- If you only have two minutes, here’s what investors, operators, and founders should know about Helium.
- Practical uses of cryptocurrencies. Helium is a rebuttal to the criticism that cryptocurrencies have no practical use. The company deploys and operates the world’s largest IoT network using token incentives.
- A new income opportunity. Users can earn “HNT” tokens by sharing Helium Hotspots in exchange for contributing to the network. While the rewards vary, some users’ hotspots may have made millions. Professional web3 implementation companies have emerged, and they are taking advantage of this opportunity.
- Utilize unlicensed spectrum. Traditional broadcasters and telecommunications companies rely on licensed spectrum. This was purchased from the FCC and promised uninterrupted connectivity. Projects like Helium use unlicensed bands that are noisier but less expensive.
- Growing opportunity and complexity. Although Helium’s webcast is extensive, it handles relatively little data. To bring more demand to the system, Helium is expanding beyond IoT. It wants to provide the infrastructure for 5G, WiFi, VPNs and other networks. While this is a considerable opportunity, every new network adds a lot of complexity.
- The “Cellular Summer” program is about to start in earnest. Helium’s quest to build a decentralized 5G network is expected to launch later this month. Participating hotspots will receive a new token – MOBILE.
Even if you’ve never heard of it, chances are you’ve interacted with Helium in the past. Launched in 2013, the decentralized wireless network has grown into “the world’s largest continuous wireless network,” according to founder Amir Haleem. Focused on serving the Internet of Things (IoT), Helium operates in 65,000 cities and 170 countries. With nearly a million Helium hotspots around the world, Helium is quietly connecting smart devices to the internet. A Lime scooter that you can ride near your location, a smart refrigerator that sells you more eggs, and a doorbell that tells you UPS has arrived may all rely on a connection to Helium. So do soil sensors, air pollution systems, and dozens of other gadgets and devices we interact with and rely on.
While Helium’s size is remarkable in itself, its infrastructure is its defining characteristic. Haleem’s project is built on the blockchain, which rewards those who keep the network secure with tokens to drive the deployment of hotspots. Owners of Helium hotspots not only contribute to the decentralization of internet access, but they earn “HNT” when their nodes in the network are used. This is one of cryptocurrency’s greatest achievements and a clear demonstration of its use.
Because Helium is too revolutionary, the project’s valuation has fallen from a high of about $12 billion in 2021 to $2.2 billion. But it still received a $200 million investment from Andreessen Horowitz and Tiger Global in February of this year.
Despite such strong market demand validation, Helium’s best results may not be here yet. Earlier this year, the company announced that it was entering the “second chapter” of its story. As part of the evolution, the company will move beyond IoT services starting with a 5G rollout this summer. Over time, Helium hopes to support WiFi, VPNs and other protocols. In this ambition, it seeks to become a true “network of networks”, coordinating systems to improve the lives of billions of people around the world and taking power away from centralized incumbents.
It’s a bold vision that brings real risk to it. Not all existing Helium users are happy with the introduction of 5G and the changes it brings to the existing reward structure. Managing multiple economies and sub-DAOs sounds very difficult on a dozen different levels. However, in the face of the $1.6 trillion global telecommunications market, the opportunity is worth the challenge.
Regardless of the outcome, Helium has already had an amazing impact, pioneering new business models for building infrastructure and demonstrating the utility of cryptocurrencies. We’ll explore these ideas in today’s article. We will also cover:
- origin. Founded in 2013 by Amir Haleem and Shawn Fanning, Helium went through several twists and turns before settling on the version we see today. This is a story about the courage and wisdom of entrepreneurs.
- product. Helium is a fusion of hardware, software, blockchain and decentralized governance. Managing so many people is no easy task.
- DeWi. Telecom is a huge market with only a few major players. It is also a department with close ties to the government. For these reasons, many believe that “decentralized wireless”/DeWi is necessary.
- A network of networks. After creating the largest IoT network in history, Helium has ambitions to support other networks, including WiFi, VPN, CDN and 5G. Doing so requires a fundamental redesign.
- Win the 5G war. Helium’s next test is the launch of a decentralized 5G network. This time, it faces competition from players such as Pollen Mobile (a decentralized mobile network).
