The Internet of Things Is Still Broken (But DePIN Can Fix it)

After a decade, it’s clear that both businesses are prospering but continue to grapple with significant challenges in their business models. It’s disconcerting to ponder whether, similar to the early days of the internet, we may be forever entangled in flawed business structures once they have been established. Personally, I harbor doubts about our ability to break free from the “our service is free because you are the product” model prevalent in social media, for instance.

As a researcher exploring the potential of blockchain technology in addressing the challenges of the Internet of Things (IoT), I’m optimistic about the possibility of implementing blockchain-enabled Decentralized Physical Infrastructure (DePIn) as a solution. The crux of the issue with IoT lies in its business model: companies require ongoing revenue to support their products, while consumers find it unreasonable to pay for maintaining software on everyday items such as door knobs or refrigerators.

Blockchain technology provides a novel approach, merging open-source innovation with decentralized structures, enabling the creation of self-governing Internet of Things networks that are more sustainable in their operation.

The core issue lies in the discrepancy between the lifespan of sold products and the product lines they belong to for businesses. While consumers frequently replace items like smartphones and computers every few years, home appliances such as lightbulbs, doorknobs, refrigerators, and other devices are typically long-lasting. This presents a challenge when it comes to providing cloud infrastructure for managing these devices, which results in ongoing costs that can last for decades after the initial sale. Adding software maintenance expenses to the equation, it’s no wonder businesses may find themselves consuming their profit margins over an extended period.

Companies disappointingly tend to discontinue online services for previously sold goods, leading to the unfortunate transformation of once-valued devices into useless objects or necessitating unexpected fees for continued usage. In my past experience, I was surprised and annoyed when I received a notice requesting an annual fee of $90 to maintain the functionality of my smart door locks. Despite the financial strain of this cost, which is equivalent to approximately eight years of previous service, my decision to replace the locks was fueled more by anger than by rational consideration.

In recent years, despite encountering some challenging setbacks, the IoT sector has achieved significant advancements. Notably, IoT devices that adhere to the HomeKit standard and incorporate Matter controls and Thread radios are engineered to operate independently of an internet connection. Consequently, their fundamental features don’t rely on cloud infrastructure, thereby distributing maintenance responsibilities among various entities instead of relying on a single enterprise.

If we aim for advanced home automation and seamless connections between devices, it’s essential to have internet access and cloud computing capabilities. In addition, a decentralized cloud infrastructure is necessary for effective implementation of these technologies.

Through the utilization of blockchain technology, devices endowed with surplus processing power and internet access can participate in intricate applications that function at the network level.

If you aim to effectively manage home energy consumption in accordance with the grid’s condition, consider exploring options such as selling excess power or employing AI systems for conversational interfaces. However, these functionalities require substantial computing power and bandwidth. To maintain a sustainable business model and minimize environmental impact, it is essential to implement solutions that can perform these tasks without relying on an excessive number of new data centers.

As an analyst, I’m excited to share that the advancements in smart home technology have surpassed our expectations. It’s not just about cramming a smartphone’s intelligence into a lightbulb; it’s more economically viable. The cost of creating a standard, overly-smart chip is less than producing customized chips for each device. Chipmaking is an industry that thrives on volume production. By using software to give these standard chips the ability to handle various functions like controlling a light or managing a refrigerator, manufacturers save time and resources compared to designing specialized smart chips for every device.

In essence, this setup allows for the utilization of a vast amount of underused connected computing power from various devices like smart homes and cars, contributing to the development of a blockchain-based decentralized cloud computing system. These devices can monetize their unused capacity by selling it to the network, while simultaneously purchasing additional computational resources when required. This self-sustaining infrastructure aims to reduce the dependence on continuous financial investment from initial product sellers. In simpler terms, just as a cloud is someone else’s computer, why not consider your neighbor’s refrigerator or any other idle device as part of this network?

As a seasoned crypto investor looking back on my journey over the past decade, I can’t help but reflect on why I chose blockchain technology over other alternatives for building decentralized computing infrastructure. Allow me to explain from my perspective.

I’ve looked forward to the convergence of cloud computing, blockchain, and the Internet of Things for over a decade. It seems we may be on the verge of making that a reality soon.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.