DePIN Could Limit Mass Internet Outages That Disrupt Crypto. Here’s How

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Key takeaways:

Frequent internet outages have led to calls for the cryptocurrency sector to reduce its reliance on centralized infrastructure.
DePIN provides gateways that make exchanges, wallets, and nodes accessible during power outages.
Market makers, validators and custodial teams can read and broadcast transactions through orbital links and hybrid satellite-ground networks.

The recent Cloudflare outage, which shut down major websites and cryptocurrency interfaces, has prompted demands for the cryptocurrency sector to reduce its reliance on centralized internet infrastructure and accelerate the shift to DePIN.

“On November 18, we saw one vendor become a systemic risk,” Tai Oh, founder of decentralized satellite startup Spacecoin, said in an interview with Enterprise. Encrypted news. At the height of the incident, nearly a third of the world’s most visited websites and applications, such as ChatGPT and X, experienced errors.

“A significant portion of the crypto stack, including exchanges, DeFi dashboards and price feeds, has gone offline at the UI level,” Oh said. Master blockchains Bitcoin and Ethereum It ran normally during the outage, producing blocks and processing transactions at the protocol layer.

“But if your exchange front-end, your wallet API, or your RPC provider all reside behind the same content delivery network (CDN) and web application firewall, your ‘24/7 marketplace’ is only as flexible as that one company’s configuration file.”

Cloudflare was third Widespread internet outage In two months, after the unrest in Amazon Web Services and Microsoft Azure in October, causing global disruption across thousands of platforms.

The company blamed the November downtime on a technical issue. But analysts warn that more outages are likely.

One expert told the British newspaper The Independent: “Modern infrastructure is built on deeply interconnected systems.” “Expect things to fail.”

Cloudflare is an Internet infrastructure company that powers many existing online experiences, including tools that help protect websites from cyberattacks and ensure sites don’t crash, even with high traffic.

Spacecoin’s Oh said the Cloudflare incident shows how cryptocurrencies still rely too heavily on centralized systems that they claim to bypass.

It also exposes the gap between cryptocurrencies’ decentralized base layer and its centralized access layer, where a few cloud providers and CDNs serve important functions such as routing, caching, and DDoS protection.

“We improved performance and convenience… and quietly accepted the concentration of risk in a few cloud and edge providers,” Oh said, adding:

“For cryptocurrencies, which sell themselves on censorship resistance and liveliness, this is a contradiction.”

Christian Keller is head of research at Acurast, a company that has built a decentralized, smartphone-based computing network. The killer said Encrypted news That although on-chain assets remain secure, users lose functional access the moment exchanges, wallets or price feeds become opaque.

“The whole experience falls apart, and trust in the technology diminishes,” he said. Keller added that the risk is systemic, not supplier-specific.

“The conclusion should not be that Cloudflare is bad, but building decentralized systems on top of a narrow group of large central intermediaries is in direct conflict with the principles that cryptocurrencies are intended to achieve.”

DePin networks distribute storage, compute and connectivity across dozens, even thousands, of nodes that operate independently, rather than concentrating the same services in a small number of cloud regions, experts say.

Oh said the architecture of the decentralized physical infrastructure network, or DePIN, could not have prevented Cloudflare’s internal misconfiguration. But it could have prevented such failures from escalating into a global outage.

“The value is in creating autonomously operated alternative paths for traffic when a large edge network or cloud network goes down,” said Oh, whose company recently sent a blockchain transaction through space, using the CTC-0 nanosatellite to validate data between Chile and Portugal.

The deal is seen as a major step towards a censorship-resistant, blockchain-based internet that does not rely on terrestrial service providers.

In the interview with Encrypted newsOh outlined three areas where DePIN could have limited the scope of the explosion caused by Cloudflare’s mass internet outages, and the like.

Alternative transportation routes: Important crypto services, such as exchanges, RPC providers, and oracles, can route traffic over decentralized wireless networks, community-run relay nodes, and low-Earth orbit satellite links. If DNS resolution fails and TLS terminates at a CDN backbone, alternate routes make APIs and trading gateways accessible.
Distributed input and caching: Instead of serving static assets and gateway endpoints over a single network, applications can replicate verifiable content over a network of independent nodes. Losing a single operator appears to be a local performance issue, not a global outage. Traffic can be automatically diverted towards health portals located on different networks and in different jurisdictions
Out-of-band access for “must stay online” actors: Market makers, validators and custodial teams can read and broadcast transactions through orbital links and hybrid satellite-ground networks, allowing continuous access to memory pools and blockchain state even during terrestrial service outages.

“The first part of the cryptocurrency stack that will be leveraged is the infrastructure layer: validators, full nodes, RPC gateways, bridges, and oracle networks,” Oh explained, adding:

“Once these systems can move across the CDN or cloud layer, applications — exchanges, wallets, and payments — can either remain online or gracefully degrade rather than disappear.”

Keller, the Acurast analyst, noted that DePIN networks are getting stronger as more users join. “Users are actively incentivized to participate, thus enhancing a flywheel effect that improves the service,” he said.

Acurast, for example, is working to decentralize computing and networking “away from reliance on hyperscale,” allowing it to “continue serving data and computing requests even when centralized infrastructure is down,” Keller said.

But adoption of decentralized infrastructure in cryptocurrencies and elsewhere is slow. Keller pointed to developer tools and cloud lock-in as huge bottlenecks, since “many teams are still accustomed to centralized cloud platforms.”

While DePIN is “maturing quickly,” moving to new decentralized models costs money and takes time, integration work, and confidence that existing operators won’t be disrupted, he said.

Both Oh and Keller expect Internet outages to continue, predicting that decentralized infrastructure networks will move from a specialized service to a “required resilience layer.”

“In the short term, it will run alongside existing cloud setups for redundancy,” Keller said. “Over the coming months and years, as tools mature and demonstrate reliability at scale, they will replace centralized fasteners in some cases.”

Read the original story DePIN can limit mass internet outages that disrupt encryption. Here’s how by Jeffrey Gogo At Cryptonews.com