By Rayna Ishihara | Crescent City Capital Market Analyst Intern
What is Helium
Helium is a blockchain-based network designed to connect IoT( Internet of Things) devices. It utilizes nodes called Hotspots to facilitate wireless communication between devices. Hotspots provide public network coverage using the LoRaWAN protocol, a media access control layer protocol. The network relies on a decentralized global network of Hotspots, which function as both network miners and wireless access points. By deploying Hotspots, individuals can earn HNT coins, the native token of Helium, in exchange for providing connectivity to devices. This decentralized and blockchain-based approach enables rapid scaling of wireless infrastructure at a lower cost compared to traditional models.
Helium operates on a unique model where each operator of a Hotspot owns and builds their own network, forming a decentralized network known as the People’s Network. It aims to establish the world’s first peer-to-peer wireless network specifically designed for IoT devices. By leveraging blockchain technology, Helium addresses privacy concerns associated with popular IoT hubs like Google and Amazon. The decentralized and blockchain-based approach ensures a more efficient and functional IoT ecosystem, offering improved privacy and connectivity for connected devices. Helium aims to overcome existing issues and provide adequate solutions for the future of IoT connectivity.
Helium was founded in 2013, emerged shortly after the introduction of Bitcoin, the pioneering cryptocurrency. Operating under the company Helium, Inc., it aimed to establish the world’s first global peer-to-peer wireless network capable of connecting diverse devices and forming the Internet of Things. The founders of Helium are Amir Haleem, Sean Carey, and Shawn Fanning. Through multiple funding rounds between 2015 and 2019, the project successfully raised over $53 million in investment.
What is IoT ( Internet of Things)
The Internet of Things (IoT) refers to a network of interconnected devices that exchange data with each other and the cloud. These devices, equipped with sensors and software, can range from machines to consumer objects. IoT enables organizations across various industries to enhance operational efficiency, deliver better customer service, make informed decisions, and increase business value. Unlike traditional interactions, IoT allows data transfer between devices without the need for human-to-human or human-to-computer interaction. In the IoT ecosystem, a “thing” can be any object, whether natural or man-made, that has an Internet Protocol address and can transmit data over a network.
While WiFi already supports IoT devices, ensuring compatibility with a wide range of devices raises privacy concerns. Helium addresses this challenge through a decentralized architecture and a consensus mechanism called Proof of Coverage, which offers significantly greater coverage for IoT compared to WiFi. The Proof of Coverage mechanism not only validates the locations of Hotspots in the network but also serves as the basis for distributing rewards to HNT holders and node operators.
The Proof of Coverage (PoC) consensus algorithm in Helium enables hotspot nodes to communicate through radio frequency and verifies their claimed locations using PoC Challenges. It is built on top of the Helium Consensus Protocol, which incorporates the HoneyBadgerBFT multi-party computation consensus protocol.
Participants deploy hotspots to earn mining rewards and contribute to the network’s growth. Unlike traditional mining rigs, Helium hotspots utilize radio wave technology, making them more energy-efficient. Hotspots undergo periodic cryptographic tests to prove their radio coverage, earning HNT rewards upon successful completion.Hotspots can also earn HNT by transferring data from nearby devices over the network. The more data a hotspot transfers, the more rewards it earns. The HNT rewards are distributed in proportion to the value contributed by hotspots through completing PoC challenges, acting as witnesses for peers, and transferring device data. Network data transfers receive the largest share of HNT rewards.
Helium Network Token (HNT) is the native cryptocurrency and protocol token of the Helium Network. It was first produced on July 29th, 2019, without any pre-mining. HNT fulfills the needs of two primary parties in the Helium ecosystem:
Hotspot Hosts and Operators: They are rewarded with network tokens (like IOT or MOBILE) for deploying and maintaining network coverage. These network tokens can be exchanged for HNT.
Enterprises and Developers: They utilize the Helium Network for device connectivity and IoT application development. Data Credits, which are utility tokens pegged to $USD and derived from HNT through burn transactions, are used to pay for wireless data transmission fees on the network.
HNT plays a critical role in incentivizing network participation and facilitating transactions within the Helium ecosystem, benefiting both hotspot hosts and operators, as well as enterprises and developers leveraging the network for IoT solutions.
The live HNT price on August 12th is $1.93 USD with a 24-hour trading volume of $1,969,947 USD. It has a circulating supply of 143,934,821 HNT tokens.
The price of Helium has fallen by 8.79% in the past 7 days. The price declined by 1.79% in the last 24 hours. In just the past hour, the price shrunk by 0.45%. Helium is 96.53% below the all time high $55.22.
The price movements and trading volume of HNT, like other tradable assets, are influenced by various factors. Notably, the listing of HNT on Binance in September 2020 led to a spike in trading volume and a significant price jump, as it introduced the cryptocurrency to a broader audience. Additionally, the overall market trends, particularly the surge in the crypto market early in 2021 driven by Bitcoin’s bull run, impacted HNT’s price.
The price trend of HNT follows a boom-and-bust cycle, which is a common pattern observed in various markets, including cryptocurrencies. In this cycle, there is an initial phase of growing excitement and optimism among investors, which drives the price of the asset, in this case, HNT, to surge significantly. This phase is often fueled by factors such as positive news, market developments, or listing on major exchanges.
However, as the market becomes saturated or speculative buying increases, doubts and disillusionment start to set in. This can be due to various reasons, such as overvaluation, lack of sustained growth, or market corrections. These factors can lead to a decline in investor confidence and trigger a crash or significant price correction.
Helium is a company that has built a decentralized peer-to-peer wireless network called the People’s Network for IoT devices. It was founded in 2013 and aims to address the privacy concerns and inefficiencies in the IoT sector. Helium utilizes a unique model where individual operators own and build their own network nodes called Hotspots. These Hotspots connect devices to the Helium network, enabling secure and efficient IoT connectivity.
Helium’s network operates on a consensus mechanism called Proof of Coverage (PoC), which verifies the claimed locations of Hotspots and rewards participants with Helium Network Tokens (HNT). The decentralized architecture and blockchain technology used by Helium provide improved privacy and connectivity for IoT devices, overcoming the limitations of centralized IoT hubs.
By leveraging radio frequency technology, Helium Hotspots contribute to network coverage and earn HNT rewards by completing PoC challenges and transferring data. HNT serves as the native cryptocurrency and protocol token of the Helium Network, facilitating transactions and incentivizing network participation.
Overall, Helium aims to revolutionize IoT connectivity by creating a decentralized, privacy-focused, and incentivized network that empowers individuals and businesses to build a more efficient and functional IoT ecosystem.