Helium (HNT) is building the world’s first wireless peer-to-peer network for the Internet of Things (IoT). What does that mean and how can investors benefit from it?
Everyone is talking about the Internet of Things and more and more machines are communicating with each other worldwide. Be it the rubbish bin that asks you to empty it by radio, the e-scooter that provides information on the way as to whether its battery is still working or the air conditioning system that automatically adapts to the real weather conditions: everything should be networked, everywhere, anytime and that of course, as inexpensively as possible.
Global IoT industry revenue was $ 110 billion in 2017 . Forecasts assume that this value will increase to around 1.6 trillion US dollars by 2025 .
Almost all IoT devices need to be constantly connected to the internet. However, current solutions such as mobile communications, WiFi and Bluetooth are suboptimal and the 5G network is also struggling with problems. This is because these technologies are often too expensive, too power-hungry or too limited in their range. The crypto project Helium wants to tackle exactly this problem.
What is the Helium Network?
Helium is a decentralized blockchain network for IoT devices. The project was founded in 2013 by Amir Haleem, Shawn Fanning and Sean Carey . The Helium team aims to build a wireless IoT network that will enable devices around the world to connect wirelessly to the internet without the need for power-hungry GPS hardware or expensive cellular plans.
The HNT token is at the heart of Helium’s decentralized blockchain network. This can be used for payments and in governance votes within the network. As a result, Helium has created a two-sided market for vendors and users who need Internet for their IoT devices. The project wants to completely decentralize such a market that is currently controlled by monopolies.
Wireless Internet connectivity is set to become a competitively fueled commodity, available anywhere in the world at a fraction of the current cost. In this ambitious mission, Helium is supported by well-known venture capital firms, including Khosla Ventures, FirstMark Capital, GV (formerly Google Ventures), HSB/MunichRe Ventures and others.
How does the helium network work?
Helium uses the existing internet and builds a decentralized network for IoT devices on top of it. Anyone can join this network. Users can easily set up a Helium mini router in their own home and make Internet available for other IoT devices. Verified IoT devices can then access the connections, for example, or data that is of interest to certain groups can be tracked. For example, Lime ‘s e-scooters, which are also Helium’s partners, can access these hotspots to save costs.
The entire system behind it is very open, since anyone can participate in this network. Both end users and companies can buy HNT hotspots and operate them independently. In addition, blockchain technology and a new consensus algorithm called proof-of-coverage should be used to guarantee that both provider and user data are secure .
In addition, the proof-of-coverage algorithm makes it possible to verify at any time where a hotspot is located in the physical world and whether its data can be trusted.
In addition, each Helium hotspot has a so-called Long Range Wide Area Network (LoRaWAN), which has a range that is almost 200 times greater than that of an average WLAN router. The various IoT devices can therefore connect to the networks inexpensively and without a WLAN or SIM card. In addition, the connection via LoRaWAN should be more energy-efficient than via WLAN.
At the beginning of 2021 there were almost 15,000 helium hotspots worldwide. There are now over 536,000 helium hotspots distributed around the globe.
Especially in the last few months, helium has experienced enormous hype in the USA, Europe and China, which is also reflected in the HNT price. At the beginning of January 2021, HNT was still trading at $1.27. A single HNT token now costs $27.35 (as of February 1, 2022) – and still significantly less than the previous high of $55.22 that the token of the Helium network reached in November last year scored
How to earn HNT tokens
The Helium network rewards all those who make Internet available for IoT devices via a so-called Helium hotspot with HNT tokens. These hotspots are physical devices required for mining and transferring data on the HNT network. But why is the HNT token valuable at all?
The HNT token is required to conduct transactions on the Helium network. In addition, companies that want to use the data from hotspots must buy HNT and then destroy it. This reduces the total offer of all HNT and in return the companies receive so-called data credits. You can use this to pay for access to data.
There are currently five different Hotspot models listed on the Helium store , ranging in price from $410 to $577. These hotspots are available in both indoor and outdoor models.
However, the models are so popular at the moment that manufacturers have not been able to keep up with demand since the beginning of April. It can therefore take three to four months to get your helium hotspot delivered. If you don’t want to wait that long, you can try your luck on Ebay . However, the various devices sell for several thousand euros there. But you don’t necessarily have to spend so much money to share in the hype, because there are now rental options for the devices.
Helium mining can be extremely profitable
Making money from helium hotspots can be extremely profitable. However, how much you can earn depends on where you position your helium hotspot. On the one hand, it is important to be within range of other hotspots.
On the other hand, it is also important not to be surrounded by too many hotspots. Compared to the USA, there is still great potential for growth, especially in Germany and the rest of Europe.
Currently, the best places are urban areas, although the largest cities have already passed their greatest potential. Each hotspot has a range of around 15 kilometers. However, this can be expanded by placing the hotspot higher or by installing an antenna. Nevertheless, it doesn’t hurt to be the first in your area to set up a hotspot. That’s because you can dramatically increase your earnings over a short period of time by adding more hotspots in the same area.
Helium mining can currently be extremely profitable, especially in smaller towns where there are not too few but also not too many helium miners.
A helium miner in Berlin-Mitte was able to generate between 2,000 and 3,000 US dollars a month in income for its owners last year . In the meantime, such earnings are no longer possible in the federal capital – between 50 and 150 US dollars are currently possible, as we have verified in a random sample. With a hotspot in such a position, it would currently no longer be possible to get your entire investment back within a month.
If you want to find out how profitable helium mining can be in the respective regions, you should take a look at the helium explorer map . On this map you can see in which areas there are already helium hotspots and, after selecting the individual hotspot, you can display details about its income.
Helium grew very slowly after its launch, but now the network effect seems to be causing the project to grow exponentially. From around 7,000 hotspots in August 2020, the Helium network has grown to over 30,000 hotspots by early May 2021 and to over 500,000 hotspots by February 2022. However, the enormous growth of the past few weeks and months has left its mark: Today, in most regions where a great deal of money could be earned within a short period of time, it is no longer possible to earn back one’s investment directly.
However, Helium’s technology appears to be working and it’s likely that the number of hotspots will continue to increase. Overall, Helium is therefore a project that still has a lot of potential and could significantly help the growth of the IoT industry worldwide.
Nevertheless, it must be noted that the bottlenecks at the hotspot suppliers and the resulting sharp rise in acquisition costs are categorically ruling out many small investors at the moment. In addition, it is still unclear how secure the Helium Hotspot network really is. There are still many unanswered questions about data protection.