Origin: The pragmatism of cryptocurrencies
Helium should not be a cryptocurrency company. Amir Haleem’s original vision involved no blockchain or tokens. Only after he and his team tried traditional methods to scale the network did not work, they decided to try cryptocurrency incentives. This is a true example of cryptocurrency pragmatism – using technology to achieve a specific purpose, a decentralized web would not be possible without cryptocurrency and decentralized blockchain technology.
Amir Haleem is a generation that grew up with computers, thanks to his father’s work at Commodore (an early PC maker). At the age of seven, Haleem wrote his first line of code in BASIC. “I’ve been with computers since I was a kid,” he said.
A passion for sports matches Haleem’s interest in technology. Had it not been for the injury, Haleem could have made his career as a professional footballer, who plays at a “high” level.
Online gaming has allowed Haleem to combine his technical passion and competitive sense. While studying artificial intelligence at the University of Manchester, he became obsessed with the monster killing game Quake. “It was the first game you could play on the internet,” Haleem said. “It was life-changing for me. I played for hours.” As it turns out, Haleem has a talent for the game (he keeps rising up the game rankings). In 1999, he won the Cyberathlete Pro League’s “FRAG 3” tournament for $10,000. “At some point, I became the best person in the world in certain fields,” Haleem said.
While Haleem neglected most of his studies while honing his gaming skills, it didn’t seem to matter. After dropping out of university in 1999, he moved to Sweden to work at DICE, the publisher responsible for the popular Battlefield franchise. In 2004, the company was acquired by Electronic Arts, but by then Haleem had left, trading Scandinavian winters for California summers.
In Los Angeles, Haleem helped others build the Global Gaming League, an American esports organization. During this period, he developed a friendship with a partner that would prove to be important. The year after Haleem conquered Quake, Shawn Fanning was featured on the cover of Time magazine. Napster, the peer-to-peer music-sharing platform Fanning co-founded with Sean Parker in 2000, is nearing its peak, though it has already begun to incur legal troubles. When Haleem and Fanning became friends in the mid-2000s, the Napster Company had closed and Fanning had embarked on his next adventure.
The two engineers met through a common interest in technology, gaming, and networking systems. In the years that followed, both Fanning and Haleem embarked on entrepreneurial endeavors in gaming, giving them more reasons to interact. Fanning sold his business, Rupture, to Electronic Arts for $30 million in 2008, before investing in Haleem’s social gaming startup Diversion a few years later. If it weren’t for the emergence of the Internet of Things (IoT) revolution, perhaps the two of them would have been on different paths.
Internet of Things
Computer science teachers at Carnegie Mellon University are tired of walking up to a Coca-Cola vending machine only to find it’s out of stock, or the contents haven’t had enough time to cool. To combat this, some enterprising caffeine addicts have installed a set of “microswitches” that register whether each slot of the machine is full — and how long it has been. By connecting these switches to ARPANET, an instructor can quickly check the status of the vending machine: to see if it has Coke in stock and if it has cooled long enough. The year was 1982, and the connected Coke machine represented the first “Internet of Things” device.
It took decades for what computer scientists at Carnegie Mellon University to do out of thin air to reach the mainstream. In fact, it wasn’t until around 2010 that the IoT topic gained meaningful momentum in venture capital. Nest Labs opened that year, and SmartThings and Ring followed in 2012.
Among Haleem and Fanning’s friends, they have noticed a rise in this interest. “It feels like everyone around us is suddenly developing sensor applications,” Haleem said. Various acquaintances started working on projects like a smart doorbell, a baby wearable, and a demographics system. While focusing on different end customers, all utilize connected hardware. These founders encountered two fundamental problems:
- data cost. Connecting devices to an existing network is expensive, costing a few dollars per month per device. These costs limit the viability of many models as IoT companies typically seek broad scale and significant density.
- Battery life limit. Traditional networks quickly drain the battery life of IoT devices. Products that need to be replenished or recharged frequently reduce their utility and, consequently, their appeal to consumers and businesses.
When friends reported the problems to Haleem and Fanning, they started thinking about potential solutions. “Shawn and I started discussing whether we could build a sensor to help with this application,” Haleem said. The two began to outline a potential solution: a distributed network of devices, at extremely low cost and with minimal batteries The load provides connectivity for IoT devices. We basically designed it to be a super-long version of Bluetooth, and that’s where Helium started.”
