Helium: How the Internet of Things Goes Peer-to-Peer
In the 1980s, laptops and desktop computers became the first devices to massively use the internet. A few decades later, we started to go wireless: mobile devices connected to the web have become ubiquitous.
In the 2010s, a new trend was set: electric devices around us have become connected to the internet, too. This is called the Internet of Things (IoT): you can monitor, switch on and off, and configure gadgets, household items, and electric devices with a smartphone even from miles away.
The Helium network facilitates the connection of IoT devices to the internet with special software and hardware. Those who provide such connectivity earn rewards with HNT tokens. Let’s see what exactly the IoT is and how Helium drives its adoption by introducing a decentralized network of HNT miners.
The Internet of Things as our device assistant
The Internet of Things allows electronic devices to connect to the Internet and share their data and. This gives us an opportunity to analyze statistics of their usage and optimize it.
Let’s consider air conditioning. When it’s offline, you can only manage it manually: keep it on the whole day or start the cooldown when you return home. If the conditioner is connected to the IoT, you can control it in many ways, including remote options. Turn it on with your cell phone on your way home, save electricity, and enjoy walking into a cooled room.
The Internet of Things optimizes and facilitates the way we interact with devices of any type and size. An IoT car analyzes traffic and offers you the best route while keeping track of the engine performance. Your IoT smartwatch monitors your schedule, reminds you of business meetings, and alerts you of phone calls or received messages.
Why devices stare data, and how this helps us
Besides enhanced control features, IoT devices can find other similar gadgets around and share data with them. How and why do they do that?
There are two types of IoT appliances: general and sensing devices. The general ones are the smart gadgets at your home that are connected to the Internet via a cable or wirelessly. The sensing devices are the sensors installed on these units. They measure air temperature, humidity, time, light brightness, the general device’s state and performance.
The data that sensing devices collect is uploaded to cloud storage and then thoroughly analyzed. Useful outcomes of this analysis are then sent to the user via a smartphone app.
Here’s an example of how this can help you in real life. Let’s get back to the air conditioner: sensors installed on it measure its performance and health and send this data to the manufacturer. Whenever some mechanisms wear out, the producer will be aware of this and will notify you that repair is needed.
The Internet of Things helps us in our daily life, allowing us to focus on the things that matter. Today, there are about 50 billion IoT devices worldwide; this number is supposed to increase to 80 billion by 2025.
Helium goes live
In 2013, three developers Shawn Fanning, Amir Haleem, and Sean Carey got together to work on a promising idea: a wireless peer-to-peer network that would interconnect devices for the telecommunications market. A bit later, when the IoT trend became evident, they shifted their attention to building a 5G network that was called Helium.
In 2017, when the crypto market was surging to unprecedented highs, the team realized: it’s worth building an incentive model with a cryptocurrency at its core. By 2019, the HNT token was developed, and the Helium mainnet went live — a little after the first hotspot was sold.
How does Helium work?
At the core of Helium, there are hotspots — devices that resemble WiFi routers but in fact, have a different goal. Hotspots create a low-bandwidth internet connection that allows devices up to 100 km away to share data with each other. This technology called LongFi is the main competitive advantage of Helium: it’s much cheaper than the cellular connection that IoT has been using to date.
Anyone can buy a ready-made hotspot or create a new one using software kits prepared by Helium and available hardware. To date, there are 14 different brands of hotspots that can be used in the Helium network.
Hotspots mine the Helium (HNT) token, making it profitable for connectivity providers to offer their services. Thus, Helium is a network owned by people and made for people.
There are two sides to the Helium economy — supply and demand. On the supply side, there are hotspots incentivized by token mining. On the demand side, there are businesses and developers that get a cheap and robust way to connect their devices.
From scooter and pet tracking to environmental sensing and healthcare monitoring solutions, data packages are stored in the Helium console and can be used for multiple purposes. They are compatible with Google Drive, so data owners can access them with ease.
How can I earn with Helium?
Helium hotspots make money in two main ways:
- They mine HNT for transferring data from connected devices. The more data has been transferred, the higher the reward.
- They ensure network coverage and get rewarded. Helium leverages Proof of Coverage — a mechanism that helps the network make sure all devices are located where they claim they are and broadcast the LongFi signal. The check is performed by a random hotspot in your range. The rewards are paid both to those who check and those who are being checked. Today, there are over 425 thousand Helium hotspots worldwide, with 82,000 of them being created just during the last month.
To send data in the network, IoT devices in Helium use so-called data credits that have a fixed value. The HNT token is burned to create data credits and is minted to pay mining rewards to hotspot operators. Thus, there is an equilibrium in the network with some deflationary dominance. Just like Bitcoin, Helium makes its HNT token scarce by halving emission every 2 years.
If you don’t want to set up a hotspot but still want to profit in the Helium network, stake 10,000 HNT to become a validator. At the time of writing, there are almost 3,000 validators in the Helium network. To ensure maximum staking rewards, stay online as much as you can: validators who go offline are penalized with slashed block rewards.
Bottom line
Helium is a global network for the Internet of Things owned by people. It helps businesses and individuals create hotspots that distribute a LongFi signal — a means to connect IoT devices from miles away, and earn rewards for doing so in the network’s native asset HNT. This connection is way cheaper than the traditional cellular network and thus offers one of the best solutions for IoT.
The HNT token started this year at $1.35 and costs $38.7 by late December. Such price dynamics shows positive effects of the deflationary mechanisms inherent to Helium tokenomics and the rising global interest in promising and peer-to-peer solutions for the IoT. And as the segment of the Internet of Things grows, we are likely to see more solutions of this kind and the further surge of the Helium network.
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