Decentralized Physical Infrastructure networks (DePIN) is a rapidly growing sector with a total addressable market for DePIN is estimated to be over $2.2 trillion today and is projected to reach $3.5 trillion by 2028. One of the leaders in the DePin storage space, Filecoin, is also helping to lead a new field called Regenerative Finance (ReFi).

Here’s an introduction to the new verticals within physical infrastructure, climate change, blockchains, and crypto.

Why DePin is Unique?

DePin taps into existing, non-speculative demand sources, connecting physical infrastructure globally with decentralized participants who use the data without compromising authenticity or integrity since everything is transparent on-chain.

What is included within DePin?

According to Messari “DePIN comprises protocols that aim to disrupt traditional billion-dollar infrastructure industries, which can be broadly categorized into four categories: decentralized server, wireless, sensor, and energy networks.

At a high-level decentralized physical infrastructure networks are divided into four categories:

• Cloud/Storage Network: file storage, databases, CDN (Content Delivery Network), & VPN (Virtual Private Network).

• Wireless Network:  Wifi, Lofi, & technologies like 5G and LoRaWAN (Long Range Wide Area Network).

• Sensor Network: Interconnected devices equipped with sensors to collect real-time data from the physical world, such as from a Tesla car.

• Energy Grid Network: Aggregating distributed energy sources to create more affordable, flexible, and efficient energy grid network.

On a more granular level, the Variant Fund has helped break down the tangible aka “fungible resource” networks within DePin and to break DePin into Infrastructure and Resource networks. Regardless of how you categorize this market, it is growing quickly to support more use cases for partial decentralized information/storage and partial local (via your phone, computer, validator node, GPUs, or server space).

What is the Value Proposition of DePin?

The value of each DePin network is clear: they offer a better solution for powering consumable resources, from data consumption, computing, power grid electric for the community, or even private family chats.

The leading Web3 social media platforms all give the users the right to owner their content and data by default, paying to host the content on FileCoin or Arweave and then streaming the content via LiverPeer or using RNDR compute. In short, the current DePin companies and actively consuming the other DePin companies/DAOs by leveraged in their own products and services. For instance, Livepeer enables live-streaming applications to for Lens Protocol to power Hey.xyz, Tube.xyz, and other dApps built on top of Web3 content.

Innovation within Physical Networks + Crypto Align

Blockchain has been disruptive to finance and traditional entertainment thus far, but truly has had very little real world impact with the average human today. The blockchain and crypto industry’s growth over the last 13 years has brought us to a point where more commerce and communication is happening on-chain transparently and the costs are now lower to use crypto enabled networks compared to Web2 giants like Amazon.

In most countries and cities or towns, physical infrastructure like wireless networks, cloud services, mobility networks and power grids has been dominated by large corporations due to the high capital, regulatory, and logistical requirements associated with large scale projects. As a result, our physical infrastructure networks are now controlled by oligopolies and centralized entities which has lead to worse customer experiences, less competition, and innovation.

Why Will Individuals Come Join DePin?

Collective ownership, lower costs, more features and functions within individuals normal lives are likely the leading factors in the evolution of a growing movement to using DePin and Web3 instead of non-verifiable (private server stored information) data and content.

Here are four summarybenefits of DePin from a DePin provider - iotex.

DePIN has several benefits over traditional physical infrastructure networks:

1. Collective ownership: Through the use of token rewards, contributors are encouraged to deploy and maintain infrastructure. DePIN's bottom-up approach means that the network is collectively owned by its participants, rather than a small group of shareholders.

2. Distributed Infrastructure Cost: A decentralized physical infrastructure network reduces overhead and expenses by leveraging the collective resources of a network's participants.

3. Decentralization: A decentralized network offers a more resilient and secure infrastructure compared to traditional, centralized infrastructure networks. Building a network in a decentralized manner means that the network is less susceptible to corruption, hijacking and hacks, and other negative externalities associated with centralized control.

4. Open Competition and Innovation: DePIN enables new levels of innovation across various sectors. By removing the barriers to entry associated with traditional infrastructure networks, DePIN encourages new entrants to compete in markets that were previously dominated by a few established players.

Smart Devices → Data = Machine to People Economy

DePin is The Next Evolution of iOT

According to Cointelegraph, DePin will become one of this decades most important crypto investments and DePin is the next evolution of iOT.

“DePINs are arguably the next evolution of the Internet of Things (IoT) for the Web3 ecosystem or a decentralized IoT where users, device users and businesses own and monetize. DePINs enable globally distributed individuals to collectively build, maintain and operate people-owned physical infrastructure networks without needing a single, centralized entity.

