HELIUM MINING: POWERING IoT DEVICES AND 5G WITH BLOCKCHAIN TECHNOLOGY
The Helium network, popularly known as “The People’s Network”, is a decentralized network powered by thousands of hotspots (miners) that provide long-range wireless connection for Internet of things (IoT) devices.
These hotspots can be operated by anyone from anywhere around the globe. And as a reward for operating their hotspots, users get rewarded in HNT (Helium network Token), the Helium network’s own native coin. Helium logo
THE HELIUM NETWORK AND HOW IT WORKS
In 2013, Helium Inc. was founded by Shawn Fanning, Amir Haleem, and Sean Carey. Their goal was to create an affordable and efficient wireless network that beats existing traditional models by leveraging the power of blockchain technology.
They planned on doing this by handing over the task of providing and maintaining the necessary hardware needed for powering up the network, to the people. Users would get to set up nodes (Hotspots) that the network needs to operate.
Their idea failed at first, and the company was almost on the brink of collapse until it incentivized the whole process. With the new model, hotspot owners would get to earn HNT tokens (the network’s native token) as a means of reward for hosting and managing their hotspots.
With the introduction of incentives, Helium witnessed a turnaround, as thousands of people started purchasing hotspots, increasing the number of active nodes on the chain from 15,000 to over 600,000 in a matter of months.
The Helium network operates using proof-of-coverage (POC) algorithm. The algorithm confirms if hotspots are really providing network coverage for their various locations before going ahead to reward them for their services. The Proof of Coverage is built on the Helium Consensus Protocol which uses the HoneyBadgerBFT protocol.
MINING HNT TOKENS
HNT tokens are mined by hotspots that “Challenge” themselves by proving that they are really providing network coverage at their specified locations using the Proof of Coverage algorithm. After a challenge has been successfully completed, the “challenger”, “challenged”, and “witness” hotspots all get to share a portion of HNT tokens.
HNT has a maximum supply unit of 223 million. At launch, the Helium Network was mining 5 million HNT per month, but an approved community proposal brought about the value being halved every two (2) years. At the time of this writing, the network produces 2.5 million HNT per month. Next year, it’ll be producing half that amount per month. This will continue to go on until the maximum supply is reached.
Asides being a form of incentive for miners, HNT tokens can also be burnt so as to create data credits (DC). Data credits is another native token that is used as a payment for transaction and network fees. They give users the ability to use and transfer data on the Network. They are non-transferable and have a fixed price of $0.00001.
In other to mine HNT, you need to purchase a hotspot from a Helium-approved organization. In the past, users could mine using custom-made hotspots, but that practice has since been discontinued.
After purchasing the hotspot device, you have to connect the hotspot to the internet and sync to the network by making use of a WiFi or Ethernet. The hotspot begins to mine HNT after it has successfully been synced to the network.
HOW DO THE HOTSPOTS WORK?
Hotspots serve as channels through which IoT devices can connect to the Helium network. By combining technologies like LoRaWAN and LongFi, hotspots are able to provide wireless network coverage that span for miles. And it does this by making use of a low amount of energy.
LoRaWAN (Long-Range Wide-Area-Network) is a network architecture that was designed to operate with low-cost and low-power consumption. This means that it does not require a large infrastructure to operate and this is why it runs on small devices. Helium hotspots are incorporated with this technology which creates an avenue for users to incorporate their privately-run network with public wireless infrastructure. The LongFi is responsible for initiating the data transfer between the blockchain and LoRaWAN.
IS HELIUM MINING PROFITABLE
The profitability of Helium mining is mainly dependent on the price of the network’s token. As time goes by with more and more people joining the network, the amount of HNT a hotspot can mine will significantly reduce.
Of course, this reduction in mining power can be offset by a significant increase in the price of the HNT token, but this is cryptocurrency and nothing is certain.
Other factors that could also determine how profitable mining can be are; location, type of connection, antennas, etc. If you’re thinking on getting into Helium Mining, these are things you should definitely consider.
HELIUM 5G
For some years now, many have been hearing of 5G technology and the prospects of this new technology. But despite the exciting features of 5G, it still remains unpopular amongst the global audience.
The reason for this is mainly because the costs of setting up and maintaining 5G infrastructure is on the high side, and Telecom companies cannot really afford it at the moment.
When it started, Helium network’s sole purpose was to provide a cheaper alternative for IoT device owners to connect their devices to the internet, but Helium recently announced that it will be partnering with FreedomFi to provide 5G coverage for all kinds of devices.
Using the same model as before, Helium will allow users to mine cryptocurrency by providing 5G cellular coverage.
Details regarding this new concept are still limited but judging from the success they’ve enjoyed in the past, I think it’ll be safe to predict that this too might actually take to the skies and soar.
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