Find out why the decentralized blockchain Helium is considered “The People’s Network” in our “What is Helium?” guide.
- What is Helium?
- Who created Helium?
- How Helium works
- Helium LongFi
- What is HNT?
WHAT IS HELIUM?
Helium is a decentralized blockchain-based network that connects devices wirelessly to the internet. It is primarily used to connect Internet of Things (IoT) devices. The network allows wireless communication between these devices and the smooth transfer of data between them through network nodes. These network nodes are known as Hotspots.
Dubbed as “The People’s Network,” Helium offers wireless connectivity at much cheaper rates compared to traditional wireless networks. Similarly, it aims to incentivize the users by allowing them to earn HNT tokens in exchange for setting up Hotspots. The primary concern with the current IoT hubs like Google and Amazon has always been privacy. This is where the decentralized nature of Helium comes into play. By providing a reliable, decentralized blockchain-based network, Helium aims to gain credibility as a network safe for privacy-conscious individuals to connect their IoT devices.
Helium also introduced the concept of the LongFi network. It was mapped out to power IoT devices. Currently, the network has more than 440,000 user-operated nodes or hotspots worldwide.
WHO CREATED HELIUM?
Amir Haleem, Shawn Fanning, and Sean Carey co-founded Helium in 2013. The purpose of Helium was to prepare IoT for its trek into the future. The Helium network was publically launched in 2019, and Amir Haleem is currently serving as its CEO. Haleem has vast experience in the gaming industry, especially in the realm of eSports. Shawn Fanning is well known as the founder of Napster, which was a music streaming platform back in the ’90s. It was one of the first mainstream peer-to-peer (p2p) services on the internet at that time. Sean Carey has held multiple development posts, most notably at ‘Where,’ which is an advertising optimization firm.
According to CEO Amir Haleem, Helium aims to encourage people to become the operator of their own network, which is why Helium has been nicknamed “The People’s Network.” According to Kyle Samani, who is the managing partner at Multicoin Capital, “Helium presents the most ambitious new use case for blockchains we’ve seen since Ethereum.”
HOW IT WORKS
Helium is a wireless network that aims to provide a low-cost and secure way for the Internet of Things (IoT) devices to interact with the Internet. Helium’s consensus mechanism is a unique “Proof of Coverage,” which is a type of Proof of Work (PoW) algorithm. It employs radio waves to validate that the hotspots provide operable wireless coverage. PoC uses the Helium consensus protocol that is based on the HoneyBadger Byzantine Fault Tolerance(BFT).
The Helium Hotspot is a low-cost hardware device that is a plug-and-play wireless device that allows up to 200 times the connectivity compared to traditional Wifi. It employs the use of Helium LongFi. This technology is a product of the Long Range Wide Area Network (LoRaWAN) wireless protocol and the Helium blockchain. The users of Helium act as validators. They do so by utilizing the Hotspot device to enhance the network’s coverage. The Hotspot lets the users earn HNT tokens by transferring data within the network.
Once connected to the Internet and becoming a part of the network, those hotspots can communicate with each other. It results in the broadcast of long-range radio waves, thereby creating a wide area network to which other IoT devices can then plug into and interact with. It is estimated that the coverage of an entire city would require only 50-100 Hotspots. Hotspots by Helium are also constantly being checked by the PoC challenge. Only those hotspots are elected whose performance is well in the PoC challenge.
Helium LongFi allows any device to send or receive a message within the network’s coverage area and have their message relayed by a webserver without any cost. LongFi enables many devices to launch simultaneously without the involvement of any third party and with no additional configurations. The devices that are launched are tracked with IDs that are stored on the Helium blockchain and are able to circulate data in the network through any Hotspot. Through data transfer, the device owners are rewarded with HNT tokens.
As of December 2021, Helium hosts an impressive number of more than 440,000 Hotspots. These are spread out to more than 10,000 cities worldwide. Along with the growth in the number of Hotspots, the Helium network is expanding quickly. Also, it includes the formation of hardware and software solutions, with specific relevance on overcoming the challenges of IoT connectivity.
WHAT IS HNT?
HNT is the native token of the Helium network. Within the network, it has a dual utility. First and foremost, it is given as a reward to the operators. The operators of Helium Hotspot earn HNT for providing coverage and data transfer services on the Network. Similarly, the users or holders of HNT can burn HNT to create data credits (DC). These are tokens that can be used to pay for transaction and network fees. In terms of utility, they are quite similar to the cellular data purchased by mobile phone users, as they allow the users to use and transfer data on the network. Data Credits are not transferable and have a fixed value. Its value has been pegged to the value of the US dollar and one DC is equal to 0.00001$. Data credits are coined by burning HNT. In this way, equilibrium is created because as the network grows, more devices will use data credits, and in turn, they’ll burn more HNT coins, hence increasing the scarcity/value of HNT.
Initially, the project was launched with zero HNT coin circulation, as none of the HNT was mined in advance. In July 2019, the first HNT was mined. The network aimed to mint 5 million HNT every single month, thus taking the total number of HNT coins available to be mined at 60 million per year. Later on, in late 2020, the community approved an update, through which, the amount of HNT produced is halved after every 2 years. Basically, this means that within 50 years, the number of HNT mined will be 3-4 HNT per year. The maximum number of HNT tokens is capped at about 220 million. As of December 2021, more than 100 million HNT coins are in circulation.
The primary concern with Helium is that it requires massive participation in order to make it’s model a viable one. Although it has grown exponentially over the past few years, it still requires many more users to adopt this concept. Another concern that has been raised is that the initial threshold for entry is too high. Even though it seems quite affordable compared to other networks, its miner costs in excess of $400 which is quite high for a newbie looking to dabble in crypto; similarly, it might take quite some time for a user to recover their investment and turn a profit. There is also an issue of the lack of profitability that many users have complained about. This is especially true in areas where there are little to no other miners nearby.
Where To Buy HNT?
You can purchase Helium’s HNT token through the Gate.io exchange, similar to how you would buy another cryptocurrency. You can either place a market buy or a limit buy. With a limit buy, you determine the price you are willing to pay, and your order gets filled once the token price reaches your limit price. If you want to get your hands on the token quickly, you can place a market order, where you agree to pay the current price and have your order filled almost immediately. If you are interested in purchasing HNT, you can do so by visiting Gate.io.