In hindsight, Haleem and Fanning picked an opportune moment to launch their business. In 2013, the year Helium was founded, there were an estimated 2.1 billion IoT devices in the world. That’s far less than the 9.5 billion “non-IoT” connected devices, including phones, computers, and tablets.
The two categories swapped places in 2020. During the year, there were 11.7 billion IoT devices and 9.9 billion non-IoT devices. By 2025, data from many market forecasts means that this gap will be even more pronounced, with the number of IoT devices tripled. By then, the IoT market is expected to be worth $677 billion, surpassing the $1 trillion mark by 2030.
Data source: Statista
Some venture capitalists recognized the tide that drove Haleem and Fanning’s creations. Matt Turck, managing director of FirstMark Capital, wrote Helium’s first check. Turck was impressed by the company’s approach and its CEO. “The Internet of Things needs a different network to turn some wild dreams into reality. Amir is a very special CEO,” he said.
In particular, Turck was impressed with Haleem’s “high IQ” and his ability to switch between grand vision and technical details. “He’s one of those great guys who’s really good at both of those things,” Turck said.
Another trait that Turck may not have had the opportunity to see early on in Haleem – boldness. It will prove to be the defining characteristic of Helium’s CEO.
go to business
Haleem got to work after raising $2.8 million in seed funding. He first tried to build his new network by partnering with real estate companies. As Turck shared, Haleem reached out to co-working spaces and large developers like Related, asking if the startup could put hotspots on the roofs of various buildings. While these businesses find Helium’s vision appealing, it’s challenging to translate broad interest into concrete commitments without obvious incentives. “When things got to this point, there was still no reason to move companies to work together,” Turck said.
As Helium works to increase network density, the company has executed its first inflection point. Rather than trying to build a broader service, Helium turned to serving the needs of targeted businesses. This revised vision was enough to land the company a sizable Series A round (Khosla Ventures led its $16 million round).
During this time, Helium worked with hospitals, factories and other businesses. Turck outlines one such collaborative project: Helium’s business outfitted a hospital’s vaccine refrigerators with temperature-monitoring sensors. Information from these devices is then sent to Helium’s cloud. While not as ambitious as originally envisioned, this iteration gives Helium room to refine its approach and work with paying customers. Although it didn’t achieve product-market fit, Haleem raised a Series B round in 2016. Google Ventures, which led the round, may be particularly interested in the round after its parent company acquired Nest two years ago.
Heading into 2017, Helium secured $20 million in new funding, with brand investors on their side, and a reasonable, if not too bold, plan to compete in the marketplace. Helium quickly threw it out of vision, though.
go to cryptocurrency
During the first four years of Helium, Amir Haleem had little interest in cryptocurrencies. Except for one of the startup’s employees who participated in Ethereum’s ICO, no one on the team was particularly interested in its intricate innovations. “I don’t think anyone in the company is really taking it seriously,” he said. “Blockchain is just a buzzword for us.”
At the end of 2017, this began to change. Haleem noted that Filecoin’s ICO was a turning point, showing a “serious team” and a “real idea.” The CEO of Helium began to wonder if cryptocurrencies could provide a solution to his company’s incentive problem as it tries to win over real estate developers. Rather than relying on the goodwill of external parties, Helium can offer token rewards to those who keep the network secure. As the Helium network grows and more and more IoT devices rely on it, its value will also increase. The associated tokens will also increase accordingly. This transformation will create consensus among the different stakeholders of the company.
The problem is, Haleem’s team knows almost nothing about the field. “We don’t even know where to start,” the CEO said.
Haleem stumbled across an article titled “Understanding Token Velocity”, a blog post by Kyle Samani of Multicoin Capital, and Haleem found some direction. “It became something I read over and over again,” he said. Haleem decides to contact Samani to talk. By chance, the Austin-based investor was in San Francisco for a few days, giving the two a chance to talk face-to-face. Soon after, Haleem flew to Austin to continue the conversation.
Along with partner Tushar Jain, Samani shared his thoughts on how the Helium cryptocurrency network works. Since there is no ready-made high-throughput blockchain, Haleem needs to build its own first layer to handle Helium’s network. “There was no Solana or Avalanche at the time,” Haleem noted.
While this is a challenge, especially for a team new to cryptocurrencies, both Multicoin and Helium are increasingly convinced of the idea’s potential. Other companies that Haleem spoke with did not share this optimism. “Multicoin is the only team that understands what you can do if it succeeds.”
