Spreading the Risk Around

The concept behind decentralized physical infrastructure networks (DePIN) is straightforward: rather than operating a single network system in one place, businesses distribute multiple servers across different areas. This approach mimics the common practice of multinational companies concentrating their computing processes in a single location.

Even big businesses like Facebook have centralized data servers in one or two locations,” Hugentobler noted. Their computation power is localized. If an earthquake strikes, they could face significant disruptions to their business operations. While it’s possible that no disaster will occur for another 50 years, the risk remains ever-present.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue to function. Additionally, DePIN uses blockchain technology and cryptographically secure access to safeguard stored data from unauthorized manipulation.

Moreover, this decentralized model offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, whereas a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are also significantly reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the groundwork for decentralized models by starting with simple computers and even laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler continued. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent in various businesses. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should have it on their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.

Spreading the Risk Around

The concept behind decentralized physical infrastructure networks (DePIN) is straightforward: rather than operating a single network system in one place, businesses distribute multiple servers across different areas. This approach mimics the common practice of multinational companies concentrating their computing processes in a single location.

Even big businesses like Facebook have centralized data servers in one or two locations,” Hugentobler noted. Their computation power is localized. If an earthquake strikes, they could face significant disruptions to their business operations. While it’s possible that no disaster will occur for another 50 years, the risk remains ever-present.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue to function. Additionally, DePIN uses blockchain technology and cryptographically secure access to safeguard stored data from unauthorized manipulation.

Moreover, this decentralized model offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, whereas a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are also significantly reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the groundwork for decentralized models by starting with simple computers and even laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler continued. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent in various businesses. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should have it on their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.

Spreading the Risk Around

The idea behind decentralized physical infrastructure networks (DePIN) involves distributing multiple servers across different areas instead of operating a single network system in one place. This approach mirrors the common practice of multinational companies concentrating their computing processes in a single location.

Even big businesses like Facebook have centralized data servers in just one or two locations,” Hugentobler observed. Their computation power is localized, so if an earthquake strikes, they could face significant disruptions to their operations. While it’s possible that no disaster will occur for another 50 years, the risk remains constant.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue to function smoothly. Additionally, DePIN uses blockchain technology and cryptographically secure access to protect stored data from unauthorized manipulation.

Moreover, this decentralized model offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, but a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are also significantly reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the groundwork for decentralized models by starting with simple computers and even laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler noted. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent in various businesses. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should have it on their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.

Spreading the Risk Around

The idea behind decentralized physical infrastructure networks (DePIN) involves distributing multiple servers across different areas instead of operating a single network system in one place. This approach mirrors the common practice of multinational companies concentrating their computing processes in a single location.

Even big businesses like Facebook have centralized data servers in just one or two locations,” Hugentobler observed. Their computation power is localized, so if an earthquake strikes, they could face significant disruptions to their operations. While it’s possible that no disaster will occur for another 50 years, the risk remains constant.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue to function smoothly. Additionally, DePIN uses blockchain technology and cryptographically secure access to protect stored data from unauthorized manipulation.

Moreover, this decentralized model offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, but a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are also significantly reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the groundwork for decentralized models by starting with simple computers and even laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler noted. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent in various businesses. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should have it on their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.

Spreading the Risk Around

The concept behind decentralized physical infrastructure networks (DePIN) involves distributing multiple servers across different areas rather than operating a single network system in one place. This approach mirrors the common practice of multinational companies concentrating their computing processes in a specific location.

Even big businesses like Facebook have centralized data servers in only one or two locations,” Hugentobler observed. Their computational power is concentrated, so if an earthquake strikes, it could cause significant disruptions to their operations. While the risk of such disasters might seem remote for another 50 years, the possibility remains constant.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue functioning smoothly. Additionally, DePIN uses blockchain technology and cryptographically secure access to protect stored data from unauthorized manipulation.

This decentralized model also offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, but a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the foundation for decentralized models by starting with simple computers and laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler noted. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent across various industries. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should integrate it into their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot project. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.

