Launched in July 2019, Helium is an open-source blockchain network designed to power Internet of Things (IoT) devices with wireless connectivity. In order to create a global, ubiquitous wireless network, individuals are encouraged to host Hotspots, which mine HNT for building and securing the Network, while providing connectivity to nearby devices.
As Helium Hotspots are expanding worldwide, developers and businesses are able to connect a whole new class of IoT devices that would otherwise be impossible, from remote wildfire or environmental sensors to a smart pet collar, scooter or bike that can be tracked across a city.
A Network of Helium Hotspots
With Helium LongFi, which combines the LoRaWAN wireless protocol and the Helium blockchain, hotspots can be configured to provide 200 times more coverage than Wi-Fi. Additionally, Helium Hotspots also serve as miners on the Helium blockchain, incentivizing anyone to build a network and transfer device data at a fraction of the cost of cellular. To cover an entire city, 50-100 hotspots are sufficient.
A variety of Helium Hotspots are available through third-party manufacturers that have been approved by the Helium Community. Hotspot demand has been exceptionally high, matching the rapid global growth of the Helium crypto community and the ecosystem of developers developing applications to use the Network.
Helium Network vs. Traditional Internet Providers
- Helium is an inherently decentralized network with full encryption that provides a high level of security and ubiquitous internet access at a fraction of the cost of traditional cellular data.
- Users only pay for the data they consume.
- Helium’s crypto protocol does not have any of the limitations and fees associated with cellular providers, like data caps or overage charges, nor does it require users to purchase hardware like a SIM card.
- To start using the Helium Network, a user simply has to choose any LoRaWAN-compatible sensor, and onboard their devices using the Helium Console.
Helium Network’s Proof of Coverage
The Helium Network uses Proof of Coverage (PoC), a novel work algorithm that rewards users for verifying coverage, thus proving location and network connectivity. Proof of Coverage is built on top of the Helium Consensus Protocol, which incorporates the HoneyBadgerBFT multi-party computation consensus protocol.
Participants deploy Hotspots to participate in building the Network and earn Helium mining rewards through a novel incentive model powered by the Helium blockchain. The Helium Network’s implementation of mining is carried out by means of radio wave technology rather than traditional mining rigs like GPUs or ASICs, making Hotspots much less energy-intensive than their traditional counterparts.
Hotspots are occasionally given tests to cryptographically prove that they are indeed providing radio coverage in a particular place and a particular time. These tests are assigned randomly and automatically, and passing them earns a Hotspot operator HNT rewards.
Helium Hotspots can also earn HNT by transferring data from nearby devices over the Network. The more data transferred, the more rewards earned.
Hotspots earn HNT in proportion to the value they contribute to the Helium crypto ecosystem by completing PoC challenges, serving as witnesses for peers’ performance, and transferring device data, with the largest volume of HNT rewards going towards network data transfers.
Cryptoeconomics: HNT Coins and Data Credits
Hotspot operators earn HNT for providing coverage and transferring data on the Network. As of June 2021, there are about 90 million HNT coins in circulation, with a maximum supply of 223 million HNT. The project initially launched with zero HNT in circulation and without a pre-mine, which was intended to create a more even distribution of HNT throughout the market.
New Helium blocks are produced every minute with HNT rewards distributed approximately every 30 blocks. HNT’s coin emissions rate began at five million HNT per month and halves every two years. On August 1, 2021, the issuance of HNT coins will be reduced to two and a half million HNT per month.
Also central to the cryptoeconomics of the Helium Network are Data Credits. Each device using the Helium Network is required to spend Data Credits to send its data to the internet, and users pay with Data Credits to access the Network. Data Credits are fixed in value, tied to individual users, and not transferable. One Data Credit is fixed at a value equivalent to $0.00001 USD. Data Credits are minted by burning HNT, establishing an equilibrium where, as the network grows and more devices use Data Credits, more HNT coins will be burnt.
Future of Helium Network
Helium is building a next-generation wireless network with the potential to connect billions of compatible devices all around the world. As of July 2021, the Network already hosts over 88,000 Helium Hotspots in more than 8,000 cities globally and is adding the second major wireless network in the coming months, Helium 5G. In addition, Validators using a Proof-of-Stake model just launched on the Helium blockchain to further secure and scale the Network.
Beyond the growth of Hotspots, the Helium ecosystem is scaling quickly and includes an array of hardware and software solutions. This growing community brings together Hotspot manufacturers, IoT businesses and applications, developers, staking providers, and more. The Helium Network also includes a number of new businesses, such as D-Web Technologies, who are expanding the Helium crypto ecosystem by deploying Hotspots and implementing sensor solutions for leading businesses across industries.
The Helium Network is making incredible headway in tackling the challenge of IoT connectivity as the number of IoT devices increases exponentially and serves as a blueprint for how all wireless infrastructure of the future can be built.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
