Deepnet networks can disrupt Big Tech and free the Internet.

Today, control of the Internet is concentrated in the hands of a few companies that enjoy high levels of leverage and regulatory protection. These companies operate the most critical infrastructure of the Internet, from providing services such as telecommunications to providing digital goods such as computing power. Their dominance has reduced competition in their respective industries, leading to higher prices and fewer choices – ultimately hurting consumers.

A new platform called Decentralized Physical Infrastructure (DePIN) is bringing control of the Internet's infrastructure to the people it's supposed to benefit most: users. Built on public blockchains, these networks have the ability to take on the disruptive innovation of some companies – like Airbnb – by empowering citizens to own, monetize and improve the infrastructure around them.

More simply: DePIN allows individuals to offer their own energy or resources – such as their electricity and internet connection – in exchange for micropayments. This allows protocols to create huge infrastructure footprints without footing the bill.

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DePIN makes it easier to start businesses in sectors with traditionally high barriers to entry. Instead of hiring people and buying infrastructure, companies can rely on networks of contributors to build capital-intensive businesses without putting up the money themselves. DePIN turns large up-front fixed costs into manageable long-term variable costs. Web2 companies like Uber have pioneered this concept – taxi companies are capital intensive, but Uber is capital light, so it can scale very quickly without needing as much capital.

Unlike Uber, Deepin companies use tokens to fund the model by owning contributors (drivers in Uber's case) and rewarding them with cash. By mobilizing communities of people connected to the Internet, DePIN introduces an entirely new model for building networks that uses a flexible cost structure to deliver value to customers. Many changes in our world today make this even more important.

Today, there are over 1000 companies using DePIN to solve existing problems. It was the first Filecoin at scale, (FIL) to enable authentication, storage and retrieval for 3rd parties looking to provide cloud services to businesses. FileCoin's disruptive model facilitates the creation of a competitive storage market supported by fees that storage providers (SPs) receive for storing and retrieving data and incentivizing providers in their native currency. By joining the FileCoin network, any business with excess storage capacity can compete with Amazon's centralized scale with greater guarantees around cost, security and accessibility.

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DP networks have also emerged to provide other digital products such as computing power and bandwidth. Akash Network allows people with GPUs to rent resources to developers who need computing power and work with a token similar to FileCoin. However, unlike Filecoin, which focuses on storage, Akash focuses on computing power for AI model training use cases. Another early DP experiment was trying to build a network to compress Helium's bandwidth. By encouraging people to deploy routers and provide Internet access, Helium created the first congested telecommunications network. Each of these three projects offers a variety of digital goods using communities of willing adopters.

DP's business model uniquely disrupts the business model of incumbents who create digital goods. Incumbents have used their market power to force long-term contracts on customers who previously had no choice in the software-as-a-service (SaaS) model. These long-term contracts are necessary to enable the incumbent to recoup large upfront costs. However, these “one size fits all” subscription economics don't always make the most sense for the end customer, with pay-as-you-go solutions (the IAAS model). DP projects are uniquely suited to IAAS models because they can crowdsource supply and don't have to worry about recouping costs up front.

The ability to strategically leverage capacity for developers gives a strong weight to how cloud services have historically operated, with large fixed upfront costs driving fixed capacity. Although DePIN is still in its infancy and none of the three projects mentioned have yet crossed the threshold into mainstream adoption, they have the unique potential to challenge the biggest incumbents in terms of cost. Filecoin already offers storage services at a fraction of the cost of Amazon's cloud services.

Although the congested infrastructure is still in its infancy, DePIN offers a way to address gargantuan overheads without raising competing central finances.

DPin can consume infrastructure the way software consumes most businesses. Cloud services are often a winner-take-all market where the final resource is sold, and so the winners depend on who can command the lowest price for the resource they provide. This goes to cost of production, and the areas where DP wins are where incentivized communities put excess capital/labour around central revenue generation infrastructure to significantly reduce production costs. From education to remote work, the Internet will increasingly shape how we live, learn, and grow. If the FileCoin model is a measure of providing valuable storage coverage, it may represent a capitalist example of how to return the means of production to workers to create greater economic value.

By lowering the cost of digital products, DP can encourage wider use of the Internet and lower barriers to entry, thereby increasing the overall well-being of society.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.