In June 2019, Helium announced that it had raised a $15 million Series C round to pursue its cryptocurrency strategy, co-led by Multicoin Capital and Union Square Ventures.
After years of searching, Helium moved quickly, believing it had found the right direction. Less than two months later, the company launched its network in Austin, where Multicoin helped kick-start early density deployments. Neither Haleem nor Multicoin expected their new network to develop at such a rate.
In 2019 and 2020, Helium was solid in size, but in 2021, the network really exploded. Within 12 months, the number of hotspots deployed rose from approximately 14,000 to 450,000 (a 3,100% increase). By the end of the year, more than 34,000 cities and 161 countries had Helium hotspots. As COO Frank Mong points out, it’s “the fastest wireless rollout in history.” The company conducted a $111 million token sale in which a16z and Tiger Global participated.
The approval of Helium Improvement Program 19″ (HIP 19) played a key role in sparking this appeal. Prior to HIP 19, all hotspots were produced by the Helium team or a third-party vendor called RAK Wireless. While this may allow Helium to monitor hardware production more closely, it limits supply. HIP 19 outlines a framework for approving new manufacturers. By the end of the year, 25 companies were producing hotspots, helping thousands to join .
The sharp volatility in the broader cryptocurrency market has also had little impact on Helium. Helium’s native token, HNT, started the year at $1.36 before surging to a high of $53. This upward trend has rewarded Helium’s early contributors, with one source noting that they have heard of rewards reaching 250,000 HNT in some hotspots, an amount worth $12.5 million at HNT’s high. It has also inspired more and more people to join, including some businesses established to take advantage of the opportunity.
Max Gold, founder of Hotspot Rescue, is one of them. Gold received a hotspot in March 2021, serving a local company for promotions. Gold was intrigued by the device and installed it in his Houston apartment (which happens to be on the 26th floor). He quickly realized that it could earn a lot of tokens, around 30 HNT per day. This becomes even more attractive as the price of HNT has doubled to around $10 within the first few weeks of operation. Almost overnight, Gold took ownership of a “money printing machine” that generated $9,000 a month, and more as HNT continued to rise.
Recognizing the revenue potential of these devices, Gold began using friends’ devices and placing them in suitable locations in exchange for a revenue share. After he exhausted that avenue, he contacted an Internet Service Provider (ISP) in Kentucky about putting hotspots on their towers. After a weekend of experimentation, he and the ISP formalized their arrangement, forming a business focused on “web3 implementation.” In partnership with a range of ISPs, Hotspot Rescue has installed 750 devices, although not all of them are operational. Gold estimates that there are about 100 participants in the Helium community who are professionally installed in his company’s way. Along with consumers, these businesses have contributed to Helium’s expansion.
Such hyper-growth will naturally have some hiccups. Not all hotspot owners are acting in the best interests of the network, finding ways to use Helium’s “Proof-of-Coverage” algorithm to suck up underserved HNT. In November 2021, a vulnerability in the company’s codebase caused a network outage, prompting changes to the network and verification process.
While not ideal, this small disturbance didn’t detract from an extraordinary year for Helium.
Return of Winter
2022 brings new opportunities and challenges for Helium. HNT has not escaped the crypto winter either, with the coin currently trading at $9.20, down more than 80% from its peak. This drop comes even as Helium continues to expand its network, with more than 900,000 hotspots. At its current rate of growth, it will reach 1 million devices within a few months.
Helium has also started rolling out its latest project: the 5G network. We discuss this move and the project’s broader growth strategy in more detail below. Currently, about 1,600 5G hotspots have been activated, spanning nearly 700 cities. In April, Helium raised another $200 million, co-led by a16z and Tiger, with participation from the venture arms of telecom giants such as Deutsche Telekom, Nokia and Liberty Global. As part of the announcement, Helium announced the rebranding of its corporate entity as “Nova Labs.”
Despite the traction and capital infusion the project has gained, there is some unease among Helium’s consumer base. Some of that anxiety comes from the softening of incentives. Max Gold of Hotspot Rescue sums up the situation. “The returns are so poor right now,” he said. While he remains bullish on the network, he attributes the drop in returns to increased competition in hotspots, pressure on HNT sales from specialized bad actors, and concerns over the rollout of 5G and other network changes.
