🤔 What is Helium ?
Helium is a global, decentralized grid of hotspots that create wireless network for IoT devices. IoT devices use the network to access internet and interact with other IoT devices.
🤔 What is IoT(Internet of things) ?
📝 Origin of Helium
- It was founded by Shawn Fanning, Amir Haleem, and Sean Carey in 2013. They realized that it was not possible for a single company to build and deploy a worldwide network to provide coverage to all the IoT devices.
- They discovered blockchain and decided to use it to reward people to deploy the network.
- They launched their blockchain and first hotspot in July 2019.
👴🏻 Founders
Sean Carey
- He has experience working as system architect.
- He co-founded Helium and worked as its CTO till 2015.
Shawn Fanning
- He was born on November 22, 1980 in USA.
- He developed Napster, the first peer-to-peer music sharing platform which amassed over 27 million users in 3 years. It was shut down in 2001 because it encouraged piracy and illegal sharing of copyright material.
- He co-founded Rupture, a networking tool for World of Warcraft players in 2007. The company was later acquired by Electronic Arts for $30 million.
- Shawn is one of the cofounders of Helium. Currently, he works as an advisor to the Helium project.
Amir Haleem
- He did B.Sc in artificial intelligence from The University of Manchester in 1999.
- Amir was the best Quake player in the world in 1998. He also worked as Lead game designer at EA Digital Illusions, where he developed Battlefield 1942.
- He also co-founded Global Gaming league and Diversion, Inc.
- Amir co-founded Helium and is the current CEO of the project.
😌 What problems does it solve ?
- Deploying Helium network will give a boost to the IoT industry. Companies will focus on developing IoT hardware instead of creating their own network. IoT devices find applications in a variety of fields like health, smart city, cars, hospitals, etc.
- Wifi ranges limit the deployment of IoT devices. Helium uses longfi technology that extends range by several kms.
- Traditional telecom companies invest millions of dollars to buy frequencies and set up network, before they generate any revenue. The economics are already working against them, even before they are able to earn a single penny.
🤖How does it work ?
HNT
HNT is the native currency for the Helium network. It is used for:
- Hotspots earn HNT for building Helium network and taking part in proof of coverage(will be covered subsequently).
- They also earn HNT for transferring data from nearby IoT devices. More the data transferred, more the reward.
Data credits
Data credits is the second cryptocurrency in Helium ecosystem:
- IoT devices use it to pay hotspots to transfer data over Helium network.
- They are also used as blockchain transaction fees, similar to gas fees on Etherium.
- Data credits are minted by burning HNT. They have fix value of $0.00001 and cannot be converted back to HNT.
Hotspot Nodes
People acquire and deploy Helium hotspots which provide internet coverage to IoT devices using wireless technology called longfi. Helium hotspots are like traditional Wi-Fi routers, but transmit longfi signal.
Hotspot nodes mine HNT in exchange for building the network and providing connectivity.
LongFi
Longfi signals are low bandwidth signals that use much less power and have long range. They are perfect for IoT sensors like temperature sensor which need to transmit a few kbs of data but are deployed at long range.
Proof of coverage(POC)
It is used to verify hotspot’s location and long-Fi signal strength. It involves following steps:
- Challenger: Challenger hotspot issues POC challenge.
- Challengee: This hotspot is the target of the POC challenge. Challengee hotspot transmits “proof” to be witnessed by nearby hotspots.
- Witness: They receive “proof” signal and report the existence of challengee hotspot.
Challenger, challengee and witness hotspots earn HNT for taking part in proof of coverage.
Validator nodes
Helium blockchain uses proof of stake consensus mechanism to achieve distributed consensus. Validator nodes have to stake 10,000 HNT to verify transactions and add new blocks to the Helium blockchain.
Validator nodes also earn HNT tokens for providing their services.
🏛️ Governance model
Helium Inc, which is a for-profit company, maintains and develops Helium code base. It makes little sense for them to decentralize the control of Helium project in the future.
