What is the Helium Network?

The Helium Blockchain, Helium Network, and Helium Currency Explained 

The Helium Network, founded in 2013, is one of the world’s first decentralized, blockchain-powered wireless networks. The network, which is powered by the Helium blockchain, allows individuals to own and operate their own wireless network for low-power Internet of Things (IoT) devices. According to Helium, their network, which is also referred to as The People’s Network, is currently the world’s fastest-growing wireless network. 

Currently, Helium reports that there are over 400,000 hotspots worldwide utilizing the Helium network. Helium is currently available in North America and Europe, with one of the main advantages of the network being that it can provide lower-cost internet access than traditional wireless networks. Each hotspot only uses 5W of energy, significantly lower than traditional wireless routers. 

In October 2021, Helium announced a partnership with Dish Network. DISH is the first large carrier to use the Helium Network for customers utilizing their own 5G CBRS-based hotspots. This is a big win for Helium and may lead to more carriers partnering with the network. 

What Devices Can Interface With The Helium Network? 

The Helium Network can provide wireless connectivity to pretty much all kinds of IoT devices. IoT technology can be implemented into medical and fitness sensors, home appliances, such as refrigerators, A/C, and heating units, smart pet collars, environmental sensors, industrial equipment, medical sensors (including wearable devices), and countless other types of hardware devices. 

Helium’s wireless system is referred to as LongFi, and, unfortunately for users, is not currently designed for high-bandwidth use devices such as smartphones and computers. However, for the devices it does support, Helium provides significantly longer ranges, over 200x greater than conventional Wi-Fi, and is designed to preserve battery life for supported devices. 

How Can Helium Devices Be On Boarded Onto The Network? 

Currently, companies are the main customers for Helium; not individual users, though individual users may wish to operate a hotspot. For enterprise clients, a client is first provided a unique identifier (OUID), which is then added to the Helium Blockchain. At this point, the company can onboard an unlimited number of devices, each of which will be assigned the same company identification number. 

To use data, the company pays Helium Data Credits to the Hotspot in exchange for sending packets. These credits are denominated in HNT; at the end of the mining period, the operator of the Hotspot will be provided tokens proportional to the amount of data other Hotspots sent during the same mining period. This creates a natural supply and demand function for the Helium network. 

What Are Some Common Applications of the Helium Network? 

There are a wide variety of applications of the Helium Network for enterprises. These can include: 

• Package delivery and verification 
• Supply chain logistics 
• Collecting population health data via wearable devices
• ESG efforts via power use and pollution tracking

Like other blockchain applications, one major benefit of using a blockchain-based system is that users can prove the time and location for each network connection. This creates immutable data on the blockchain that companies can use to prove that data was sent from a device at a certain time. Helium refers to this concept as being similar to a “cryptographic notary” which can simplify environmental, financial, supply chain, and other types of audits. 

Users Can Mine Helium Currency By Providing Wireless Network Coverage 

Unlike other mining models, such as the traditional proof-of-work model employed by Bitcoin, or the proof-of-stake model currently being implemented on the Ethereum blockchain, Helium allows users to mine their native currency, HNT, by providing wireless coverage to nearby devices. The amount of HNT mined is directly proportional to the amount of device data that is transferred over the network. This can be considered a unique form of the proof-of-work model that they refer to as “proof-of-coverage.”

As of early 2022, the market cap of HNT was approximately $2.9 billion, with more than 107 million coins in circulation, with a price of $27+ per coin. In mid-November 2021, the coin reached an all-time high of $55.22. 

Helium Can Also Be Staked Via Validator Nodes  

Like other types of blockchains, Helium allows for more committed users to run their own validator nodes to provide consensus and add new blocks to the blockchain. Running a validator node currently requires a stake deposit of 10,000 HNT (currently approximately $220,000), as well as having the proper hardware and software to appropriately run the node. Running a validator node provides an additional HNT reward while helping scale up the network as a whole.  According to Helium, as of early 2022, over 29 million HNT is staked by nearly 3,000 validator nodes across Europe and North America. Those who cannot afford the full 10,000 HNT can participate in an independent staking provider in order to earn a large fraction of the awards of a traditional validator node. 

Despite the potential benefits of staking HNT, withdrawing the staking amount can be time-consuming. The withdrawal process lasts approximately 5 months or 250,000 blocks, during which the staker cannot earn any rewards. Afterward, the staked amount of HNT is returned to the owner’s wallet and can be exchanged for cash or other cryptocurrencies on exchanges that sell HNT. Currently, Binance, FTX, and CoinEX support HNT trading and swapping, while it is not supported by most other exchanges, including CoinBase. This lack of exchange support may be a factor that makes HNT somewhat less attractive for investors. 

In Conclusion: Helium Has Potential, But May Have Difficulty Reaching Mainstream Adoption

The Helium Network is an exciting new concept and is particularly useful for certain applications due to the proliferation of IoT-capable devices across a wide range of functions and industries. However, Helium’s major limiting factor is that it is not designed for high-bandwidth devices like smartphones and computers. If Helium can advance its technology to increase its bandwidth options, it could prove to be a serious competitor for traditional Wi-Fi routers and systems. In addition, the high cost of running Helium nodes may prevent more widespread adoption of the system. 

For now, Helium will likely remain a useful, niche product, but is unlikely to become a household name until it advances its technology far enough to be applicable for ordinary users, many of which are not fully aware of (and may not care about) IoT applicable devices. Helium, however, will continue to have lots of potential for industrial applications or other commercial uses, such as tracking energy use, water use, traffic patterns, or other types of environmental data at long distances for low amounts of money. 

References

1. Use the Network. The People’s Network delivers secure, ubiquitous, and affordable wireless connectivity. Helium. 
2. (2021, Oct.). DISH Partners with Helium to Leverage the Helium Network Blockchain Model using CBRS Spectrum. DISH Newsroom. 
3. (2021, Dec.). Helium (HNT) Price, Charts, and Info. Coinbase. 
4. (2019, Aug.). Learning About LongFi . Medium. 

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