This combination of tremendous momentum and uncertainty puts Helium in an odd position. It is both an unprecedented success, launching a network in record speed, and an organization that is embarking on another massive evolution. Considering Helium’s history of tenacity, iteration and daring, it’s in the DNA of the Haleem Company.
Product: IoT Network
Helium is easy to understand, a network of IoT devices, but tricky when it comes to more details. It is not so much a product as it is an ecosystem involving hardware, blockchain, tokens and a local economy.
We must explore each of these components to understand where Helium is headed.
The easiest place is the Helium hotspot. While Helium and RAK Wireless originally made the devices, there are now 26 approved manufacturers. The most popular manufacturer is Bobcat (bobcatminer.com), which offers three models, including a new 5G-ready version. Manufacturers are also offering their own smartphone apps to manage devices, a recent shift. Initially, Helium provided an app to manage hotspots from various manufacturers.
At the peak of HNT, these inconspicuous hotspots operate like money printing presses. Equipment can generate thousands of dollars per month just from a production location sitting on a windowsill or table.
The hotspot provides coverage using a network called “LongFi” created by Helium, which combines LoRaWAN (Long Range Wide Area Network) with the company’s blockchain. LongFi consumes the least amount of battery power and extends 200 times more than WiFi. Since LongFi uses “unlicensed” frequency bands, it’s also a lot cheaper than traditional data plans. This is a key distinction to understand, as it also affects Helium’s 5G strategy.
The Federal Communications Commission (FCC) issues spectrum licenses (including radio and higher-band spectrum) to companies in exchange for fees. TV broadcasters and telecom operators are happy to buy licenses for this spectrum because it promises uninterrupted access. However, not all frequency bands within a spectrum are licensed. The unlicensed portion can be used without paying a fee or obtaining a license from the FCC. The downside is that these bands tend to have more interference. By leveraging unlicensed spectrum, Helium provides IoT connectivity at a fraction of the cost.
The second key element of LongFi is Helium’s blockchain. Each customer has a unique identifier registered on the blockchain. When the customer’s devices are used, they can be traced back to this ID. Most importantly, no centralized entity has to give the green light to send data or add new devices to the network. This is very useful if you are a customer like Lime, for example. Once identified on the network, you can add new scooters and send data to the Helium cloud for viewing and processing without top-down approval.
proof of coverage
For Uber, the world is a hive. You may have noticed this while using the app. The car-sharing company divides the territory into a series of hexagons, a grid used to visualize and identify different locations and better understand supply and demand. Such cohesive systems can be implemented across territories and metropolises of varying size and complexity.
This system, called “H3”, is an important base layer of Helium’s “Proof of Coverage” algorithm. Take a look at Helium’s heatmap and you’ll see how this plays out.
Proof of Coverage (PoC) is Helium’s way of verifying the scale of its network. Specifically, it’s used to test whether hotspots are where they say they are. This is important given that HNT rewards vary by location. One of Helium’s most powerful levers is its ability to economically incentivize network growth where it is needed. Without reliable tracking of coverage, expansion becomes nearly impossible.
PoC operates through a “challenge” mode. This is basically a microcosm of Shakespeare’s technical drama with three main roles: Validator, Beacon, and Witness.
The role of the validator in the play is to issue a challenge. They call out to a specific hot spot around the world, saying: Prove you’re where you say it is. In order to avoid shame, the challenged hotspot, the so-called “beacon”, will retort: I am here! Anyone who hears my voice will know I’m here. Anyone who hears my voice can attest to my whereabouts. A nearby hotspot was enlisted to serve as a witness. This hotspot is reported to the validator, said. I have heard the voice of the beacon tower and confirmed that he is not lying. As with any reputable production, each of these characters will be paid for their role in HNT as compensation.
While the above example is a simplified illustration, the principle is not far behind. A technical explanation will add some color. A validator (a node that staked 10,000 HNT) challenges a beacon after a certain number of blocks. Beacons transmit packets of data that are observed by nearby witnesses (often more than one). The witness reports the existence of this data, submitting a receipt to the validator.
While the PoC is mostly valid, some people are playing around with it. In April 2022, Deeper Network – a web3 infrastructure business was banned from using the Helium network for at least one year. The company is believed to be involved in falsifying the location of its hotspots, using hotspots around itself to make false claims. Deeper Network believes that a manufacturing partner performed this behavior without their knowledge.
