If your antenna is operational and transmitting data, the smart contract automatically sends you tokens.

There is no accounting department, no waiting for invoices, and no fear of being cheated.

Every contribution is visible on the network, making it clear exactly who provides how many resources and whether the service was actually delivered.

Up to 10x Lower Costs

Traditional companies must cover marketing expenses, corporate taxes, the salaries of thousands of managers, and bank loan repayments.

A DePIN project only carries the cost of electricity and equipment that the user has already decided to purchase.

Consequently, data storage networks like Filecoin or Arweave can offer prices drastically lower than Amazon Cloud or Dropbox.

They do not need to profit off you to survive; the network grows as the value of the entire ecosystem increases.

User Control Over Data

In the traditional model, Google Maps knows where you have been because you provided that data for free while using the app.

They then sell that data. In the DePIN model, you are the one selling data to the network.

Traffic data, air quality, or signal coverage become the property of the person who generated them, rather than the corporation that merely "collected" them.

This is a transition from a centralized ownership model to a distributed contribution and decentralized profit model.

Admittedly, the DePIN model has its downsides.

The road to complete infrastructure decentralization carries serious challenges.

The biggest hurdle is the high initial cost, as users buy the hardware themselves and bear the full risk if the project fails.

Furthermore, there is the issue of demand - it is easy to build a network, but much harder to attract actual companies to use it over proven giants.

There are also questions regarding service quality, as it is difficult to rely on the dependability of thousands of amateur devices, as well as legal uncertainty in sectors like telecommunications and energy, which are under strict state regulation. Finally, profitability for an individual often depends on location and electricity prices, meaning DePIN is not equally profitable for everyone.

What Are The Leading DePIN Projects and How to Get Involved

Today, several stable projects demonstrate how this model works in practice:

Helium: Wireless Network

Helium began with a network for IoT devices (such as smart pet collars) and has since expanded into Helium Mobile (5G).

How it works? Instead of telecommunications companies building towers, users install so-called "hotspots" (small routers). These devices use your home internet to broadcast a signal to the surrounding area.

You receive tokens (HNT or MOBILE) for maintaining the network and for the volume of data that passing devices transfer through your node.

The network is currently on Solana, which makes transactions and reward payouts instantaneous and nearly free.

Hivemapper: Real-time Maps

This is a direct competitor to Google Maps, but with fresher data.

How it works? Users install a dashcam in their cars that records the road while they drive. The data is anonymized and sent to the network.

You receive rewards in HONEY tokens based on mileage and footage quality. The less frequently a location you drive through has been mapped, the higher the rewards.

Even if you don't own a car, you can participate as a validator by verifying the accuracy of other users' footage on your computer, receiving small fees in return.

Render: Computing Power

Given the explosion of artificial intelligence, Render has become one of the most sought-after projects because AI models require massive amounts of graphics card power.

How it works? It connects node operators (owners of powerful GPUs) with digital artists and AI researchers.

When your PC is idle, it "rents out" your graphics card's power to render 3D scenes or train AI models, and you receive RENDER tokens.

• Getting started: You need a powerful NVIDIA graphics card (minimum 6GB-8GB VRAM) and a stable internet connection.

Filecoin: Data Storage

Imagine Dropbox or Google Drive, but without a central server.

How it works? You rent out free space on your hard drive. The data sent by clients is encrypted and broken into pieces, so no one (not even you) can see what is stored on the disk.

You are paid in FIL tokens for storing data and for proving that the data remains available (known as Proof-of-Spacetime).

Can anyone get involved in these DePIN projects?

Technically yes, but with a few important notes:

• Location is key: Location-based DePIN projects (like Helium or Hivemapper) depend on where you live. If you live in the middle of a forest, your Helium router will have no one to communicate with.
• Electricity costs: For projects that use a PC (Render, Filecoin), check if your hardware consumes more electricity than it earns in tokens. In countries with very expensive electricity, profitability can be questionable.
• Using services as a way to save: Even if you don't want to "mine," you can participate by simply using these services. Filecoin is often cheaper than Google Drive, and Helium Mobile offers subscriptions that are drastically more affordable than traditional telcos in certain regions.

What is the future of DePIN?

DePIN demonstrates that blockchain can serve as a practical tool for organizing people and resources in the real world.

It marks a transition from an era where we were merely a product whose data others sold, to an era where we own the infrastructure we use and earn from it directly.

However, despite its great potential, this is still a developing field that must address issues of regulation and long-term sustainability.

It remains to be seen in exactly which direction and at what pace this idea of decentralized infrastructure will evolve, and whether it will succeed in fully replacing the systems we have been accustomed to for decades.