What is a DePIN and why does it matter? Let me explain.
“Decentralized physical infrastructure network”. Say that three times fast, your girlfriend disappears. (I haven’t even tried to tell her)
Before we get even close to DePIN we have to start with what is a blockchain. A fancy spreadsheet. A bunch of computers arguing with each other. The immutable truth of who has what stuff at what time.
Now that we have this bulletproof magic spreadsheet, we started to build.
Started with money. Then NFTs. Then perpetuals and synthetics and lending and stable coins and liquid staking and governance and DAOs and more.
Money, finance and governance. Those bases are covered.
Now it’s time for the deep tech startups. The biotechs, the Boston Dynamics, and the SpaceX startups of the blockchain era. DePIN.
These projects combine software, hardware, IoT sensors, cameras, robotics, multiple P2P networks, etc. It is crazy how hard these products are to build since they are multi-dimensional. A DePIN startup can sometimes have five components and need to do a bunch of things right before they can get a single thing to work.
Using @jackal_protocol as an example. We need the Jackal blockchain modules, the validator p2p network, the storage p2p network, the inter-blockchain communication protocol, the proof of persistence and internal detection of loss algorithms, the outpost contracts, the protocol incentives… all to be in harmony. We build. Then again, then again, then again.
All of these complex pieces of the stack must click. We must iterate on each step until the whole system works end to end.
Until now DePIN startups have fallen out of favour because the simple apps can launch, find product market fit, and be profitable quickly. They are one dimensional. DePIN startups take years to build before even sniffing product market fit but the upside potential is ridiculous.
But the DePIN winners will synthesize insane advantages, build huge moats, have enormous leverage in value, and completely dominate.
Why? The hardest things output the highest value and eat huge amounts of market value because they are incredibly transformative for humanity.
I can’t see your grandma 10x longing her retirement on a perps protocol or purchasing a picture of a monke, but she might want to get a cheap phone plan, have better car insurance, or safeguard her cherished memories by uploading photos on her iPad to Jackal.
The success of today’s vintage of DePIN startups will determine if blockchain technology will sink deeper into the global infrastructure.
Why would a blockchain based DePIN startup eat huge amounts of market value? Too many reasons to count. It is also unique to each application. Most of the advantages check some, if not all of these boxes.
Pricing power, sovereignty, ownership, low platform risk, efficiency, open source, resiliency, global cybersecurity posture, no admin overhead, no central chokepoints of failure.
We also can’t forget the fact that crowdsourced bootstrapping bypasses gigantic barriers of entry established by legacy systems. Everyday people incentivized to improve the public infrastructure around them.
We’re going to get Blockchain technology embedded into deep tech infra of tomorrow and there is nothing they can do to stop us.
Here are my favourites
@jackal_protocol (obviously) @akashnet_ @Hivemapper @SentinelVPN @soar_chain @DIMO_Network @helium @filecoin @wifimapapp @nymproject @AltheaNetwork and I am sure I’m missing a ton.