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This Is How DePIN Can Solve AI’s Global Energy Crisis

Published

1 week ago

September 12, 2024

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The rise of artificial intelligence (AI) and generative AI technologies has been meteoric in the past two years. For some tech-savvy people, every morning begins with the help of AI, from the smart alarm that tracks their sleep cycle to the news app that curates articles based on their interests.

But behind these seamless conveniences lies a hidden reality – these technologies are part of a growing energy crisis. As AI technologies like generative AI advance, they are not just transforming our lives; they’re demanding a huge share of the world’s electricity.

Impact of AI on Energy Infrastructures

The challenge is stark. As one of the most energy-intensive modern IT endeavors, AI systems require considerable carbon emissions and electricity. Indeed, the world might not be ready for their demands.

In 2023, the world became acquainted with the implications of generative AI, and by 2024, its utilization in various sectors magnified. Hence, data centers that power these AI models are becoming massive consumers of electricity.

Indeed, Forbes noted that GPT-4 required over 50 gigawatt-hours to train—equivalent to 0.02% of California’s annual electricity production. Moreover, it requires 50 times more energy than its predecessor, GPT-3.

The statistics are staggering. Globally, data centers and their transmission networks now contribute to 3% of global energy consumption, emitting as much carbon dioxide as Brazil.

Moreover, the escalating energy requirements show no signs of abating. According to an International Energy Agency (IEA) projection, global electricity demand will surge from 460 terawatt-hours (TWh) in 2022 to 1000 TWh by 2026.

Global Electricity Demand Projections. Source: IEA

In the United States alone, the power demand from data centers is expected to increase from 200 TWh in 2022 to 260 TWh by 2026, marking a 6% share of the country’s total power usage. Projections suggest this demand will double by 2030.

Amid this backdrop, Ayush Ranjan, CEO of Huddle01, highlighted in an interview with BeInCrypto the urgent need for solutions like DePIN (Decentralized Physical Infrastructure Network).

“AI data centers require a substantial amount of electricity for computation and cooling. If AI applications continue to grow at the current rate, we will see a significant strain on both local and global energy grids that will prove unsustainable. This burden will continue to increase as AI systems get more and more complex with time. This will again lead to higher emissions and grid instability,” Ranjan explained.

The geographic clustering of data centers compounds the challenges. For instance, Northern Virginia hosts the largest hub of data centers globally, consuming electricity equivalent to that of 800,000 homes. This concentration creates dangerous fluctuations in power demand, posing severe risks to energy infrastructures.

How DePIN Solves the Challenges

In response, DePIN offers a promising solution by leveraging underutilized hardware resources to distribute computational tasks more efficiently. By decentralizing energy consumption and incentivizing the use of edge computing, DePIN networks could significantly alleviate the energy burden imposed by AI, offering a pathway to more sustainable and democratized access to AI resources.

Ranjan further elucidated that DePINs distribute energy consumption and workload, easing the burden on any single point. Instead of relying on huge centralized data centers, DePIN deploys multiple nodes—often utilizing underused infrastructure to offload computations closer to end-users.

“This reduces the workload on servers and spreads energy consumption more evenly across regions, easing the burden on energy grids,” Ranjan told BeInCrypto.

Currently, 84% of the data centers are concentrated around the United States, Europe, and China, making data transfers less energy efficient. However, edge computing, integral to DePIN, minimizes long-distance, energy-intensive data transfers typical of centralized data centers.

“Splitting the energy consumption across multiple devices and regions, reducing the load on data centers and energy grids by leveraging existing devices or resources to build the network will prove critical in solving this issue,” Ranjan affirmed.

Data Centers Distribution. Source: Synergy Research Group

DePin Projects Addressing AI’s Demands

According to Ranjan, several DePIN projects, like Filecoin Green, Akash Network, Render, and Grass, focus on addressing AI’s energy demands.

Notably, the Daylight Energy project, backed by prominent venture capitalist firm Andreessen Horowitz (a16z), aims to transform energy grid operations through distributed energy resources (DERs). This initiative enhances grid responsiveness and facilitates sustainable energy practices by leveraging real-time data from DERs such as solar panels and smart batteries.

