Plant DePIN Stations for Fun and Profit
Crypto-enabled hardware products tap into decentralized networks that save (or make) money
Welcome to the latest issue of Decent Tuesdays, a new, experimental edition of The Main Street Journal that covers and connects the many aspects of decentralization.
This week’s Finance article, from ImpactAlpha, describes an emerging commercial technology: networked devices that people can install throughout a geographic area to create a decentralized network that sells sensor data or other services to subscribers as it earns or saves money for the devices’ owners.
For decades, decentralized “mesh networks” of physical devices have done things like aggregate environmental data or provide wireless internet service. The new twist is that such devices are now making secure cryptocurrency transactions with neighboring devices and with the network as a whole, backed by crypto accounts that the devices are registered with. From the hardware’s point of view, this is like the invention of money was for humans long ago. Before money, we could talk to each other, and after, we could also pay each other— which enabled new things, good and bad.
These crypto-enhanced mesh networks are called decentralized physical infrastructure networks, or DePIN. As the DePIN devices operate, they make microtransactions with each other following device-specific contracts and shared governance rules. In the usual setup, people pay money for services that the devices provide— wireless service, air quality data, etc. That money is then divided according to some rules and automatically deposited into the accounts associated with the devices. Buy a backyard/rooftop weather station, register it with the network and a crypto account, and watch the money roll in.
The ImpactAlpha article, which promotes an upcoming report from the Kellogg Foundation, begins in Enfield, a low-income, rural community in North Carolina. After a tornado there knocked out everyone’s internet connectivity for two weeks, LaShawn Williamson and her husband started their own ISP by deploying antennas and routers that run the Althea wireless platform. The result: lower prices and better service for everyone, from a locally-owned provider. With Althea, crypto conversions and processing are all under-the-hood; subscribers pay using dollars.
(It helps that Enfield's mayor, Mondale Robinson, prioritizes local resilience. The town is also converting an old house into an energy and weatherization demonstration home, a goal that's scaled back from Robinson's original vision of building a solar farm that would supply all of Enfield's electricity. The solar plan was scrapped after federal and state funding for solar projects was terminated earlier this year.)
The ImpactAlpha article goes on to cite more DePIN examples, including:
Location services: The GEODNET positioning network uses ground-based stations to increase the accuracy of satellite GPS down to centimeter-level precision. Buy a station online, install it in an area that doesn't already have one, and receive passive income from GEODNET subscribers.
Weather data: The WeatherXM weather data network sells networked weather stations. Install one outside, and earn crypto from anyone who buys the weather data, like for emergency response, environmental monitoring, forecasting, insurance, or research.
Insurance for vulnerable small farmers (proposed): The Lemonade Crypto Climate Coalition seeks to provide agricultural insurance for small farmers in low-income regions that insurance companies have historically ignored. The idea is, farmers install DePIN weather stations and periodically report their crop yield data. The data enables hyperlocal modeling of how weather affects crops and accurate calculations of what the farmers' insurance premiums need to be. When a crop fails somewhere, insured farmers in the region automatically receive payouts. Once the system is set up, it works with minimal human overhead for the insurance provider, keeping costs low, and outside investors can add to the insurance pool to increase its capacity and possibly earn a return— as long as simultaneous, widespread climate catastrophe doesn't deplete it all at once.
As the ImpactAlpha article notes, DePIN has great potential for positive impact, and I look forward to the Kellogg Foundation report. But I think we'll also always need to maintain vigilance around such systems. By nature, the programmable contracts that underlie DePIN networks can guide money flow in any way— share it equally, extract all profit centrally, split it based on local usage, split it arbitrarily, or anything else that you can encode. The devil is in the programming details. For example, imagine a positioning sensor located in a war zone, in a system that (unlike GEODNET) meters by nearby usage— ka-ching! Install more, and start wars there, too!
I also wonder where all of Althea’s micropayments go. Althea was crowdfunded on Republic in 2020, and according to its SEC filings, the company is privately owned by its original funders and no longer needs to file any SEC reports. Congratulations and respect to its founders and funders, but with all of those Althea devices’ microtransactions happening, I’d like to know if any sliver accrues back to the company. Maybe not, but if so, that would become an ever-increasing income firehose that we can’t monitor as Althea infrastructure expands.
For public-good physical infrastructure with ongoing revenue, like wireless service, I wish we had a system that worked like the patent system was originally designed to, where innovative, idealistic companies like Althea can develop, build, and make as much money as they want to for some good number of years, and after that, the infrastructure becomes a local public utility. Sorta like how the New York City subway system was built and run by private companies until the city took over ownership in 1940. That worked, right?
Photo Credit: Weather station by Ladd Observatory, CC BY-SA 2.0
NEWS
FOOD
Puerto Ricans Are Devising the Food System of Tomorrow, Grist (September 3)
As told through a mother and small nonprofit in a remote farming town, in the wake of Hurricane Maria’s devastation and the lack of government help in 2017, agriculture co-ops, community kitchens, and other grassroots orgs made Puerto Rico more resilient against Fiona in 2022, and continue to strengthen it against federal and private support cutbacks this year.
ENERGY
Clean Energy Is Getting Its Own National Day of Action, Canary Media (August 25)
Sunday September 21 is Sun Day, with community events, product demonstrations, and media outreach nationwide to publicize the economic and environmental advantages of solar power, and to counter misinformation successfully spread by the fossil fuel industry. As organizer Jamie Henn says, “We’re just getting completely outplayed.”
MAKING
Fights Over Music Venues Show That Resisting Corporate Power Will Have to Go Local, The American Prospect (September 2)
In Portland, ME, a local music alliance opposed Live Nation and Tickemaster's plan to open a 3,300 seat venue for nationally-touring acts, galvanizing resistance that convinced the city council to say no. Local opposition to corporate incursion often works, and datacenters are a new target, but the Justice Department is softening antitrust enforcement at the federal level.
FINANCE
A new model for digital infrastructure: Decentralized and community owned, ImpactAlpha (September 8)
Decentralized physical infrastructure networks (DePIN) can replace centralized providers and enable local ownership and profit-sharing for services like wireless access that rely on distributed, ground-based hardware (discussed above).
GOVERNANCE
The Next Generation of Mutualism, The Mutualist Society Press (September 10)
Manifesto argues that mutualist enterprises need a shared social and economic ecosystem, citing the Opportunity Threads co-op in NC and other historical precedents to define the three core principles of mutualism and the three stages of growing a mutualist enterprise.
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