Cryptocurrencies are very exciting. Yes, they can increase in value in a very short time just the same way they can lose that value in the blink of an eye. However, the overall price performance and market behavior of cryptocurrencies tells us they are here to stay.
One question that does haunt every cryptocurrency from Bitcoin to the latest crypto is – what does it do? For Bitcoin and a few other cryptocurrencies, their use case is simple to understand. It mostly has to do with money. Either the crypto acts as a currency or a network for making payments and building decentralized apps. For this reason, it’s clear to see that very few blockchains are unique in what they do and so most of the hype around cryptocurrencies comes from traders.
Now, what if I told you there was a project with a unique function? One that doesn’t have to do with market hype and bullish/bearish runs? I know what you are thinking. That sounds like a cryptocurrency with a rare use case.
What is Helium Network?
Helium is a decentralized network that caters to connecting millions of users around the world in an internet community where data-sharing is made faster and easier. Helium allows low-powered wireless computers and phones to act as nodes that will participate in the internet sharing process. Helium is also known as the Internet of Things.
Unlike traditional blockchains, Helium’s nodes comprise Hot spots which are made up of wireless gateways combined with crypto mining devices. Users who act as network participants mine and earn rewards while expanding the network. This makes Helium one of the few blockchains whose main function is not governed by market volatility. Helium seems a great investment because many expect demand for the network to keep growing especially as global internet use keeps increasing.
Helium network says it aims to create an Internet of Things communication for users around the world. Helium aims to close the gaps in internet infrastructure in many small and developing nations by allowing people to turn their computers and phones into internet-sharing hotspots.
With Helium, it is easier for several computers around the world to be connected at once. This makes data sharing easier, especially in small and developing nations.
Imagine a world with self-driving cars where all vehicles would have to be connected at once. Traditional wifi won’t be sufficient because of the lack of adequate coverage.
With the Helium network, millions around the globe can simply contribute internet data to be used by self-driving cars. They would also get to earn money in the process making it a win-win that incentivizes users to keep contributing to the network. Already, this kind of application of the Helium network is in place. Ride-sharing companies have used Helium’s decentralized internet for services like bike and car tracking. The best part is that these companies can better operate in small, developing countries where internet is usually an issue. Now, let’s look at some of the minds behind Helium
Who сreated Helium network?
In 2013, three individuals met with one aim – to create a decentralized internet sharing network. Their names were Amir Haleem, Sean Carey, and Shawn Fanning. Shawn Fanning was the developer behind the music-sharing service known as Napster. Napster was one of the pioneer peer-to-peer internet services and it was launched in the late 1990s. Sean Cary worked with Where, an advertising firm that was bought up by PayPal.
Amir Haleem worked in the electronic sports industry and he had a background in game development.
At first, Helium was built without cryptocurrency. The founders wanted to build long-range networks that would allow peer-to-peer sharing of data services. While the idea was good enough, they struggled to find participants and the network’s progress slowed.
Later on, the founders were convinced that they would be able to get more users if people could earn money for sharing their internet. After brainstorming for a while, they agreed that adding an incentive model where users would earn cryptocurrency was the way to go. They also decided to make Helium decentralized by allowing people to build upon the network and also connect their hotspots. Users would also be allowed to vote on proposed changes, and whenever prices rose, users would earn more, thus incentivizing them to open more hotspots. By 2019, the Helium network was launched alongside the new changes.
How Does Helium Network work?
Helium is like any other blockchain – it relies on network nodes that are plug-and-play devices that can provide internet connectivity 200 times stronger than regular wi-fi. Hotspots rely on Helium LongFi which combines both the Helium blockchain and LoRaWAN wireless protocol. Hotspots are responsible for mining new blocks and are rewarded with HNT.
Hotspots provide internet that’s much cheaper than regular internet providers. Also, 50-100 hotspots are enough to provide internet coverage for a whole city. Users who want to become hotspots need to acquire a LoRaWAN compatible sensor and a helium console which will be3 used in onboarding their devices
So what consensus protocol does Helium blockchain use?
Helium relies on a consensus protocol called Proof of Coverage (PoC). Proof of coverage works by having nodes verify their location and the network coverage being created from that location. Proof of coverage relies on using radio frequency to provide proofs that the network can verify. Radiofrequency has limited physical propagation and distance. Radiofrequency also travels at light speed with no latency. Helium is constantly verifying hotspots through something called a Proof of coverage challenge (PoC).