Moreover, on September 10, Daylight Energy announced a partnership with DIMO Network to enable electric vehicles (EVs) to support power grids. This collaboration utilizes DIMO’s EV application programming interfaces (APIs) to integrate EVs into the energy management ecosystem, thereby facilitating clean energy usage and real-time energy management for all EV owners.

DePIN networks also solve other challenges of centralized infrastructure, such as frequent outages. For instance, a recent IT outage involving Microsoft and CrowdStrike disrupted major services worldwide. However, DePIN networks are less susceptible to such outages because they do not have a single point of failure.

Currently, the total market capitalization of DePIN projects stands above $20.5 billion. Additionally, the total number of DePIN devices has crossed 18 million. However, DePIN still faces scalability challenges as the mainstream adoption of these networks requires high computational power.

“Many DePINs rely on a mix of devices, from low-powered edge devices to small-scale data centers. Scaling the network and coordinating the deployed resources to match the computational power of a centralized data center remains a formidable industry challenge,” Ranjan noted.

DePIN Market Cap, Volume, and Total Devices. Source: DePINscan

However, while the idea of DePIN rescuing the world from a global energy crisis remains nascent, further innovation and adoption are essential. Ranjan believes that token incentives can help bring more adoption.

“Because of hardware limitations of edge devices to handle AI workload, wide adoption is crucial for any DePIN to scale and see a mainstream use case. Token incentives help drive intent to use and participate,” Ranjan concluded.

Disclaimer

Following the Trust Project guidelines, this feature article presents opinions and perspectives from industry experts or individuals. BeInCrypto is dedicated to transparent reporting, but the views expressed in this article do not necessarily reflect those of BeInCrypto or its staff. Readers should verify information independently and consult with a professional before making decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Market

TradFi To Become Biggest DeFi Customer

Published

42 mins ago

September 19, 2024

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Chainlink co-founder Sergey Nazarov predicts that tokenized real-world assets (RWAs) will soon be more valuable than cryptocurrencies. He points to the increasing involvement of traditional finance in decentralized finance, driven by a growing interest in tokenization.

Nazarov also noted that Chainlink is ready to take advantage of this shift in the blockchain space.

TradFi Interest in Tokenized RWAs To Alter Blockchain

Nazarov anticipates an interconnected world where decentralized finance (DeFi) and TradFi actively transact with each other. Acknowledging the growing interest in tokenized RWAs, he says TradFi would be DeFi’s largest customer.

Speaking at Token2049 in Singapore, Nazarov highlighted DeFi’s ability to generate yield and create reliable markets for RWAs. He urged the industry to prepare for this shift, noting that it’s already happening, driven by asset tokenization. According to Nazarov, blockchain technology is giving TradFi exactly what it needs.

Chainlink co-founder also highlighted how decentralized infrastructures like Chainlink and smart contracts are transforming the digital space by removing the need for traditional counterparty relationships. Instead of relying on human decision-making, automated code ensures outcomes, improving efficiency and reducing risks that traditional finance models often face.

Chainlink co-founder on TradFi, DeFi, and tokenized RWA during Token2049 in Singapore

Nazarov emphasized that this represents a major shift from the current TradFi model, where delays and risks stem from human intervention.

His remarks align with his statements from late August, when he predicted that tokenized real-world assets (RWAs) would surpass crypto in value by 2027, driven by institutional interest and TradFi integration. Currently, the RWA market is growing, with RWA.xyz data showing it is already a $2.22 billion industry.

Tokenized RWA — Tokenized Securities Industry Valuation. Source: RWA.xyz

This development comes as blockchain technology continues to tackle the infrastructure challenges faced by traditional finance, while also opening up new investment opportunities. Blockchain’s ability to streamline workflows and significantly improve settlement times is especially appealing — echoing what Sergey Nazarov explained about the efficiency and certainty that decentralized systems offer.

“TradFi needs all kinds of different data that allow those traditional finance smart contracts to function properly…the Net Asset Value (NAV) data of tokenized funds is an example of a dashboard live on production showing the proof of Reserves of one of the many ETF funds use to prove things about them,” Nazarov said.

