Helium is a wireless network that is powered by crypto. The network seems to hint at the practical promise of implementing decentralized services.
In recent years, the most critical and repetitive question asked by crypto skeptics is: What can one do with cryptocurrencies, apart from crimes and financial speculations?
In most cases, this has been a tough question to answer, partly because a majority of the successful and legal uses of crypto so far have been seen in the financial or finance-adjacent fields. There are many crypto exchanges, nonfungible token (NFT) trading platforms, and video games that involve the trading, buying, and selling of crypto tokens.
However, not many of the active crypto projects have had a “normie utility” that would solve the issues that exist for people outside the crypto space. No project has solutions for people who are not just buying or selling digital assets. Crypto is yet to offer a solution to challenges that would be impossible to resolve using the normal, non-crypto technology.
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But, one project is keen to change all that. Helium has helped many to understand how crypto can be useful in solving a variety of problems. The project might not be popular for now since it is not the most attention-grabbing crypto project and it does not come with any cartoon apes or copies of the Constitution.
On the ground level, Helium is described as a decentralized wireless network for the “internet of things” devices, and it is powered by cryptocurrency. This network is made up of devices known as Helium hot spots, which are gadgets that come with antennas that send small amounts of data over long distances using radio frequencies.
The hot spots that cost nearly $500 apiece may reach 200 times further than the conventional Wi-Fi hot spots. They share the owner’s bandwidth with nearby internet-connected gadgets, like air-quality sensors, parking meters, and smart kitchen appliances.
Anybody can use the Helium network, though most of its users, for now, are firms like Victor Mousetrap Company that uses it for a new line of internet-connected traps and Lime that has used Helium to track its connected scooters. Over 500,000 Helium hot spots are in use throughout the world, with thousands getting added to the network daily.
How Helium Works
Apart from transmitting data, Helium hot spots reward their owners for participating in the network by developing various units of crypto known as $HNT. That is where the cryptocurrency part comes in. the $HNT tokens can be purchased or sold on the open market just like any other crypto, and the more a hot spot is utilized, the more $HNT tokens it generates.
Helium was launched in 2013. Nonetheless, it did not start as a crypto firm. The founders originally attempted to create a long-range peer-to-peer wireless network traditionally. They tried to persuade people and institutions to create hot spots and string them together. As was expected, they struggled to get enough participants, and their project stalled.
Helium’s chief operating officer, Frank Mong, said that the firm was running out of cash in 2017. Then, one engineer suggested during an all-hands Scotch-drinking session that more users may be willing to set up hot spots in case they could get a chance to earn crypto while doing it. Mr. Mong stated:
“That incentive model, powered by crypto, actually made sense in this case.”
From there, the firm tore up its old business model and then settled for a new one. Instead of creating the network itself, Helium might make it fully decentralized and enable users to build the network themselves by purchasing and connecting their customized hot spots.
Participants would be compensated with crypto tokens and they would be allowed to vote on proposed ideas for changes to the network. In case the price of these tokens surged, they would make more money and even set up more hot spots.
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The new model was released in 2019 and worked like a charm. The crypto fans rushed to set up Helium hot spots and begin generating crypto tokens. They then traded tips on YouTube and Reddit for increasing the range of their hot spots, by attaching them to tall buildings and even putting antennas on their roofs.
Several of the hot spot owners claim to have made thousands of dollars every month this way. However, their earnings have dropped as more hot spots have been added to the Helium network.
Thus, it shows that cryptos have powers in real-life use cases. They can help in kick-starting projects by offering an incentive to get in from the ground floor of investment and upward. Not everything would be improved by attaching itself to a crypto mining scheme.
But in the case of Helium, cryptocurrency made some sense as a means of encouraging users to participate and give the hot spot owners the satisfaction of creating something incredible that they owned.
One computer programmer in Philadelphia, Arman Dezfuli-Arjomandi, hosts a podcast about Helium. He said that the network’s decentralization was the largest selling point. He stated:
“If this network was built on some centralized platform, there’s always the chance that the platform I.P.O.s or they get acquired, and suddenly this whole physical infrastructure that was built by loads of people is at the whims of whichever company owns it.”
There is a lot to like about Helium. Unlike most crypto projects, Helium has become a real product that is used by real institutions, companies, and people daily. The people that are involved in this trade are not mere speculators, and most of them appear to be genuinely interested in the development of a decentralized wireless network.
A cardinal rule of the 140,000-member Discord chat Helium community is that one is prohibited from discussing the token prices. It is expected to become more successful in the coming months with new types of 5G hot spots making it possible to send data over the network at higher speeds.
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Helium’s blockchain is secured using a ‘proof of coverage algorithm that needs significantly less energy compared with the “proof of work” algorithms used by Bitcoin and other cryptos. Hence, it is considerably less harmful to the environment. According to the Helium team, their hot spots use nearly the same amount of energy as a 5-watt light bulb.
Helium Normie-Utility Test
Does Helium solve a non-crypto problem? Yes. There are millions of linked devices in the world, and connecting the devices to the Helium network is considerably cheaper than purchasing a cellular data plan for every device. Due to the hot spots’ long-range, the Helium network can also reach many places that normally Wi-Fi and cellular networks do not.
Is it useful for something else apart from speculation? Yes. Helium’s network in itself has value and though the hot spot owners can profit when the $HNT price surges, the main way of making money is by adding new hot spots and not by day-trading the $HNT tokens on crypto exchanges.
Can Helium work without crypto technology? Not really. The firm had previously tried the non-crypto strategy, and it almost went bankrupt. By including tokens in their operations, they managed to resolve what technologists call the “cold start problem”. A cold start problem is a phenomenon where attracting the first participants and users to a new network is challenging since the network is not yet valuable.
Helium is not perfect. Just like most of the other projects, crypto exists in a regulatory gray area and the users may be in for shocks in case Washington decides to do a crackdown. Federal watchdogs have said that many of the crypto tokens qualify as securities, which might make Helium hot spot owners subject to all types of controversial and complex securities laws.
For now, most of these hot spots are in high-density cities, which makes them less useful to people in most remote areas. Installing a Helium hot spot at home may technically violate your internet service provider’s terms of service because it involves reselling a segment of your bandwidth.
Terms of service for Comcast Xfinity subscribers, for instance, ban using your connection “for any purpose other than personal and non-commercial residential use.” For now, the internet service providers are yet to crack down on Helium users extensively, but all that might change soon.
Mr. Mong of Helium said:
“We are hopeful that the I.S.P.s are open-minded to exploring what Helium’s all about.”
Despite the limitations, Helium has majorly avoided the hype and inflated claims that surround most of the crypto projects. It is also not promising to change the commerce sector, deliver users from government censorship, or change the fabric of people’s daily lives. It has come as a useful piece of real-world network that is attached to a cryptocurrency-mining scheme that enables the entire project to work without a huge firm standing in the middle.
Helium miners are the size of a thick deck of cards and come with a long antenna on top. They generate a modest amount of $HNT, and if left running for several months, they can pay back the cost incurred to purchase the devices.
Participating in the Helium network is fulfilling since it helps the owner earn some money while enabling devices in their neighborhood to connect to a cheap internet connection.
Helium does not promise to make people rich off their tokens. But, not all crypto projects have to be lottery tickets in disguise. For some, being useful in the real world is enough.