According to Max Gold, it is not uncommon to play around with PoCs. Those who effectively trick the network tend to sell the HNT they earn as quickly as possible, putting downward pressure on the price of HNT. Gold pointed out that Helium’s core team has been fighting these types of scams. “Things are starting to improve now,” he said.
While any system that provides financial rewards can be manipulated in some way, Helium has built a novel and largely effective way to secure its network.
As John Robert Reed of Multicoin Capital puts it, “Helium builds the economy”. At the heart of the project is an IoT data marketplace through which Helium and its stakeholders trade.
To use Helium’s IoT network, customers burn HNT in exchange for data credits (DC). This has a deflationary effect on the price of HNT. Data credits hold a steady value, 1 DC equals $0.00001. Companies spend data credits by transferring data through LongFi and transacting on the Helium blockchain.
Helium’s economy looks modest or small, depending on how you parse the numbers. According to Token Terminal, Helium’s total revenue in June was $2.6 million. That’s down from April’s high of $5.5 million, but up 73% from a year earlier. In 2020, Helium’s June revenue was under $200,000. Eddy Lazzarin, head of protocol design at a16z, noted that when a16z first invested in Helium, “it had about $600 in funding over the past 3 months.” It has come a long way since then.
However, this is only part of it. Data credits are used when joining hotspots, determining location and processing payments. From a data credit point of view, the effort to settle into hotspots is particularly intensive. Since Helium is adding many new hotspots, this skews the results, indicating more customer activity than there actually is. Data from the Decentralized Wireless Alliance, which strips out these three uses, shows the scale of customer demand for the Helium economy. By that measure, its direct-current usage in June was just $6,561.
In either case, it’s clear that Helium’s network has room to grow. Indeed, it needs to. While it has done an excellent job of expanding the supply of the project, approaching 1 million hotspots, there is still a need for more demand. Embracing 5G could send this side of the market skyrocketing.
The future: the network of networks
Helium isn’t content with just being the world’s largest IoT network. It hopes to be the foundational layer for a range of communications networks that will fundamentally disrupt traditional telecommunications and bring connectivity to those who need it.
Opportunities for DeWi
It’s hard to understand just how big a market Helium is chasing without having a grasp of what’s going on in the telecom industry. The global telecom market size was valued at USD 1.6 trillion in 2020 and is expected to expand at a CAGR of 5.4% from 2021 to 2028.
Aside from scale, the telecom space has several intriguing quirks that make it a place ripe for disruption. First, competition is minimal. In the US, when it comes to wireless carriers, there are three major players; Verizon, AT&T and T-Mobile control about 98.9% of the market. AT&T is the world’s largest telecommunications company, with 2021 revenue of $169 billion.
Salvador Gala, co-founder of Escape Velocity, a fund dedicated to investing in decentralized wireless networks, noted that telecom operators have traditionally had strong ties to governments. Based on internal research, Gala suggested that much of the industry is still directly or indirectly subject to state policy. “25% of the entire telecommunications industry globally is owned by governments, and the other 75% is extremely tightly regulated,” he said. After the “money printing press,” it is the government’s top priority for maintaining sovereignty. Gala pointed to the U.S. Congress directing telecom suppliers to remove hardware from Chinese manufacturers such as Huawei and ZTE as an example of the state agency’s control over the industry.
This is far from the most extreme example. Other governments not only influence enforcement, but also shut down communication networks in turbulent times. The Carnegie Endowment for International Peace has documented hundreds of such incidents over the past few years. During the Russian-Ukrainian conflict in March, Russia’s internet regulator shut down access to Facebook and Twitter. News organisations such as the BBC, Voice of America and Radio Free Europe were subsequently banned.
For these reasons, Gala believes that “decentralized wireless” (DeWi) projects like Helium are essential. He believes that “wireless is one of the few things in cryptocurrencies that needs to be decentralized”.
In addition to the social value of having an uncensorable network, the DeWi project has the potential to increase connectivity faster and more cost-effectively. Installing a traditional cell tower can cost $150,000, Haleem said. Helium’s chief product officer, Abhay Kumar, added that even reaching this stage could take a while and involve many aspects. “Traditional networks are highly centralized infrastructure that requires a lot of planning and capital expenditure. This ultimately leads to the involvement of numerous middlemen.” In the process, telcos ignore communities that do not provide business value. “Vulnerable communities” often have few or low-quality connections left, Kumar said.