DePINs incentivize supply-side participants to build the network by leveraging crypto-economic protocols, offering end-users more cost-effective and innovative services than traditional models.

Given that there are already over 40 billion smart devices and machines, and trillions of sensors deployed worldwide, the future of DePIN is bright. And as the demand for decentralized infrastructure continues to grow, more and more individuals and companies will look to DePIN to build their networks.” - CoinTelegraph

Now that you have a solid understanding of DePin at a high level and you can imagine the future, let’s jump into the details of FileCoin and IPFS, the #1 leader in the decentralized storage space coming to take on Google, Amazon, Microsoft, & Meta Cloud services.

What is FileCoin & IPFS?

FileCoin and IPFS are two complementary decentralized storage systems that are complementary to each other. Filecoin is a blockchain-based storage network that incentivizes users to provide storage space for other users' files. IPFS stands for InterPlanetary File System, and it is a peer-to-peer network that allows users to store and share files without the need for a central server.

Here are some of the most important things to know about Filecoin and IPFS:

• Filecoin and IPFS can be used together to create a more decentralized and secure web. For example, websites can use IPFS to store their static content, and Filecoin can be used to store the dynamic content. This would make the web more resilient to censorship and outages.

• IPFS is a content-addressable file system. This means that files are stored and retrieved based on their content, rather than their location. This makes IPFS more efficient and resilient than traditional file systems.

• Filecoin provides a way to incentivize users to store data on the IPFS network. This is done through a cryptocurrency called FIL. Users who provide storage space can earn FIL, while users who need to store data can pay FIL to store their data.

Filecoin has continued to invest in their technical stack as they launched their first programmer runtime virtual machine (FVM) in March 2023, and there is a lot of ecosystem development occurring with integrations and carbon neutral businesses bridging the gap with climate change and our energy crisis.

Regenerative Finance & FileCoin

Filecoin is helping to push regenerative finance (refi) forward which hits the sweet spot of saving the world while rewarding entrepreneurs for building new companies to solve our problems. Filecoin reports the energy consumption of the network in real-time and they’ve invested in growing ReFi on top of IPFS and Filecoin.

What is Regenerative Finance (ReFi)?

Regenerative economics challenges the existing financial structure that has fueled our current climate crisis. Instead of building an economy based on extraction, ReFi shifts the focus to regeneration of the Earth and the goods and services it supplies. ReFi creates a paradigm shift from competition to collaboration through actors working to achieve a sustainable and natural system at the intersection of Web3 and climate action.

The benefits of decentralized storage are a natural fit for projects in ReFi. By diversifying where and who data is stored with and by having data replicated and stored with multiple storage providers, decentralized storage systems are in a better (and more cost effective) position to store humanity’s most important information such as climate related data.

Filecoin’s Benefits for ReFi

Filecoin’s decentralized storage network provides the key features of transparency, agency, verifiability, resilience, and persistence when it comes to the datasets used to steward natural systems. One example in the ecosystem is Dcent, which is pioneering the green future of WEB3 storage solutions with the first green certification as a Filecoin Storage Provider. Filecoin Green has also launched to help measure the environmental impacts of Filecoin and drive towards carbon neutral for all of DePin.

Shining Example - Filecoin Green

Filecoin Green is helping to guide the Filecoin’s internal work to decarbonize its own tech stack and in the process support the development of tools and methods for other companies to decarbonize themselves as well. Hear the vision for Filecoin Green’s impact ahead through the words of their Head of ESG Marc Johnson.

We “can pull environmental and sustainability data through the economy much quicker and with much more precision than the standard web2 databases or spreadsheet solutions that currently exist.

Filecoin Green uses IPFS to track energy emissions from data use across the lifetime of the stored data. In the sustainability space, to be able to see when an environmental impact—like a greenhouse gas emission is generated—is essential information,

You can see who is responsible for the generation of that emission and also what things are being done downstream that contribute to, or mitigate, some of those emissions.” - Mark Johnson

Filecoin’s Vision - Enable ReFi for All Industries

Filecoin is focused on building end-to-end systems with real-time data tracking for the environment starting with their own tech stack and with the hopes to share all of the learnings and opportunities for other industries such as communications, technology, and legacy industries such as energy and water usage.

Where can I learn more about Filecoin as an investment?

Now that you’ve learned about DePin, the #1 leader in DePin storage, and their focus regenerative finance to help lead the way in sustainable & profitable growth, you may want to learn more about FILE as an investment in the future of cloud computing.

1. Messari Filecoin Reports & Insights

2. TokenTerminal - Filecoin Reports

3. Coinbase’s Tokenomics Report

Thanks for your time. We hope you’ve enjoyed this blog and what you’ve learned. Onwards and upwards for DePin and ReFi powered by Filecoin.