Helium: Digital Asset Review ($HNT)
"The People's Network" aims to take over peer-to-peer wireless networks with a unique twist.
A Blockchain-enabled Business (B.e.B)
Helium created a blockchain for peer-to-peer wireless internet protocols. What does this mean?
Founded in 2013, Helium reshaped the traditional telecommunications business model by incorporating blockchain technology, added in 2019. Helium deploys hotspots in people's homes to create a global decentralized wireless network that allows people to connect devices at a fraction of the cost of cellular. Their first foray into this telecom space was building on LoRaWAN (Low Power Wide Area Network). LoRaWAN provides a platform for building out the network at a rapid scale relative to the existing fragmented infrastructure of private companies. The Helium network is now the largest peer-to-peer data network in the world. There are over 88,600 hotspots deployed around the world, 4x more than in March 2021, and growth continues to accelerate.
By rethinking the economic model of a telecommunications company, Helium has created what we call a B.e.B. (Blockchain-enabled Business).
If Helium wins in this space, how big could this market get?
How does it work?
Similar to AirBnB's home-rental model, Helium's network expansion is done from the ground up through individuals operating hotspots (nodes) in homes or businesses around the world. The hotspots transmit data to create the pay-as-you-go internet connection.
Helium rewards hotspot operators with Helium Network Tokens (HNT), which can be traded for other crypto or USD. Rewards are increased or decreased based on factors that include local hotspot density. This incentivizes the node operators to continue to transmit data. The hotspots were listed as one of TIME's Best Inventions of 2019. The node operators validate the network.
Helium is targeting the LoRaWan network because of its large addressable market. This network is especially useful for internet-connected devices, commonly called the Internet of Things or IoT. This includes smart fridges, pet collars, or rentable scooters that wirelessly connect to the internet and/or geolocate. IoT-connected devices are projected to expand from 25B to 75B devices by 2025. The Helium network can open up previously cost-prohibitive use cases, such as deploying battery-powered sensors rather than installing expensive WiFi and electrical infrastructure. Looking ahead, there is potential to use the Helium blockchain to build out 5G infrastructure.
The HNT Token
The Helium token is backed by data. To use data on the network, users must purchase data credits, similar to cell phone prepaid minutes. The data credits are pegged to the USD and can only be obtained by burning, or destroying, HNT tokens. Because Helium data can only be created with HNT, the HNT token will become more scarce, and therefore more valuable, as network data usage increases. The hotspot hosts who provide coverage for the network are rewarded with newly minted HNT.
Helium uses a reward incentive model called the burn to mint equilibrium model that allows the token to increase in value as data usage on the network increases. Without boring you with the details, this is a cutting-edge concept, and Helium is the biggest project incorporating it into their economic model. If all goes according to plan, and Helium takes market share in these wireless networks, the Helium token is engineered for a breakout.
Some key takeaways and statistics:
Helium supports IoT-connected devices, which are forecasted to grow from 25B to 75B by 2025.
With 88,600 nodes, Helium is now one of the large peer-to-peer blockchains, with about 4x as many nodes as the Bitcoin network.
There will only ever be 223,000,000 HNT.
With a $2.5B market cap, Helium ranks 70th of all cryptocurrencies.
Resources:
What is the Helium network?
A Twitter thread on Helium economics.
How Helium solves some complexities of the Internet of Things.
Explore Helium hotspots around the globe.
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FirstWatch Crypto was started by Dan McGlinn (@DigitalDanMcG)and John "Blaize" Hrabrick (@blaizebitcoin) who have been investing in the space for a combined 8 years. FirstWatch Crypto is on a mission to simplify the crypto investment landscape.
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