The DeWi project flipped that playbook. Rather than buying expensive spectrum, contracting out proprietary equipment and doing expensive installations, the DeWi project works bottom-up. They exploit bands of spectrum, use off-the-shelf components, and rely on citizens to install equipment in their homes. Boris Renski, founder of FreedomFi, shared a chart outlining the differences between traditional and DeWi processes.
Courtesy of Boris Renski
FreedomFi is a provider of DeWi infrastructure and a partner of Helium in the push for 5G. Legacy providers and DeWi don’t need to be enemies, Renski added. In fact, the best solution for all parties, including consumers, is for incumbents and insurgents to work harmoniously together. That’s in part because DeWi networks offer a density that big telcos can’t.
“Most traditional operators who build their networks top-down don’t have the conditions to build very dense small cell networks, they can build several towers in a city,” Renski said. “They can’t put one in every coffee shop. Small Cells”. According to Renski, this density will be necessary as higher frequency bands are utilized, as those parts of the spectrum do not pass well through walls and other obstacles. Importantly, these DeWi implementations can take place in communities overlooked by incumbent companies, bringing more people online. The collaboration between DeWi and existing providers presents an opportunity to create strong, broad connections.
Helium hopes it will be a vital piece of infrastructure to make this happen. In fact, it hopes to be the backbone of a range of networks beyond IoT.
Beyond the Internet of Things
To roll out the 5G network, Helium had to rethink its structure from the ground up, conceiving new equipment, incentives and management entities. This new architecture is also designed to serve the network of the future. Helium hopes to eventually support WiFi, VPNs and CDNs. As mentioned, Helium needs to do this – the level of demand on the network is not sustainable at current levels.
Supporting 5G requires a new kind of hotspot. So far, six launch partners have provided indoor and outdoor equipment built for the network. The devices are significantly more expensive than Helium’s IoT offerings — a few thousand dollars each. While indoor units are easier to install because they can sit on a windowsill or table like the original miners, outdoor products require more implementation. The upside is that these external devices may earn more of Helium’s new MOBILE token.
Helium’s new economy is as sophisticated as it is elegant. In order to use the organization’s network, including 5G, customers still need to burn HNT in exchange for data credits. However, instead of earning HNT, miners will generate tokens specific to the network in question. IoT-enabled devices will get a new token called IOT, while 5G hardware will yield MOBILE. Each of these currencies can be exchanged for HNT, but the reverse is not possible: for example, you cannot exchange your existing HNT for MOBILE.
Crucially, each of these economies will be governed by child DAOs with the power to define their own proof-of-coverage, mining rewards, and pricing. As explained by CPO Abhay Kumar, this structure keeps the core mechanism of Helium intact.
We see this opportunity as a “rising tide” situation. All sub-DAOs need to use data points to settle traffic payments, and data points exist by burning HNT. This maintains the Helium flywheel and ensures that each child DAO has a strong affinity for the Helium network, thus guaranteeing other child DAOs as well.
In the future, Kumar expects consumers to use multiple child DAOs.
For example, for their cell phone, they would use a carrier on the MOBILE sub-DAO to make and receive calls, but might also use a WiFi sub-DAO to access the train station’s WiFi network while they wait. All of their data can go through a secure tunnel connection to a specific end node that exists on the VPN child DAO, or some of their traffic can be served through a node on the CDN child DAO.
While Helium has yet to announce the partnership, Solana could play an important role in making that happen. Helium is rumored to be considering moving its first tier to Solana. While this may cause a temporary disruption, it can also radically reduce the technical burden on the Helium team. During our conversation, Haleem said that if a company wanted to use Solana to compete with their network, it could build a clone of Helium with a thousandth of the engineering effort. Given that Haleem’s The People’s Network is still in its early stages, Haleem might be tempted to do such a deal.
It’s unlikely that Solana’s growing interest in telecommunications is accidental. Last month, the agreement debuted the Saga, an upcoming web3-based smartphone. Within a year, it is entirely possible for consumers to use their Saga to connect to Helium’s network and mine a set of tokens. First, Helium needs to win the “Cellular Summer” battle.
