What Is Helium? All You Need to Know About HNT

What Is Helium Network?

Helium Network is a project that aims to provide low-cost internet in a decentralized and global way. The idea is to use Hotspots devices purchased by Helium Network users to share internet data, in a broad coverage, low cost and even reward users through the network’s native token. Thus, the project has an enormous scalability, reaching more people and places that have low or no access to the internet.

History of Helium Network: Decentralization of the IoT Network

The Helium project was created in 2013 by its co-founders: Amir Haleem, Shawn Fanning and Sean Carey. However, the network was only launched in July 2019. When it comes to the team of co-founders, the company has already arrived on the market with a great weight because of the names involved in its ideals. Haleem has an extensive history of developing eSports and some games. Shawn Fanning’s name is linked to the creation of Napster music streaming, one of the first peer-to-peer internet service (P2P) networks in the late 1990s, now owned by Rhapsody International Inc. And finally, Carey is a well-known developer in the community, even before Helium, responsible for projects such as Where, acquired by PayPal, in addition to Brightcove and Basho Technologies.

Even with this impressive team, the Helium Network is primarily formed by its users, responsible for virtually the entire operation and scalability of the network. And having entered the Internet of Things (IoT) industry was exactly what guided this scalability, with a sector of billions of dollars, with more than 8 billion devices connected and forecast of more than 22 billion for 2025. Ranging from home devices, such as printers, baby monitors and even the famous Alexa, to complex, sophisticated industrial devices, devices using IoT technology need to be connected to the Internet through built-in devices to function with 100% of its use. This creates a complete connection between people, processes and moments, indispensable in our daily lives.

However, there are some connection models, such as WiFi and Bluetooth, that have been shown to be limited to provide this connection. Typically, these models are too expensive, too power hungry, or too limited in range.

Helium came to the scene with the intention of creating a decentralized network, powered and maintained by users, that had a wide coverage and low maintenance cost. In addition, the rewards system that pays users with the native network token, HNT, in exchange for sharing information through the hotspots devices. Thus, Helium created its own blockchain network, Helium Blockchain, and pioneered a global peer-to-peer wireless network, connecting different devices, forming the Internet of Things that anyone can use globally.

Helium Network’s Features: LoRaWAN Devices and Proof of Coverage

The Helium Network works by sharing information through physical devices compatible with LoRaWAN and today is the largest LoRaWAN network in the world. LoRaWAN is a Long Range Wide Area Network communication protocol, created based on Semtech’s LoRa technology, and used by the LoRA Alliance, which aims to bring access and connectivity through networks scattered throughout cities. The protocol works with devices that have long range with low power consumption through radio waves.

LoRa is a long-range, low-power communication protocol that uses radio frequency as the transmission model. Because of this, the protocol is widely used in P2P (Point to Point) communications, even that in a more basic way.

LoRaWAN is the sophisticated version based on LoRa, with the objective of accessing the most complex layers of applications and integrating devices through communication with the internet. LoRaWAN devices are radio frequency modules, but have dedicated microcontrollers, responsible for connecting the device to the network and ensuring connection security.

Because of the security, wide range and cost of the radio frequency waves used by LoRaWAN devices, the protocol has become perfect for Helium Network’s blockchain mining and validation model. The Helium blockchain rewards the users for providing wireless coverage and verifying the Helium Network. This validation is done through the unique Helium Network process called Proof of Coverage.

Proof of Coverage is a protocol that works by validating user connectivity, offering HNT tokens in exchange for the users who generate connectivity in their locations, making their surrounding environment smarter.

Source: Helium Explorer - Market

This protocol has some steps and roles played by Helium’s own blockchain network users. Validation occurs through a Challenge of Coverage, which is first sent to the Hotspots of the network and represents a challenge to be performed by one of these Hotspots and for validation of the connectivity and usability of the network provided by this user.

The user who receives the Challenge is called a Beaconer and plays a very important role in the block validation process. Also known as “Challengee” this Hotspot is the target of the Challenge, which will be responsible for validation and will receive most of the reward.

As a guarantee of the receipt, completion and sending of the Challenge, another Hotspot acts as Witness and, through geographical proximity, guarantees the existence and veracity of the transmission of the Challenge data.

Within this network token mining context, all Challenge users receive a share of the reward in HNT. In addition, users also receive tokens when sharing data over the network, using LoRaWAN-compatible devices.

Source: Helium Explorer - IoT

What Is the HNT Token?

HNT is the native token of the Helium Network. It is used as a reward for mining on the Helium blockchain and for transferring data over the network. Much of the network economy revolves around the HNT token. It is also used as a governance token for community voting.

Tokenomics and Ecosystem

Source: Helium - Mine

The Helium Network ecosystem has some mechanisms to ensure the proper functioning of the network, as well as ensuring that the token remains relatively scarce.

Initially, there was a monthly supply of 5,000,000 HNT per month, but users voted to set the maximum supply at 223,000,000. In addition, every 2 years the token goes through a halving, which limits the amount of minted tokens for a certain period of time.

Another important detail of the network tokenomics is the use of the utility-token Data Credits and the Burn-and-Mint model. All transaction fees are required to be paid with DC. Data Credits are $USD-pegged tokens created from a burning transaction of a certain amount of HNT. This model creates a balance in order to increase the scarcity of HNT as the network is used. To perform data transfers, users need to pay DC fees by burning HNT. The DCs created belong only to the user who performed the burning of HNT and remained in their wallet until they were used, and cannot be transferred to other users of the network. The value of the DC is based on the price of the HNT in dollars and is constantly adjusted through a mechanism called HNT Oracles.

Is Helium a Good Investment?

The project has a renowned team within the blockchain technology environment, but the factor that most indicates the success of the Helium Network is community acceptance. Today it is possible to see an exponential growth in the number of Hotspots that joined the network, showing that the project has become increasingly known.

The volume of currency trades is another interesting factor and shows the community’s interest in the token and its economy. In addition, the design of the project tokenomics seems to work without major problems or user complaints and the Burn-and-Mint and HNT Oracles models achieve an economic balance that ensures that there are enough tokens for the operation of the network, but that it is still relatively scarce, maintaining its value.

The HIP 70 proposal is also a point to consider, if you are thinking of investing in the Helium Network. Adding the project to Solana’s network can leverage network range and improve current protocols that are not yet on point in the project. Developers are optimistic about the merger and the fact that it was approved by users through voting indicates that optimism is the majority.

How to Own Helium (HNT)

One way to own HNT is to go through a centralized crypto exchange, so the first step is to create a Gate.io account and complete the KYC process. Once you have added funds to your account, check out the steps to buy HNT on the spot or derivatives market.

News on Helium Network

The community has started voting on the HIP 70 governance proposal, which proposes that the entire network be migrated to Solana’s blockchain. Basically, the idea of going to a better consolidated blockchain, faster and cheaper, would help reduce the costs of validation (Proof of Coverage) and network transactions, in addition to having a blockchain accepted by a greater variety of systems and users without further implementations.

Source: Helium Vote

Despite the vote moving towards this end, some users of the Reddit network participating in the project seem concerned about the future of Helium in the new blockchain. Other users believe that the wave of concern is only FUD generated by speculation.

Useful References

For the latest updates about the Helium project, you can visit:

• The official project website
• Twitter
• Discord
• Facebook
• GitHub
• Telegram
• Reddit
• LinkedIn
• Instagram
• YouTube Channel

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