Remember when the “Internet of Things” (IoT) was all the rage? The concept was simple: we would put sensors on every physical object imaginable, turning objects from “dumb” to “smart.” People imagined a world where refrigerators, doors, windows, appliances, lights, baby cribs, and even cats and dogs would become part of a worldwide network of things.
Why did IoT never take off?
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- Security: All it takes is one point of entry to be compromised for the entire IoT network to be hacked
- Privacy: There are privacy concerns of devices that track us 24/7
- Closed ecosystems: Many of the largest IoT players are large enterprises that operate in closed ecosystems
- Bad incentives: Consumers have not shown much interest in upgrading to smart devices because the benefits do not outweigh the costs
Hotspots earn Helium Token
Every month, the Helium blockchain generates five million new HNT token.
- This newly generated HNT is distributed to the hotspots based on the various roles they play
- A majority of the rewards go to hotspots that are also transferring sensor data across the network
- The Consensus Group members earn 6% of all HNT mined, as well as any transaction fees collected during the epoch
Supply of HNT
The Helium blockchain currently mines a target of five million HNT per month. This amount is halved every two years until eventually, no new tokens are minted.
Use cases
Water Tracking
- ReadyRefresh by Nestlé is one of the first customers to test the Helium network
- Agricultural Monitoring
- Agulus uses Helium’s network to automate water distribution
- Micro-mobility tracking
- Lime uses the network to find lost bikes and scooters
- Building & Asset Monitoring
- Conserv offers wireless monitoring for art collections in private and public museums
- Health Monitoring
- Careband offers consumers wireless wristbands to monitor the location and temperature of people working in hospital or office environments
- IoT Innovation
- Salesforce onboards thousands of employees
- Asset Tracking
- Digital Matter is using Helium to provide GPS tracking devices for businesses
- Air Quality Monitoring
Accounts, Wallets, and Keys
Helium uses the account-based model, which means assets are represented as balances within accounts, similar to traditional bank accounts.
Closing thoughts
Helium has a tough battle to fight, and many challenges lie ahead
Hotspots and Proof-of-Coverage
Helium uses a blockchain to maintain this distributed network of hotspots
- The network governs itself based on pre-written rules codified on the blockchain
- A hotspot can play three different roles
- Challenger: The hotspot that constructs and issues a “challenge.” Hotspots issue challenges approximately once per every 240 blocks
- Challengee: This hotspot is the target of the challenge. When it receives a challenge, it transmits the challenge response packets that nearby hotspots can listen to
- Witness: These are hotspots that are geographically close to the challengee and are responsible for “witnessing” the packets that the challenge is transmitting
Token economics
Helium uses a “burn-and-mint” token economic model
- Supply of HNT is determined by how much demand there is for the network
- Every time a user wants to use the network, he purchases data credits using USD
- These data credits are created by burning HNT
What is Helium?
Helium is a decentralized IoT network consisting of “hotspots” (devices) that are maintained by “miners” all around the world
- The network is designed to be decentralized
- No central authority is responsible for orchestrating these hotspots and providing data services, instead, the rules for orchestration and data services are hard-coded into smart contracts that live on Helium’s blockchain
Epochs
There are 16 miners who are responsible for driving consensus forward at any period in time
Net emissions
Once all HNT is minted in 49 years, the protocol will still mint more HNT, but it won’t mint it on a predefined schedule
- Instead, it will mint new HNT based on how many data credits were used in a given epoch
- To mitigate that, the team decided that the amount of HNT that can be burned in any epoch will have a cap
