A Complete Guide to Helium

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robertstevens

Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.

Helium is a cryptocurrency project that wants to create a decentralized wireless network using low-powered “Internet-of-Things” devices. According to the founder of Helium, Amir Haleem, WiFi and Bluetooth are expensive and have a limited range, while satellite towers use up too much power and are run by monopolies. Helium thinks it’s better to put these networks on the blockchain and create a cheap, decentralized industry that uses less power.

It’s a lofty goal, but ambition has never been a problem for crypto-entrepreneurs. Helium, also called “The People’s Network,” Helium, launched in July 2019. And so far, it’s working: As of February 1, there are 536,315 hotspots, mostly in North America, China, and Europe.

Helium was created by Amir Haleem, Shawn Fanning and Sean Carey in 2013. Fanning is best known for co-creating the peer-to-peer file sharing service of the late 90s, Napster. It sourced $53 million from reputable investors like Multicoin Capital and Union Square Ventures. Its token, HNT, rose from a market cap of $86 million at the start of 2021 to a high of $5.38 billion in November of that year. As of February 2022, HNT’s market cap is $3 billion.

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Helium won’t replace the WiFi in your house or your mobile phone plan. Instead, Helium uses Long-Fi radio signals to reroute the data packets sent by low-power devices in your area that rely on these signals. GPS trackers, weather vanes, and environmental systems generally use these packets to send small bits of information. Then Helium’s hotspots use your regular Internet—like your WiFi connection—to send these data packets. By “mining” on Helium (through something called “proof-of-coverage”), you spread these wireless connections around the world, and earn the Helium crypto—HNT—as a reward.

If you can’t use Helium for WiFi, then what can you use it for? Many of the current use cases are for “smart” devices – such as smart fridges, toasters and thermostats. Examples of companies already using Helium include Airly, an air quality monitoring service, Barnacle, a package tracker, and Carebrand, which among other things, monitors elderly people with dementia and helps out with COVID-19 contact tracing.

Let’s take this last example, Carebrand, as a case study. CareBrand sells bracelets that ping the location of, say, a missing elderly relative to their care worker. So if a carer needs to pinpoint the location of someone who walks somewhere that regular Internet cannot reach, the Carebrand bracelet could request their location from Helium.

Beyond these use-cases, the broader idea, writes Haleem, is that the network can expand at a far lower cost, and far quicker, than regular telecom companies. He says that Helium is great for areas traditionally underserved by telecom companies; since HNT (the Helium cryptocurrency) incentivizes people to build hotspots in remote areas. Helium’s network is, unlike a monthly data plan, pay-as-you-go, and data isn’t capped.

The network’s proof-of-coverage algorithm verifies that hotspots are located where they say they are and that they are actually providing radio coverage. That prevents hotspot operators from spoofing their location and verifies the legitimacy of the network and the coverage that it can reliably offer. Those who pass the test earn the Helium coin, HNT.

There are three types of hotspots that function as, essentially, Helium crypto miners. The first is full hotspots, onto which are uploaded entire copies of the Helium blockchain. They are rewarded by the consensus algorithm in HNT, as well as for forwarding on data packets. Then there are light hotspots, which use validators to scrape information about the HNT blockchain. Light hotspots are also rewarded for participating in proof-of-coverage challenges. Finally, there are data-only hotspots, which rely on validators to download the Helium blockchain. They’re only rewarded for forwarding on data packets.

Hotspots earn more of HNT if they complete these PoC challenges, report on how other hotspots in the network are doing, and send data. Validators are computers that maintain the PoC consensus. You can become a validator by staking HNT—you’ll need 10,000 HNT to do so directly (about a quarter of a million dollars, as of this writing, per Helium’s crypto price), although you can pass your HNT to other validators and earn a cut of what they earn.

Although anyone can become a Helium miner—you don’t need to be the CEO of a telecom company—you’ll need to buy a specialized miner, unless you happen to have an IoT-compliant device that supports the LoRaWAN wireless protocol that may set you back several hundred dollars. Haleem claims that hotspots compliant with Helium Long-Fi have a reach of about 200 times greater than WiFi, and you’d only need about 50-100 hotspots to power an entire city.

How does HNT work?

HNT is the token that incentivises people to use the network. In 2021, the incentives were immense, causing an excess of demand for miners. Helium’s growth started in 2021, picking up along with the rest of the crypto market. Helium’s crypto value rose from $1.3 at the start of 2021 and hit $16 by April. Even though Bitcoin plummeted shortly thereafter, Helium kept rising—to $22.8 by September. November was a blowout month; HNT peaked at $52 in the middle of the month. But since then, prices have been volatile—just like the rest of the crypto market. By the middle of December, HNT had sunk to $26. HNT managed to recapture $40 by the start of 2022, but not for long. By early 2022, HNT had fallen to $27. As for Helium crypto predictions? It’s anyone’s guess.

Helium is created by the proof-of-coverage consensus mechanism, although there’s a maximum supply of 223 million HNT. As of early 2022, there are about 110 million HNT tokens in circulation. It launched without a pre-mine, meaning early backers didn’t get access to the token before the wider public. The token runs on its own blockchain—it’s not based on top of the Ethereum blockchain, for instance.

