In the early 2000s, peer-to-peer file sharing platform Napster revolutionized the digital music industry. Come 2021, Napster’s founder Shawn Fanning has set his sights on revolutionizing the internet itself.
Fanning is one of the minds behind Helium, the world’s first peer-to-peer wireless network. The company is known to be at the forefront of cutting-edge technologies like blockchain and the Internet-of-Things (IoT) – thanks to their decentralized blockchain-powered network built specifically for IoT devices.
As with other networks built on the blockchain, Helium also has its own cryptocurrency. The price of HNT has been steadily climbing since its creation, making the token one to watch.
However, unlike other entries in the cryptocurrency space, Helium is about more than the price of its token. The company’s decentralized wireless networks are taking the worlds of wireless connectivity and cryptocurrency by storm and now it’s targeting 5G.
Let’s take a look at Helium, what’s in store for the blockchain network, and its cryptocurrency.
What is Helium?
Helium was founded in 2013 by Shawn Fanning, Amir Haleem, and Sean Carey. Since that time of release, it’s garnered $53 million in Seed, Series A, Series B, and Series C funding.
Dubbed as the “People’s Network“, Helium’s network was officially launched in 2019.
Essentially, it’s like the Napster of wireless networks in that it relies on a peer-to-peer network to run.
The network is made up of globally distributed hotspots that create public, long-range wireless coverage for IoT devices.
Helium hotspots allow low-powered wireless IoT devices to communicate with each other and send data across the network. The network can be used for asset trackers that monitor equipment, soil sensors on farms, and monitoring water levels in water cooler bottles.
So how does it work?
The Helium network’s hotspots operate much like mining devices used to mine cryptocurrency on the blockchain. What makes these mining devices unique is that they’re paired with wireless gateways capable of providing hundreds of square miles of wireless coverage while simultaneously mining HNT on the Helium blockchain.
Hotspots aren’t designed to replace internet or cellular service for regular devices like smartphones or computers. They operate by using existing WiFi and Ethernet networks and can create Long-fi radio signals to transmit data packets to low-power IoT devices.
Many blockchain networks use Proof-of-Work or Proof-of-Stake algorithms.
PoW algorithms require large amounts of energy, which means PoW miners usually sell the coins they earn from mining to fund their mining activities. Depending on the value of the coin being mined, PoW can be profitable.
Conversely, in PoS mining, mining power is granted based on the percentage of coins held by a miner. PoS can be profitable because holders get profits through staking rewards. Many believe PoS is more sustainable, efficient, and scalable than PoW.
Helium introduces a new algorithm into the mix called Proof-of-Coverage. This protocol allows nodes in a network to reach a consensus when connection quality is highly variable. Helium’s consensus protocol is designed to be permissionless so that any hotspot operating within the consensus rules and network specifications should be able to participate freely in the network.
The PoC algorithm is used to verify that hotspots are located where they claim. Hotspots on the network are randomly and automatically assigned PoC challenges to complete, and miners on the Helium blockchain earn HNT when their hotspots pass and witness these tests. We’ll get to that next.
Getting involved with Helium
1. Becoming a hotspot
There are currently more than 90,000 hotspots set up around the world, thanks to their current patrons. By installing a Helium compatible hotspot in their home or office, miners around the globe are expanding the Helium network.
As a reward for providing this wireless coverage, Helium blockchain rewards hotspots operators with HNT. Hotspots earn HNT for transferring device data over the network.
Hotspots can also earn HNT by completing PoC challenges. For example, HNT is rewarded to any hotspot that creates a valid PoC challenge and submits the corresponding receipt to the blockchain.
Operators do not have to actively participate in the mining process in order to receive HNT rewards. Once their hotspot is deployed and synced, the hotspot can perform mining activities on its own.
Helium’s reward structure is set up so that 65% of all mining rewards are currently going to hotspot infrastructure. The remaining 35% are being distributed to Helium, Inc and other network investors.
Becoming A Hotspot For Helium Yourself
In order to get in on the action, you need a hotspot device. When Helium first launched, the company sold more than 20,000 of its original Helium Hotspots. Since then, the devices have sold out, but there are third-party devices available.
2. Becoming a validator
Another way to get involved in the Helium blockchain is to become a validator. In order to become a validator, you have to deposit 10,000 HNT and run validator node software. This software is used for performing consensus group work such as verifying transactions and adding new blocks to the blockchain.
Like miners, validators are rewarded for their investment in the Helium network. The validator pool is allocated 6 percent of overall HNT rewards.
3. Using the network
Enterprises and developers can use the Helium network to connect devices and build IoT applications. And there are some big names already on board including cloud-based software company Salesforce.
“Helium provides the right mix of low power, high security, and robust coverage in urban locations that we’ll need to grow this program further,” says Jay Langhurst Senior Application Architect, IT, Salesforce.
Other Helium network users include electric scooter and bike rental company Lime Micromobility, GPS and IoT tracking device manufacturer Digital Matter, wireless environmental monitoring company Conserv, and vehicle and asset monitoring company Lonestar Tracking.
“With The People’s Network, we rarely need to deploy infrastructure and can leverage a rapidly growing network,” says Thomas Remmert, Co-Founder and CTO, LoneStar Tracking. “The price of our sensors has dropped tremendously and the Network allows us to maintain a high level of security and encryption, to keep users’ data private.”
The Helium network gives users the ability to pay based on device usage and pool data across devices. It also provides connectivity without the need for sim cards. There are no data caps on the Helium network and users aren’t charged overage fees.
4. Investing on Data Credits
Now let’s talk about Data Credits which are used to pay for all transaction fees on the Helium blockchain.
Data Credits are a utility token pegged to the U.S. dollar. They are derived from HNT in burn transactions and can be used to pay transaction fees for wireless data transmissions on the network. These credits cost $0.00001 so users can $1 is equal to 100,000 Data Credits.
Like other blockchain networks, these credits are required for transactions. Data Credits are required for transferring HNT from wallet to wallet, but they’re also required for using the Helium network. Users must pay transaction fees for sending or receiving sensor data. Data Credits must also be paid to add a full hotspot to the blockchain and to add a data-only hotspot to the blockchain.
To date, there have been more than $1,672,518 Data Credits spent. These credits are non-transferable, which means they can only be used by their original owner and cannot be re-sold or traded.
5. Investing on HNT
While Data Credits have little value outside of the Helium blockchain, Helium’s token, HNT, currently does. As of this writing, the price of HNT is more than $20. At its peak in May 2021, the price of HNT reached more than $22.
HNT has a circulating supply of more than 96 million. Since 2019, the Helium network has mined a target of 5,000,000 HNT per month. The Helium blockchain uses a two-year halving schedule and has a maximum supply of 223,000,000 HNT.
You can purchase HNT on major cryptocurrency exchanges like Binance.
The Future of Helium
In April, Helium announced they were partnering with FreedomFi, an open 5G company, to help mobile network operators accelerate their 5G coverage. In order to do this, Helium is using FreedomFi Gateways.
So what’s the deal with this partnership?
FreedomFi Gateways are connectivity devices that pair with 5G antennas. They’ve been designed to work with the Helium Network to provide 5G cellular coverage.
The new 5G network will roll out to select cities in the United States over the course of 2021. In the future, Helium plans to expand the network to other countries.