Right now, there are about 1,600 5G hotspots in the wild. Helium hopes that by the fall of this year, that number will have multiplied many times over. It is worth noting that this promotion method is mainly concentrated in the United States. The lack of unlicensed bandwidth in other regions makes the rules of the game immature for the time being.
Later this month, Helium will push its 5G plans into the “Genesis” phase. Hotspots will start earning MOBILE for the first time, issuing 100 million tokens per day. There is also a pre-mine for those who have launched the network so far.
The company’s entry into 5G is not short. Over the past year, competitors have emerged, using Helium’s success as a template. For DeWi believers, this is good news. Different competitors are learning from each other and improving their products through competition.
The most high-profile challenger is Pollen Mobile. A subsidiary of Pronto AI, Pollen relies on a system of “Flowers” (static hotspots), “Bumblebees” (mobile hotspots), and “Hummingbirds” (smartphones using Pollen eSIMs) to create a 5G network , which promises “privacy first.”
There is no shortage of irony in this statement. Pollen’s founder, Anthony Levandowski, accomplished a rare “hat-trick” before his latest venture. As documented in Mike Isaac’s book Super Pumped, while working at Google, Levandowski started a side business serving his employer, but did not disclose his ownership of the entity. He then sold the company to Google at a price that ensured he didn’t have to share the profits with his employees. After leaving Google, Levandowski downloaded 14,000 confidential documents related to the company’s self-driving project, which he then used to launch his self-driving startup. He quickly sold the company to Uber. Levandowski was charged with theft of trade secrets for this final violation and was sentenced to 18 months in prison. Donald Trump granted him a pardon before serving his sentence. The venture capital market penalized Levandowski for his actions with a seed round penalizing valuation.
While Pollen may be cryptographically secure, we have seen many early cryptocurrency projects being manipulated by unscrupulous founding teams. Funds can be misappropriated and incentives can be distorted. Pollen may be a true example of integrity, but trusting your data to Anthony Levandowski’s network feels like relying on cryptocurrency escrow built by Razzlekhan, the “hermaphrodite” of the cryptocurrency age with $4.5 billion in bitcoin people.
Pollen, however, is a viable competitor. The lucrative “Pollen Token” (PCN) reward could convince even the most skeptical consumers to give it a try and plant a flower. Helium has an advantage over Pollen, but not by much. Helium may have 900,000 IoT hotspots, but as mentioned, it only has 1,600 hotspots equipped for 5G. Pollen has 525 flowers in its network, a 16 percent increase from a month ago. It also has 466 bumblebees (mobile hotspots). While Helium’s established community and strong track record should help drive rapid implementation, success is by no means certain. Some Helium community members have begun deploying Pollen devices, in part due to declining HNT returns.
Helium must act fast to protect its position. An effective strategy is to use its strengths and Pollen’s weaknesses: reputation. As a market leader without ethical baggage, Helium should be able to solidify even more important partnerships. So far this seems to be true. In October 2021, Helium announced a partnership with the DISH Network. As part of the collaboration, DISH will leverage Helium’s reach to fill connectivity gaps. Other major players are likely to follow. “We’ve seen incredible traction and interest this year from traditional telcos who are interested in learning about and joining our mission. It may not be long before Helium will attract one of the telecommunications giants,” Haleem said.
Helium is on another ambitious mission. In fact, winning the 5G war could put it on a path to becoming one of the most valuable entities in the world.
Yet despite this uncertainty, much can already be learned from Amir Haleem’s business. As noted by Multicoin’s John Robert Reed, Helium creates a “new business model for deploying infrastructure.” The startup struggling to win landlords and dabble in the Internet of Things for micro-enterprises has pioneered how to build networks and use cryptocurrencies effectively. Eddy Lazzarin of a16z elaborated on this second point, saying: “When you launch a token, there needs to be a purpose.” While many different “X to Earn” models have tried using tokens as subsidies, Helium has It turns out that this kind of reward works best when it adds real, lasting value”. Lazzarin noted: “It would be smarter if network subsidies actually help the network grow and make it better for the next consumer.” .
What infrastructure can the world build on Helium’s model? What new networks can cryptocurrencies create?
The French-Romanian playwright Eugène Ionesco once said: “It is not the answers but the questions that inspire people”. More than just about any project, this kind of worthwhile interrogation, asking questions that inspires people.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-did-cryptocurrency-pragmatism-practitioner-helium-build-a-decentralized-telecom-operator/
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