Notwithstanding, the road to a complete transition to digital infrastructure is marred with challenges. Among them are legal considerations, identity standards, and data privacy, which would demand careful evaluation with regulatory systems in mind.

Accordingly, TradFi and DeFi players and the broader financial services industry must work to build infrastructures capable of supporting broader tokenization adoption while ensuring security and compliance before Nazarov’s dream can become a reality.

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Market

Vitalik Buterin’s Speech, and More

Published

2 hours ago

September 19, 2024

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The Token2049 conference in Singapore has once again proven to be a key event for the crypto industry, showcasing major advancements and collaborations.

The event covered everything from Ethereum’s growth to new partnerships in sports and AI, highlighting how the industry continues to evolve.

Vitalik Sings Ethereum’s Progress: Fees, Speed, Future

Ethereum creator Vitalik Buterin surprised Token2049 attendees by delivering his speech in the form of a concert. Despite the unusual presentation, he shared key updates on Ethereum’s progress.

Buterin highlighted how Layer-2 networks have reduced transaction fees and improved transaction confirmation times to just 5 to 15 seconds.

He also stressed the importance of balancing mainstream adoption with Ethereum’s core values of decentralization and open-source development. Buterin briefly mentioned the ongoing competition with Bitcoin, which currently dominates 58% of the market.

On the second day of Token2049, global crypto exchange Bitget announced a partnership with LaLiga. The collaboration, timed with Bitget’s sixth anniversary, will focus on leveraging blockchain technology alongside LaLiga’s ventures into AI, virtual reality, and the metaverse.

Bitget CEO Gracy Chen highlighted the alliance’s potential to connect with millions of football fans in emerging markets. This follows Bitget’s 2022 partnership with Lionel Messi, reflecting the growing overlap between crypto and sports.

Solana Mobile Unveils ‘Seeker’: Next-Gen Web3 Smartphone

Solana Mobile, a subsidiary of Solana Labs, has unveiled its second-generation Web3 smartphone, called “Seeker”. Previously referred to as “Chapter Two,” Seeker has already secured over 140,000 presale units across 57 countries, according to Emmett Hollyer, Solana Mobile’s general manager. The device is set for release in 2025 and aims to further Web3 mobile development within the Solana ecosystem.

Seeker’s key features include a seed vault wallet, Solana dApp Store 2.0, a Seeker Genesis token, and enhanced hardware. The Early Founder price is $450 until September 21, 2024.

This launch comes after the Saga phone faced initial struggles with sales, but later sold out following a surge in the value of the BONK meme coin.

Chainlink’s Sergey Nazarov Predicts RWA Surge

Chainlink co-founder Sergey Nazarov once again predicted that tokenized real-world assets (RWA) will soon surpass cryptocurrencies in value on Web3. During his keynote at Token2049, he stated that TradFi will become decentralized finance’s (DeFi) largest customer, reshaping the blockchain industry.

Nazarov highlighted Chainlink’s Cross-Chain Interoperability Protocol (CCIP) as crucial in connecting various financial systems. He noted that Chainlink’s oracle network has already enabled $15.49 trillion in transaction value since 2022.

To integrate with blockchain, TradFi needs access to diverse data types and cross-chain connectivity. CCIP offers programmable token transfers, allowing value and data to be included in single transactions.

CertiK, the prominent blockchain security firm, announced a major upgrade to its Web3 services. The company introduced two free community security tools: Token Scan and Wallet Scan, aimed at increasing user asset protection.

Token Scan offers instant security checks for tokens, helping users detect potential scams on networks like Solana. Wallet Scan allows users to assess their wallets for risks such as approval vulnerabilities, and interactions with phishing addresses.

These tools were developed based on CertiK’s extensive experience, including over 70 white hat operations, reporting of 4,000+ security incidents, identification of 115,000 code vulnerabilities, and protection of approximately $360 billion in assets.

Hollywood Veteran Critiques Celebrity Meme Coins

Andrew Saunders, a former Hollywood executive and now Skale’s chief marketing officer, voiced criticism of celebrity-backed meme coins at Token2049. Despite his background in entertainment, Saunders warned against these tokens due to concentrated supply and high risk, likening them to a player-versus-player game where early entry is key to making a profit.