Every two years, the protocol will cut the rewards of new HNT tokens in half. This is known as a halving. Helium’s not the only blockchain to implement such a system; Bitcoin’s blockchain has a halving approximately every two years. Cutting the rewards in half limits the supply of new HNT tokens, meaning that it’s harder to exhaust the total supply of rewards. Rewards began at 5 million a month, and in August 1, 2021, this was cut to 2.5 million. The next halving, in 2023, will cut the issuance of HNT to 1.25 million per month.

HNT isn’t the only cryptocurrency within Helium’s ecosystem. The other is called the Data Credit, which devices can spend to access Helium’s Internet. Each data credit is worth $0.00001. They’re minted by “burning,” or destroying, HNT tokens. Once you’ve minted a Data Credit, you can’t send it to anyone else; conversely, you can trade Helium crypto just like any other cryptocurrency.

How to buy Helium’s crypto

You can buy the Helium digital currency from cryptocurrency brokerages, like Wealthsimple Crypto, or exchanges like Binance or FTX. The coin is also known as Helium—HNT is just the Helium crypto ticker that you’ll see on exchanges. You can check the most popular markets on sites like CoinMarketCap or Coin Gecko. CoinMarketCap lists the most popular site as Binance, followed by Binance.US (an independent version of Binance that targets US users), then FTX, Gate.io, and KuCoin. As of February 2022, Coinbase, Newton, and Shakepay don’t support Helium. You can’t buy Helium on a decentralized exchange.

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Several of the exchanges that offer Helium do not operate throughout Canada. Binance.US is limited to U.S users, and Binance itself has had trouble with Ontario regulators, who say that the exchange is not allowed to operate there. FTX doesn’t onboard users from Ontario, and Gate.io prohibits residents of Ontario and Quebec. The Ontario Securities Commission cracked down on KuCoin in 2021. Crypto.com offers Helium to all eligible Canadian traders.

To buy HNT on a crypto exchange, you’ll first have to sign up to one. This requires providing a form of identification, like a driver’s license or passport. After setting a password and sharing your email, you’re pretty much good to go, so long as your identity verification checks out. Then you’ll need to fund your account.

Because HNT is a relatively small token—it ranks 44th on CoinMarketCap’s list of top coins by market cap—most tokens offer a single, or a handful of, pairings. Crypto.com, for instance, offers just one pairing: USDT. That means that if you want to buy HNT on Crypto.com, you’ll need to first get your hands on USDT. USDT is also known as Tether; it’s a US dollar stablecoin. Other exchanges might let you buy HNT with another cryptocurrency or fiat currency. Binance and FTX offer USD pairings. Binance offers a Bitcoin pairing. And Gate.io lets you buy HNT with ETH.

There are two ways to buy USDT. The first is to fund your account with cryptocurrencies, like Bitcoin or Ethereum. Most cryptocurrencies, if not all, will have USDT pairings on crypto exchanges. If you plan to follow this route, you’ll need to buy cryptocurrencies from a place that supports withdrawals to external wallets. Wealthsimple Crypto, along with a handful of other brokerages, do not support this feature. You can also buy USDT directly with Canadian or US dollars—you can wire funds to an exchange or buy cryptocurrencies directly with a credit card. Different choices come with different fees. That said, wiring funds, then buying USDT on the professional-looking “spot” exchange, then buying HNT is usually the cheapest avenue.

Once your HNT is in your wallet, it’s yours to do with as you please. You could withdraw it to a Helium crypto wallet; you could buy 10,000 of the coins and set up a validator, or simply stake them with another validator or with a crypto exchange. This will generate returns in the form of HNT. You could transfer your HNT to a wallet and then use the cryptocurrency to buy Data Credit tokens, which grant you access to HNT’s network. You could also just buy and sell HNT tokens, holding them for speculative purposes in the hope that its price will rise when news, or positive reviews of the network, spreads.

Frequently Asked Questions

You can buy Helium crypto, also known as HNT, on a cryptocurrency exchange, like Binance or FTX, or on a brokerage like Wealthsimple Crypto. You can check the most popular markets on sites like CoinMarketCap. To buy HNT on a cryptocurrency exchange or through a brokerage, you’ll need to sign up for an account. This requires you to provide some form of identification, like a driver’s license or a passport. Once you’re on the exchange, you’ll have to work out how to buy HNT. You can either buy it directly for regular money—this is the service that brokerages usually offer—or with another cryptocurrency. Some exchanges will only let you buy HNT for another cryptocurrency, usually USDT. The coin, also known as Tether, is what’s known as a “stablecoin”— it’s pegged to the value of the US dollar.

You can buy HNT from a cryptocurrency exchange or a brokerage. Popular examples of crypto exchanges that sell HNT include Binance, Binance.US, FTX, Gate.io, and Crypto.com. However, most of these, save for the exception of Crypto.com, offer patchy coverage throughout Canada—if they service Canadians at all. You can buy HNT from brokerages like Wealthsimple Crypto, but you should know that if you buy HNT from Wealthsimple, you can’t withdraw your assets and put them to work within the Helium ecosystem.

Last Updated June 16, 2022

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