helium & people powered networks🎈
My understanding of Helium and the growth of decentralized wireless infrastructure. 894 words.
In the next 5 years, 75 billion devices or things, will need a way to connect wirelessly to the internet. Most devices require wireless connections with IoT (think phones, refrigerators, light bulbs, washing machines, sprinklers, cars, cameras, etc.)
Right now, connecting things to the internet is relatively hard because cellular data is expensive and power prohibited.
Helium uses long-range wireless technology and blockchain for a network that can be built and used by anyone (even you).
Helium makes it easy to build on its network by getting a helium hotspot or building your own with open source software and easy to access hardware. Hot spots are unique because they supply a low bandwidth internet connection over a number of kilometres to a range of devices using something called longfi (an open-source wireless networking protocol for machines to send encrypted data over long distances)
For building the network and providing connectivity as a service, hotspots can mine HNT, a cryptocurrency on the Helium Blockchain.
Helium functions similarly to other sharing economies like Uber and Airbnb where wireless connectivity can be made both widely accessible and affordable by providing economically aligned incentives for miners.
Helium verifies hotspots through a proof of location mechanism so that when a hotspot is created, the miner is able to log its location. Other hotspots on the Helium network frequently ping each other to verify their location. The idea behind this is that hotspots being operated by different miners are unlikely to all be lying about being in the same area.
The Helium blockchain allows for a two-sided market. It provides economic incentives so that hotspot owners can build on the network and provide connectivity in exchange for earning HNT. People benefit from Helium with affordable and ubiquitous connectivity for IoT devices. Cool thread that summarizes Helium’s growth with numbers and other intresting facts and ideas 👇
The Helium network is decentralized and wireless. It is built around something known as WHIP (Helium’s wireless protocol that allows for data transfer between wireless devices and the internet).
There are three things that make this possible
(1) Devices pay to send & receive data to the Internet and geolocate themselves
(2) Miners earn tokens for providing network coverage
(3)Miners earn fees from transactions and of course for maintaining the integrity of the Helium network.
A TL;DR on how it works
Devices are hardware that contain a radio chip that is compatible with WHIP. Tokens are spent by paying miners to send data to and from the internet.
Miners accept tokens by providing coverage.
Miners join the network by staking a token deposit and verifying their location.
Miners can specify their price for data transport and proof of location services. Routers can do the same - set a price they are willing to pay for their device data.
Miners participate in the creation of new blocks on the Helium blockchain
Miners get tokens for blocks they create.
The blockchain has proof-of-coverage to ensure that miners are honestly representing their work.
So why does this matter? Helium’s growth has been crazy over the past year. Today, the Helium network has coverage in over 34,000 cities and 160 countries with more than 500,000 hotspots. A global IoT network like this has never existed before.
This kind of growth gives way to many new exciting applications for the future.
A few other cool things
Price predictions for HNT + tokeneconomics
Looking into Helium, most of the top search results were on the pricing of the HNT in the years to come. Read a thread recently on tokenomics and economic incentives when relating to companies in the crypto space and here are some thoughts I had from reading a few of them: Helium is still early from an adoption standpoint but I read a thread recently on the one or zero nature of Helium. If Helium works, then the market for it is large. Billions of dollars of IoT data are potentially open for transfer. Issues with any blockchain-based solution are speed and scalability and while Helium has mechanisms built into it to make data transfer and connection faster and more scalable, the data speed and reliability of the network may not be able to surpass a certain point. Either the network works (meaning it is ubiquitous, provides reliable data transmission, and is easily adopted by operators) or it doesn’t.
Helium proposed Helium DAOs a little while ago (a bit on why that’s exciting)
Each wireless network supported by Helium has its own subDAO with its own token (wireless network tokens or WNTs for short). According to the official proposal, “The key specifications of the WNT such as Proof-of-Coverage rules, data credits rewards, and consensus mechanisms are governed by each WNT DAO.”
The aim is to create an economy so that the HNT-Data Credit burn-and-mint equilibrium remains undisturbed which basically means growing supply at the same rate as the demand and vice versa.
The model for this plan means that the Helium Network lives at some proposed base layer (L1). All accounts and transaction activity happens at this layer. All subDAOs operate as economic and governance layers (L2) with their respective wireless network tokens working for this purpose. Each L2 also runs software to calculate things like the Proof-of-Coverage code to determine rewards. Helium DAOs could potentially allow for greater reliability in the future by improving connections between communities.
Read More 👇
Whitepaper
helium.com
Helium DAO
I’m trying to build a writing habit by writing here every day about things I learn in web3, blockchain, crypto, etc. If you find errors in my understanding or would just like to talk, it would be most appreciated if you’d reach out @_anyasingh
This is genuinely an amazing read and really insightful :)