Looking ahead, Saunders predicted a shift in the landscape as crypto regulations become clearer and public understanding improves. He envisioned a future where celebrities use blockchain to connect with fans in a more meaningful way, accessing unique data through an “arm in” model.

As a better alternative to meme coins, Saunders suggested that celebrities develop decentralized applications (DApps) where fans could earn points through social interactions. These points could then be redeemed for exclusive experiences or merchandise.

Solidus Ai Tech and SambaNova Partner for Web 3.0 AI

Solidus Ai Tech has partnered with SambaNova Systems to advance AI in Web 3.0 by integrating SambaNova’s RDU stacks into Solidus Ai Tech’s AI marketplace and European HPC Data Centre. This collaboration promises unprecedented speeds in AI inferencing and fine-tuning.

Set to launch in September, the AI Marketplace will feature advanced AI models powered by SambaNova’s SN40L chip, making high-performance AI accessible across various industries. Paul Farhi, CEO of Solidus Ai Tech, described it as a major leap for AI, while Su Le from SambaNova emphasized the potential for decentralized intelligence in Web 3.0.

Venture Trio Launches Fund for Aptos Ecosystem Growth

MEXC Ventures, Foresight Ventures, and Mirana Ventures have joined forces to establish a new fund aimed at boosting the Aptos ecosystem. This collaborative initiative will focus on supporting promising projects built on the Aptos platform, with a particular emphasis on developing crucial Web3 use cases.

The fund will prioritize projects that leverage Aptos infrastructure, including technologies like Block-STM, and those that facilitate seamless interoperability with key EVM ecosystems. This strategic investment demonstrates strong confidence in Aptos’ technological advancements and future potential.

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Market

How Fed Rate Cut Could Help LINK

Published

3 hours ago

September 19, 2024

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Chainlink’s (LINK) price has risen above $11 following the recent Fed rate cut. This increase has ignited fresh speculation about the coin’s short-term outlook.

In this analysis, BeInCrypto examines the factors contributing to the hike, the potential implications of the rate cut, and what traders can expect from LINK.

Chainlink Key Drivers Want More

According to Santiment, alongside the recent rate cut, Chainlink’s 90-day Mean Coin Age (MCA) has risen. The MCA reflects the average age of tokens in circulation, with a low MCA suggesting that previously inactive tokens are being moved from cold wallets, potentially leading to a sell-off and putting downward pressure on the price.

Conversely, a rising MCA indicates that investors are holding onto their tokens and engaging less in trading activity, often signaling a long-term hold strategy. In Chainlink’s case, the spike in the MCA suggests that many investors are choosing to keep their LINK tokens dormant or moving them into self-custody, reducing selling pressure.

Chainlink 90-Day Mean Coin Age. Source: Santiment

Beyond the rising coin age, the 4-hour LINK/USD chart reveals a surge in the Cumulative Volume Delta (CVD), a key indicator of market sentiment. Each bar on the CVD shows whether the market is dominated by buying or selling activity. Red bars signal selling pressure, which could drive the price down.

In LINK’s case, the chart shows five consecutive green bars, indicating sustained buying pressure. This suggests that the market’s demand for LINK is growing, potentially supporting the continuation of its uptrend.

Chainlink Cumulative Volume Delta. Source: TradingView

LINK Price Prediction: Further Gains

The daily chart shows that Chainlink is holding strong at the $10.02 support level, which played a key role in its recent breakout above the $10.83 resistance. Currently, LINK is trading at $11.30, with no significant resistance in sight to halt the uptrend.

Using Fibonacci retracement levels to assess potential price targets, LINK’s next likely move could take it to $11.86, corresponding to the 38.2% Fibonacci level. If it breaks past this point, the next target could be around $12.98, a level that appears within reach given the current momentum.

Chainlink Daily Analysis. Source: TradingView

However, the cryptocurrency could experience a pullback if it fails to surpass $11.86. If that happens, LINK might drop to $9.25.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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