Community can submit improvement proposals in form of HIPS – Helium improvement proposal, but Helium Inc decides whether or not to implement the proposals.
😨 Competitors
Amazon sidewalk: Amazon devices act as hotspot routers that allow IoT devices to use their network to access internet.
👍 Tailwinds
- Partnerships: IoT companies are manufacturing devices that use Helium network.
- No competition: Helium is the first of its kind project. It does not have any major competition.
- Growth of IoT: Number of IoT devices is growing exponentially.
- Tokenomics: HNT token was not premined. The company will get 35% of HNT tokens when they are minted in the future. This aligns team’s long-term incentives with the growth of the project.
- Network effects: More people will set up hotspot nodes as more IoT devices requiring connectivity are deployed. IoT Companies will manufacture devices to use Helium network as it gets widely available. This positive feedback loop will result in explosive growth.
- Switching cost:
- Helium hotspot miners have invested substantial money and time in setting up their node and earning HNT. They would not want to switch to another network without a solid reason.
- Companies would find it difficult to suddenly discontinue their IoT products built for the Helium network.
😨 Risks and challenges
- helium is a centralized protocol maintained by a single private company. There is no guarantee that the company will not face difficulties like internal disputes, government regulations, lawsuits–for selling unregistered securities, etc.
- Helium hotspots use free-to-use unlicensed frequency bands. Frequencies are a limited resource, that are leased by governments for millions of dollars. It is possible that governments decide to regulate frequencies that are being used by Helium project.
- Data credits are minted by burning HNT and have fix value of $0.00001. Helium uses just 9 unknown oracles to decide the rate for HNT to data credits conversion.
Helium project can solve the problem easily by using existing solutions like chainlink etc.
- Like other blockchains, Helium will also have to scale its blockchain to accommodate billions of IoT devices.
💰 Tokenomics
HNT has max supply of 223,000,000 tokens, none of which was premined. However, HNT being minted in the future will be distributed as follows:
Token Inflation
- HNT supply is cut in half every 2 years
- HNT is burned to mint data credits. More HNT will be burned as more and more IoT devices use Helium network.
Net emissions
- Net emissions ensure that hotspot miners are incentivized to run their nodes once all the HNT is mined.
- Helium network will issue as many HNT tokens as were burned to mint data credits.
- Net Emissions would counteract the deflationary effect of burning HNT to mint data credits. This will make the circulating HNT supply constant and equal to max supply, once all the HNT have been mined.
Demand pressure
Token’s price increases due to demand pressure.
Demand pressure on HNT token will come from:
- Validator nodes: They will acquire HNT tokens for staking.
- IoT devices: They will acquire HNT to mint data credits.
- Speculators: There will buy HNT tokens and hope to sell it at a higher price.
Supply pressure
Supply pressure on a token decreases its price.
Supply pressure on HNT token will come from:
- Nodes: They will sell part of their earnings to cover their operational costs.
- Early investors: They have made a handsome profit. Many of them will sell part of their holding to realize gains.
🤑 How much money does Helium have for future development ?
- Helium team raised $53.8 million from investors by selling security tokens.
- The team hold security tokens that give them access to 35% of total supply of HNT token in the future.
Market opportunity
IoT is a multibillion-dollar market growing at an exponential rate.
HNT token has tremendous room to grow even if it can capture a small portion of the market.
🧐 Indicators to watch out for
- Helium Youtube channel is growing:
- Helium Twitter account is growing:
👋Final remarks
It is also possible that legacy network providers start installing hotspot nodes and earning HNT, instead of competing with Helium by rolling out their centralized parallel network.
It would be very difficult for network providers to roll out 5G network centrally. This is because 5G has much less range and a transmitter would have to installed every 500-600m. It would be very difficult for a single company to deploy and maintain so many transmitters.
However, Helium can roll out 5G hotspot routers worldwide at a much faster rate.
Helium is a fully functional product. All that remains is to scale the existing technology.
😊 Do further research
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