What is the Helium Blockchain Network?
Helium is a blockchain-powered project focused on building an alternative connectivity network. Its mission is focused on creating a decentralized, alternative, and cost-effective network for IOT communication. Helium’s aim is to have people owning the network rather than a single, or small set of corporations. Currently, over 20,000 people worldwide have installed a Helium miner in their homes and or businesses.
The Internet Of Things (IOT), is about to supercharge connectivity between smart devices all around the world. The ability for devices to communicate is what really makes them smart devices. While many devices have the capability to function as a smart device, there is still an issue when it comes to seamlessly creating cheap connectivity.
Helium believes in building an open-source, decentralized blockchain network in order to compete with the traditional connectivity sector.
To do that, Helium utilizes an innovative proof-of-work model which they call “Proof of Coverage”, which allows a low-cost way for the network to be secure. At the same time, the proof-of-coverage model incentivizes true decentralization.
How Can You Mine Helium?
The Helium network will reward HNT token to miners who are providing hotspots by installing a Helium enabled miner at their homes. These hotspots are based on Long range WIFI (LONGFI). You can buy such a dedicated miner at Helium.com, or you can create your own. Currently a Helium miner costs around 250 USD.
This 250 dollar LongFi miner is the first third party created miner. It is being sold by RAKwireless and Cal-Chip Connected Devices.
By providing a Helium LongFi hotspot you are helping the network to provide miles of wireless connectivity coverage which can be used for IOT communication between smart devices. The Helium Blockchain network is rewarding its hotspot miners with Helium (HNT) tokens as compensation for the Helium hotspot they are providing.
Helium calls its network the Peoples Network. Their model is geared towards building on an open-source blockchain model, in which people who are participating in creating connectivity through their Helium hotspot miner, are essentially owners of the network.
At first glance, there seems to be something poetic about the change of culture we are witnessing when observing decentralization. It’s almost still inimaginable to think that such an infrastructure intensive business model could be democratised by using a decentralised model in which regular people actually become beneficiaries.
The proof-of-coverage & with this, proof-of-location model is very interesting as it seems that this will avoid creating this trend towards creating ‘mega’ miners who are outcompeting the little guy.
HNT and Data Credits?
The Helium network is using two different tokens within its token model. HNT and Data Credits.
Hotspots can earn HNT not only for providing coverage to the Helium Blockchain network, but also for the amount of data that is being transferred by IOT devices over the Helium LongFi hotspot.
The POC or proof of coverage algorithm will autonomously prove that the Helium network miner is actually there, and providing network bandwidth for the IOT devices.
Helium ‘Data Credits’ come at a fixed price. In the economic model of the Helium blockchain, these Data Credits are needed by the smart devices to communicate with each other.
In order to create DataCredits, HNT tokens have to be burned. This burning mechanism ensures that the HNT token inflation is countered through the burning process of the HNT tokens every time Data Credits are being created. This way, as more data is being transferred over the Helium blockchain network, less HNT will become available.
Helium - Final thoughts
In our opinion, Helium’s idea perfectly fits a growing trend towards decentralising technology and putting it in the hands of users. Look at Bitcoin! Bitcoin provides individuals worldwide the opportunity to be part of a new money network. The trend seems clear. Over time all kinds of networks will decentralise into the hands of their users.
Whether Helium’s decentralised network will scale sufficiently, become economically viable, and be able to compete with other decentralised and centralised players, is not yet known.
Having said that, we really encourage the ideas behind it, as we believe that decentralised autonomous or semi-autonomous networks are the future.