By Aidan Kalish | Crescent City Capital Market Analyst Intern
Helium is a blockchain-powered network of long-range wireless hotspots. Launched in 2019, the goal of Helium is to create a network for the Internet of Things (IoT) called “The People’s Network.” Traditionally only computers and smartphones, which are essentially portable computers, have been able to connect to the internet. The idea behind IoT is to have a worldwide network that any device can be connected to. New smart devices that promise greater accessibility through internet connectivity have begun to replace their traditional counterparts. Although at its core it means any device connected to the internet, it has become more popular to use IoT to define devices that “talk” to each other. Helium intends to create a global, decentralized, and reliable network that supports IoT devices.
There is already some framework available for IoT in the form of cellular networks and public Wi-Fi but the issues with them are availability and price. Helium aims to address these issues by developing “The People’s Network” through the use of a shared internet hotspot system. Users are able to purchase a Helium hotspot to help expand the network. Users are incentivized to do this because by purchasing a hotspot they become part of “The People’s Network” and have the opportunity to mine HNT, the blockchain’s native token. Helium uses an algorithm-based mechanism called Proof of Coverage (PoC) to check the legitimacy and locations of hotspots. Hotspot owners earn HNT for providing internet connectivity to neighboring devices. HNT can then be exchanged for U.S. dollar-pegged utility tokens. Hotspot owners receive HNT based on how much they contribute to the network. HNT can be earned in three ways:
- By monitoring PoC activity of other hotspots
- By transferring data from devices on “The People’s Network.”
- By participating in PoC challenges and validating the wireless coverage of other users. Each hotspot involved in the challenge earns a portion of the HNT allocated to the task.
The platform also utilizes fixed-value data credits which are sued as transaction fees by devices so data can be sent to the network. They are created by burning HNT and net emissions, which recycles burned HNT into rewards for hotspots as the issuance of new coins decreases over time. Helium has been making its network more accessible by partnering with companies across many different sectors. As this network of partnerships grows, the service will become more powerful and be able to serve many different users. Helium’s current ecosystem can be found here.
At the time of writing HNT has a market cap of $511 million and a fully diluted market cap of $902 million. HNT began 2022 trading at $40.13 and has significantly fallen to a current price of $4.04.
Helium continually looks to improve and expand its capabilities. Through the use of a community-led Helium Improvement Proposal system known as the HIP process, the community proposed an innovative solution to build Helium beyond IoT called HIP 51. HIP 51 was proposed in January 2022 and allows any network protocol to join Helium. This allows Helium to become the network that drives any network infrastructure such as 5G, VPN, or Wi-Fi. The more networks using Helium, the more network traffic, and data credits are used which increases the overall value of Helium’s network.
Helium has also been discussing the issue of the network’s scalability with HIP 70. Hip 70 proposes the move of the entirety of Helium, from its native blockchain to HNT to governance procedures and mining rewards, to Solana. Solana’s massive ecosystem would allow Helium to become compatible with current projects within Solana, driving more utility to Helium’s token holders. HIP 70 is still currently under discussion.
Helium has shown that there is a vision for the future of the network and are expanding and improving the network’s infrastructure to turn the vision into a reality. Considering the current low price of HNT, the possibility of a merge with Solana may inflate the token’s value, encouraging an immediate short-term investment. A long-term investment may also be worth looking into as the IoT and 5G ecosystems are only growing which leads to more utility and value for “The People’s Network.”
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. Please conduct your own due diligence before making any investment decisions.