As some of you know, a consensus protocol is how a network confirms what transactions are valid on the blockchain. The most common consensus protocols are Proof of work which involves solving complex equations and proof of stake which involves staking tokens in exchange for the right to validate transactions.
The Helium consensus protocol combines proof of coverage and HoneyBadgerBFT multi-party consensus protocol.
Helium also allows staking for HNT which allows users to act as validators in exchange for staking 10,000 HNT. This allows the network to scale its growth at a much faster pace while improving security and efficiency.
HNT tokenomics
Helium network token (HNT) has a total supply of 223 million coins. It was launched without a pre-mine which was supposed to create an even market distribution of the token.
Every minute, a new helium block is created and miners are rewared with new HNT. However, every two years, HNT undergoes halving which is a process that halves the rate at which new coins are minted. Halving usually leads to a price increase so long demand for the token remains high.
The helium network also relies on Data Credits. Data credits are used by nodes to send internet data to the network. Users who intend to use data on the Helium network have to pay for network access via data credits. Data credits have a fixed value of $0.00001. Their value can’t be changed. Also, they can’t be transferred from one user to another. Data credits are gotten by burning HNT tokens. This establishes a balance where the network grows increasing demand for data credits which leads to more burning of HNT coins. This rinse and repeat process contributes to the market performance of HNT.
What Makes Helium Network standout
The helium network stands out as one of the only blockchains whose main use case has nothing to do with trading. As some of you know, one of the main problems faced by blockchains is the lack of a known use case. Most blockchains have a utility that has something to do with trading. Either the coin functions as a currency or a trading or lending platform. Even NFTs are valuable because of trading. Unfortunately, many have pointed to blockchains without a real-world use case as an issue. Blockchains whose use cases revolve around trading are often handled with care thanks to high market volatility. These reasons have greatly limited global adoption of blockchain technology.
Helium network has a use case that doesn’t rely on the behavior of financial markets. Helium acts like a bridge that allows users to access internet services via the bridge. It also allows users to contribute to that bridge via contributing internet data to the network.
Helium network makes internet services cheaper as users have to pay less when using Helium, unlike traditional internet services. Helium network also doesn’t come with internet restrictions and fees like data limits and overage charges. Users also don’t need to purchase extra internet hardware like sim cards.
Helium network is a great option for places where quality internet access is limited. For instance, people in developing economies can skip traditional internet services which are usually expensive, and go for cheaper options via the Helium network.
Helium’s Development so far
As part of its plans to dominate the Internet of Things (IoT) space, Helium is looking to connect billions of users around the world. As of August 2022, there are more than 500,000 helium hotspots around the world and thousands of new hotspots are added every day. The network’s expansion has given rise to new business partnerships with players from different sectors including staking service providers, app developers, and internet companies. With the addition of 5G technology, it is reasonably expected that Helium will grow exponentially in the next few years. Also, thanks to the newly added staking, the network will scale faster.
Helium recently announced that it was considering moving over its operations to the Solana blockchain. The company announced that its consensus protocol was struggling to meet demand for network services. The company behind the network has also proposed moving over all Helium tokens including HNT, Data Credits (DC) and MOBILE tokens to Solana. It is expected that Solana’s blockchain would be able to handle the increased number of transactions while keeping network fees very affordable for Helium users. The Helium network is also proposing a shift away from Proof of coverage which has been unable to meet network demand. Voting on the network changes will take place between the 12th and 18th of September.
Helium is a decentralized internet sharing network that rewards its participant nodes with crypto for sharing their internet. Helium works by allowing users to connect wireless devices. The network caters to people who also want to use data services contributed by others.
Helium is a blockchain like others. However, its use case is not the only thing that makes it stand out. Helium uses a relatively unknown consensus protocol called Proof of coverage. Proof of coverage involves having the network continuously verify the location as well as the authenticity of the internet being provided by a hotspot.
Helium has more than a million hotspots around the world despite only launching in 2019. This proves the unique nature of helium’s use case. Using the network and earning with it requires no risk at all so long as a person is mining blocks via becoming a hotspot and sharing their internet.
Helium’s native token is HNT and users who become hot spots earn HNT for their services. New block rewards started at 5 million HNT per month, however, it undergoes a halving every two years. Helium also uses Data credits for other on-chain services like sending data to users, and payment for network access by users. Data credits have a fixed value, and they cannot be transferred between users.
Helium’s data sharing services are very important in areas where data services are expensive and difficult to access.