- Helium provides a communication network using hotspots that people install in their homes.
- As a hotspot owner you earn helium tokens – a cryptocurrency – for providing coverage.
- There are now about 5,000 hotspots in the world, providing full coverage in most major US cities.
- So far, the Helium network has been used for tagging/tracking devices and also smart water meters, among other applications.
What is the Helium Network?
The easiest way to think of Helium.com is as a communications network – just like for mobile phones, but with two key differences:
- There are no phone/internet masts providing coverage. Coverage is provided by regular people plugging a device (called a hotspot) into their standard internet router.
- Each hotspot can cover miles in distance. This is less than radio, but a lot longer than wifi.
People like you and me (yes, I did buy one) buy a hotspot, plug it in at home, and then are providing coverage to the network. At the time of writing, there are about 5,000 hotspots active in the world:
Why would you run a hotspot?
If you have a hotspot you get paid for providing coverage and also for transactions that happen on the network. Surprise surprise, you get paid in cryptocurrency – called Helium – worth around $1.25 at the time of writing.
I myself bought a hotspot for $349 back around October 2020 and have had it running since then. Right now, I’ve earned roughly 450 Helium tokens, so I’ve made about $600 by now providing coverage. If you’re interested, you can track how many tokens each hotspot is making at https://www.sitebot.com/helium/hotspots/. Some of these hotspots are making absolute coin (over 20,000 Helium tokens from one hotspot in Cambridge, MA that got in early on the platform) – particularly in places where there enough hotspots to communicate with a few others but not so many that the rewards start to get shared too much.
These high returns are temporary and will reduce as more people buy hotspots. Right now, hotspots seem to be back ordered as far as the end of March 2021 or later.
Furthermore, much of the Helium tokens being earned are due to what is called “Emissions” – the euphemism for printing money! Like Bitcoin, there is a specific schedule during which Helium (HNT) tokens are minted over time and given to those who provide coverage. Over time this reduces, and hotspot owners become more reliant on users of the network paying them for transactions. Which brings us to the next important question:
Why would anyone use the Helium network?
The Helium network is low bandwidth, which means you can use it to send something like a text message, but not video content. This makes the network good for small devices that need to be low cost and use low amounts of battery. The best example is tracking devices (could be for lost items, or dogs) or passive devices like weather stations or water flow meters – particularly those at a low price point that need to run on very low battery.
Many of you may know Tile.com – a trackable tag you can put on anything and then find using Bluetooth. Well, Helium have developed their own device called Helium Tabs, which is basically the same thing, but not limited by bluetooth. Looks pretty good on paper (I haven’t tried them):
Is the Future Bright for Helium?
The Amazon Risk
The biggest risk I see with Helium is someone like Amazon competing with them. How? Amazon already sells doorbells and Alexa devices to homes that are connected to internet. Simply by adding additional frequency bands to the hardware, Amazon could very quickly build a network across pretty much all cities in the world… Amazon is already doing this in a way via their Sidewalk program.
Why would Helium succeed?
Helium founders (e.g. Amir Haleem – an eSports guru, Sean Fanning – Napster founder, and Sean Carey) and investors (Khosla, Google Ventures) are experienced, so that’s a plus.
The other angle Helium is pushing is the decentralised or “The People’s Network” benefit over Amazon (where Amazon would control it’s hotspots, even if it’s your device). There are a few points worth noting on this:
- It is always a delicate balance between allowing a network to be decentralised and also being a for profit business involved in that business. Facebook had a challenge building the Libra cryptocurrency, where it tried to set up a quasi-autonomous governing body.
- There is a risk that companies will start to buy up networks of Helium hotspots. There are chat groups already about putting together larger and wider spanning hotspots. Ensuring incentives are aligned towards growth and sustenance of the network is challenging.
All of this said, I am glad that Helium are doing what they are. It is a very interesting example of a network, and of using a decentralised and crypto approach to running the network. I’ll certainly be hodling my helium tokens and keeping my hotspot running.
Parting Questions to Keep in Mind
- How will Helium Tabs perform versus Tile?
- What impact will Amazon sidewalk (or similar) have on Helium?
- How will the price of Helium tokens evolve over time (so far, it has been reasonably steady)?
- Will hotspot ownership continue to be distributed or will it get concentrated into the hands of fewer people/groups?
P.S. www.Fleetspace.com is also worth a read and they combine low power wide area communication with a satellite approach.
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