Helium (HNT) — ‘The People’s Network’
In one line: The future internet service provider.
In one more line: Helium seems to be building the foundational infrastructure of a reimagined blockchain-based incentive model for being online, probably coupled with emergent satellite technology like Starlink; it prioritizes decentralization, full encryption/security, cost/energy efficiency, and sovereignty over profits & indiscriminate exploitation of user data.
In one last line: This is one of the most exciting projects in Web 3 and their recent partnerships with Dish Network & Drone Dek add legitimacy to the long-term outlook
Symbol: HNT
Price: $39
Market Cap: $4 Billion
Consensus Mechanism: Proof of Coverage
Block Time: 30–60 minutes
Staking/Earning Link: https://www.helium.com/stake#beginstaking Token Cap: 223MM
Nakamoto Coefficient (Measure of Decentralization): See page 17 on “Nakamoto Consensus-based system”
EVM Compatible: N/A
Easiest Place to Purchase: Crypto.com (App Only) or FTX
Founder/Noteworthy Contributors: Shawn Fanning, Amir Haleem, & Sean Carey (2013)
Developer Metrics & Rank (see CryptoMiso): 610; Rank #65 Website: https://www.helium.com/
The Founders:
- Sean Carey was originally the CTO and now serves as an advisor; a systems architect and founder of P2P network Napster
- Amir Haleem is a professional gamer and game designer; once the best Quake player in the world; acting CEO and avid cypherpunk
How it Works — 3 Core Components:
- Helium Hotspots:
- Like routers you use for wi-fi; don’t transmit wi-fi signal rather long-fi signal similar to radio
- Long Range Wide Area Network (LoRaWAN) wireless devices providing connectivity 200x farther than wi-fi (WLAN) with Helium LongFi
- Long range increases ease of transmitting small packets of data from IoT devices connected to network
- Low signal frequency = use little/no energy + take little/no energy from connected devices
- 357,214 online (increase of 90,541 over last 30 days)
- Fetching data from hotspots costs cryptocurrency, which is where the blockchain comes in
- Incentive for building and securing the network — anyone who deploys the hotspot earns Helium’s native HNT token for providing devices with connectivity
- Hotspots can connect without a WLAN or SIM card and are more power-efficient
- Only 50–100 hotspots are needed to provide coverage for an entire city
- A project developed to provide a web browser front-end for users to manage organizations, devices, and a Helium-Blockchain compatible LoRaWAN Network Server called Router
- Easily integrated with popular platforms like Google Drive & MSFT Azure
3. Helium Blockchain:
- Based on “Honey Badger BFT” & “Proof of Coverage”, designed to support nodes with spotty connection b/c not all hotspots are always online or could go offline while validating a block
- Checks on whether or not hotspots are broadcasting long-fi signal or not; randomly selected hotspots within range of others initiate “coverage challenge” to confirm; if the hotspot passes both earn a portion of block rewards
- Validators are also earning block rewards and were brought online to support the rapid growth of the Helium network; must be online at all times with minimum stake of 10,000 HNT + 5-month lock-up
- Estimated ~7% APY
Proof of Coverage:
- A variation on Proof of Work (PoW), relies on mining to achieve network consensus, however the miners (which are Hotspots/nodes), double as internet access points
- Cryptographically verifies the locations of hotspots which are then responsible for providing wireless coverage for IoT devices
- Hotspots transmit coverage proofs; the best proofs are more likely to verify tx and mining blocks
- The mining rewards depend on the amount of data flowing through each hotspot
- Like pre-paid cell minutes or airline miles; non-transferrable
- The only payment accepted to send data over Helium network
- Allow users to connect to LongFi + use for blockchain tx fees
- 1 DC = $0.00001; fixed in USD
- To acquire DC, users convert HNT; any HNT converted is permanently removed from circulating supply
- “Burn-And-Mint Equilibrium” explanation
- No pre-mine or ICO
- HNT emission cut in half every 2 years until max supply is reached
- New HNT split across hotspots, validators, Helium Inc., & investors
- When minting isn’t able to reward hotspots, “net emissions” effectively recycle a pool of ‘burned’ HNT to continue rewards, capped at 1% of current issuance; the system monitors data credit usage on the network and adds that amount up to the 1% cap onto the issuance supply annually, balancing the allowance of rewards in later years and deflationary policy
- As the network grows in usage, the value-seeking tokens (HNT) are burned and the tokens should accrue more value; as they grow in value less needs to be burned to receive the same amount of USD-denominated payment tokens (DC); the reverse occurs if network usage decreases
5G Impact on Value Accrual:
- 5G signal = very short range and easily disrupted (ie: too much humidity in a room could cut the connection); this means devices need to be installed in almost every home to become usable making it cost prohibitive
- Helium is incentivizing people with passive income (paid in HNT) to run their own 5G networks; since HNT is needed to obtain DC to use the network, demand should increase
- If legacy ISP begin to leverage Helium as part of their own 5G infrastructure, demand would rapidly increase
- Helium has the ability to scale rapidly; much more quickly than the legacy incumbents
Risk Considerations:
- Competition from Space X’s Starlink + Amazon’s Sidewalk
- Helium’s code is open source and hence could be easily copied
- Potential privacy concerns over third-party hotspots via not enough decentralization
- Supply-chain/chip shortage means 5G hardware prices remain inflated and unaffordable
Extra Credit:
- Today = long-range connectivity for Internet of Things (IoT) devices
- Future = connect all devices to internet via wireless 5G networks
- The low frequency for IoT has no laws, licensing, or regulations attached in the US which made it the perfect fit as a starting point for Helium’s P2P network
- Being blockchain-based allows wireless to scale more rapidly & at a fraction of the cost of current models
- Decentralized global network of hotspots doubling as network miners and wireless access points
- Users pay based on actual data usage
SOURCES:
https://messari.io/article/burn-and-mint-equilibrium
https://www.gemini.com/cryptopedia/glossary#proof-of-coverage-po-c
https://coinmarketcap.com/alexandria/glossary/consensus
https://www.nanalyze.com/2021/10/helium-coin-stock-hnt/
https://medium.com/general_knowledge/helium-mindblowing-iot-project-hnt-potential-96c2e2dff13b
This is not investment advice nor is it an endorsement or solicitation of any kind. I do NOT recommend you invest in Helium or buy the token HNT. Investing in cryptoassets is extremely risky, volatile, and may result in significant losses of capital. Those risks should be evaluated independently or with a professional before taking any action. For the sake of disclosure, you can assume I invest in everything I write about and am not recommending you do the same. Please do not use this information as a foundation for making investments in Web 3.
