Helium Network (HNT): Decentralizing Wireless Networks
A new blockchain-based incentive model for building the largest decentralized wireless network in the world
By Amir Haleem, CEO & Co-Founder, Helium
Updated October 16, 2023 • 4 min read
Helium is a blockchain network that leverages a decentralized global network of Hotspots — devices that double as network miners and wireless access points — initially to provide long-range connectivity to Internet of Things (IoT) devices, and long-term to connect anything to the internet via a decentralized wireless network such as 5G. Hotspots can be deployed by anyone and enable individuals to earn Helium’s native HNT coins in exchange for providing devices with connectivity. This decentralized, blockchain-based approach allows wireless infrastructure to scale more rapidly and at a fraction of the cost of traditional models.
Introduction to the Helium Network
Launched in July 2019, Helium is an open-source blockchain network designed to power Internet of Things (IoT) devices with wireless connectivity. In an effort to build a global, ubiquitous wireless network, individuals are incentivized to host Hotspots — nodes that simultaneously mine HNT for building and securing the Network, while providing connectivity to nearby devices.
With a growing network of Helium Hotspots around the world, developers and businesses are able to affordably connect a new class of IoT devices that would otherwise be impossible, from remote wildfire or environmental sensors to smart pet collars, scooters, and bikes being tracked across any city.
A Network of Helium Hotspots
Hotspots are plug-and-play wireless devices that provide connectivity 200 times farther than Wi-Fi with Helium LongFi, the combination of the LoRaWAN wireless protocol and the Helium blockchain. Hotspots also act as miners on the Helium blockchain, incentivizing anyone to deploy a Hotspot and earn HNT for building the network and transferring device data at a fraction of the cost compared to cellular. Only 50-100 Hotspots are needed to provide coverage for an entire city.
A variety of Helium Hotspots are available through third-party manufacturers that have been approved by the Helium Community. Demand for Hotspots has been remarkably high, paralleling the rapid global growth of the Helium crypto community and the ecosystem of developers building applications to utilize the Network.
Why would someone want to use the Helium Network versus their traditional internet provider? As an inherently decentralized network, Helium is fully encrypted and provides a high degree of security and ubiquitous internet access at a fraction of the cost of traditional cellular data. Users only pay based on actual data usage. The Helium crypto protocol also does not come saddled with the accompanying restrictions and fees that a cellular provider might impose — like data caps or overage charges — and doesn’t require users to purchase additional hardware like a SIM card. To start using the Helium Network, a user simply has to choose any LoRaWAN-compatible sensor, and onboard their devices using the Helium Console.
Helium Network’s Proof of Coverage
The Helium Network uses Proof of Coverage (PoC), a novel work algorithm that rewards users for verifying coverage, thus proving location and network connectivity. Proof of Coverage is built on top of the Helium Consensus Protocol, which incorporates the HoneyBadgerBFT multi-party computation consensus protocol.
Participants deploy Hotspots to participate in building the Network and earn Helium mining rewards through a novel incentive model powered by the Helium blockchain. The Helium Network’s implementation of mining is carried out by means of radio wave technology rather than traditional mining rigs like GPUs or ASICs, making Hotspots much less energy-intensive than their traditional counterparts.
Hotspots are occasionally given tests to cryptographically prove that they are indeed providing radio coverage in a particular place and a particular time. These tests are assigned randomly and automatically, and passing them earns a Hotspot operator HNT rewards.
Helium Hotspots can also earn HNT by transferring data from nearby devices over the Network. The more data transferred, the more rewards earned.
Hotspots earn HNT in proportion to the value they contribute to the Helium crypto ecosystem by completing PoC challenges, serving as witnesses for peers’ performance, and transferring device data, with the largest volume of HNT rewards going towards network data transfers.
Cryptoeconomics: HNT Coins and Data Credits
Hotspot operators earn HNT for providing coverage and transferring data on the Network. As of June 2021, there are about 90 million HNT coins in circulation, with a maximum supply of 223 million HNT. The project initially launched with zero HNT in circulation and without a pre-mine, which was intended to create a more even distribution of HNT throughout the market.
New Helium blocks are produced every minute with HNT rewards distributed approximately every 30 blocks. HNT’s coin emissions rate began at five million HNT per month and halves every two years. On August 1, 2021, the issuance of HNT coins will be reduced to two and a half million HNT per month.
Also central to the cryptoeconomics of the Helium Network are Data Credits. Each device using the Helium Network is required to spend Data Credits to send its data to the internet, and users pay with Data Credits to access the Network. Data Credits are fixed in value, tied to individual users, and not transferable. One Data Credit is fixed at a value equivalent to $0.00001 USD. Data Credits are minted by burning HNT, establishing an equilibrium where, as the network grows and more devices use Data Credits, more HNT coins will be burnt.
Future of Helium Network
Helium is building a next-generation wireless network with the potential to connect billions of compatible devices all around the world. As of July 2021, the Network already hosts over 88,000 Helium Hotspots in more than 8,000 cities globally, and is adding the second major wireless network in the coming months, Helium 5G. In addition, Validators using a Proof-of-Stake model just launched on the Helium blockchain to further secure and scale the Network.
Beyond the growth of Hotspots, the Helium ecosystem is scaling quickly and includes an array of hardware and software solutions. This growing community brings together Hotspot manufacturers, IoT businesses and applications, developers, staking providers, and more. The Helium Network also includes a number of new businesses, such as D-Web Technologies, who are expanding the Helium crypto ecosystem by deploying Hotspots and implementing sensor solutions for leading businesses across industries.
The Helium Network is making incredible headway in tackling the challenge of IoT connectivity as the number of IoT devices increases exponentially, and serves as a blueprint for how all wireless infrastructure of the future can be built.
Cryptopedia does not guarantee the reliability of the Site content and shall not be held liable for any errors, omissions, or inaccuracies. The opinions and views expressed in any Cryptopedia article are solely those of the author(s) and do not reflect the opinions of Gemini or its management. The information provided on the Site is for informational purposes only, and it does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. A qualified professional should be consulted prior to making financial decisions. Please visit our Cryptopedia Site Policy to learn more.
CEO & Co-Founder, Helium
Amir Haleem is the CEO & co-founder of Helium. Prior to Helium, Amir served a long career in the video game industry as CTO at gaming startup Diversion. He was also a member of the original team behind Battlefield 1942 at DICE in Stockholm, Sweden. Outside of work, Amir is a former world champion esports gamer, co-founder of the popular esports community esreality.com, and builds and races 90s Japanese sports cars.
Is this article helpful?