Spreading the Risk Around

The concept behind decentralized physical infrastructure networks (DePIN) involves distributing multiple servers across different areas instead of operating a single network system in one place. This approach mirrors the common practice of multinational companies concentrating their computing processes in specific locations.

Even big businesses like Facebook have centralized data centers in just one or two places,” Hugentobler observed. Their computational power is localized, so if an earthquake strikes, it could cause significant disruptions to operations. While the risk of such disasters may seem remote for another 50 years, the possibility remains constant.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue functioning smoothly. Additionally, DePIN uses blockchain technology and cryptographically secure access to protect stored data from unauthorized manipulation.

This decentralized model also offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, but a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the groundwork for decentralized models by starting with simple computers and laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler noted. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent across various industries. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should integrate it into their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot project. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.

Spreading the Risk Around

The concept behind decentralized physical infrastructure networks (DePIN) involves distributing multiple servers across different areas instead of operating a single network system in one place. This approach mirrors the common practice of multinational companies concentrating their computing processes in specific locations.

Even big businesses like Facebook have centralized data centers in just one or two places,” Hugentobler observed. Their computational power is localized, so if an earthquake strikes, it could cause significant disruptions to operations. While the risk of such disasters may seem remote for another 50 years, the possibility remains constant.”

DePIN minimizes the risks of service interruptions by spreading computational resources globally. In the event a node or several nodes fail, other network components can continue functioning smoothly. Additionally, DePIN uses blockchain technology and cryptographically secure access to protect stored data from unauthorized manipulation.

This decentralized model also offers lower overhead costs compared to centralized systems. Managing infrastructure often requires significant long-term investments in building out capacity, but a market-driven approach with natural balances of supply and demand keeps the cost manageable. Participants can scale as needed based on demand without incurring excessive expenses.

The operational costs for users are reduced because they do not have to bear the full burden of maintaining infrastructure. Instead, participants contribute resources, reducing overall operating costs effectively.

A Model Arising from Mining

Bitcoin mining laid the groundwork for decentralized models by starting with simple computers and laptops. As difficulty increased every four years, organizations began a somewhat centralized model but offered incentives to participants to contribute additional computing resources. Over time, this evolved into a fully decentralized system.

The matured model prompted innovators to develop specialized mining equipment that has significantly improved efficiency over the years. These systems are more energy-efficient now due to efforts to secure low-cost electricity sources.

Centralized systems require around 100 megawatt-hours per day, sometimes even more, whereas decentralized systems consume less than half of this daily, making them more efficient in many cases. This also reduces operational costs, often averaging $1 million per month for centralized data centers. Decentralized systems typically cost a fraction of that.

Bitcoin miners have set up operations in small towns in Africa where there’s a small waterfall,” Hugentobler noted. They install hydropower infrastructure, providing these towns with access to electricity they didn’t previously have.”

In Texas, bitcoin mining coexists with oil drilling. When the grid needs additional power for oil drillers, miners can contractually shut down and provide this extra load to the grid, enhancing overall network resilience.

Explorations in Other Businesses

Collective ownership models are becoming more prevalent across various industries. Participants provide physical resources and receive incentives such as token rewards or discounts on services provided by the network.

Some AI models, like DeepSeek, have started leveraging decentralized computing to source computation out and reduce overhead costs. This approach mirrors cloud systems but retains a key difference: cloud systems usually rely on centralized infrastructure in large data centers.

Next Steps

Hugentobler advises financial institutions and technology providers to consider decentralized computing networks for tasks such as AI model training, high-volume data processing, and real-time financial computations. As with the transition from central processing units to application-specific integrated circuits in mining, decentralized computing is likely to see greater performance and cost efficiency over time.

Decentralized computing has matured enough that organizations should integrate it into their roadmaps for further study and understanding. Hands-on experimentation will be crucial in tweaking and enhancing these systems, determining which blockchains to use, managing incentives, and addressing other issues involved in launching a pilot project. The process is lengthy but indicative of the significant benefits for computation-heavy organizations.