Helium Network is a blockchain-based protocol focused on providing connectivity for Internet of Things (IoT) devices.

Helium enables wireless communication and data transmission between devices through its blockchain network and the LoRaWAN protocol, a media access control layer protocol. These devices operate through nodes (hotspots), which can also transmit data through a network of nodes. In the Helium ecosystem, these nodes represent a combination of blockchain mining equipment and wireless gateways, also known as "hotspots". As of now, Helium has expanded to have more than 393,000 hotspots, becoming one of the major LoRaWAN networks in the world.

By leveraging wireless devices, i.e., hotspots, Helium allows anyone to own and operate a wireless IoT network. This network uses a unique consensus algorithm, Proof-of-Coverage (PoC), which not only ensures the efficient operation of IoT devices, but also promotes the construction of decentralized network infrastructure.

Helium uses its own cryptocurrency, the HNT token, to reward mining nodes in the network. Notably, Helium miners mine HNT tokens by providing network coverage, using radio frequency signals rather than computing power, which is common in other blockchain systems.

How it works

In simple terms, Helium relies on the support of its community of node operators to operate. These node operators operate devices called hotspots. Hotspots are basically hardware miners that mine HNT tokens by helping to protect the network. This consensus mechanism is called "Proof-of-Coverage" (PoC), and it helps protect the Helium blockchain.

The mining equipment is based on LoraWAN, a cloud-based open source protocol for connecting IoT devices. Due to their low power capabilities, they are well suited for IoT devices. And, because LoraWAN uses radio frequencies, its range far exceeds the range provided by WiFi. (Although it sacrifices packet size.)

Core Mechanism

LoRaWAN (Long Range Wide Area Network)

LoRaWAN (Long Range Wide Area Network) is the core communication protocol used in the Helium network, providing long-range, low-power wireless connectivity for Internet of Things (IoT) devices. LoRaWAN is an open source protocol based on LoRa (Long Range) technology. LoRa uses spread spectrum technology to enable communications with longer transmission distances and better penetration. The LoRaWAN protocol manages the network layer of these communications, including device access, data transmission security, and network management.

Main features

Long-distance coverage: can reach from several kilometers to tens of kilometers, depending on environmental conditions.

Low-power design: the device can operate for several years in low-energy mode.

Large capacity: a single LoRaWAN gateway can handle data from thousands of terminal devices.

Security: data transmission is secured through encryption and authentication.

Role in Helium

In the Helium network, LoRaWAN is used to connect a wide range of IoT devices, such as environmental monitoring sensors, smart agricultural equipment, etc. By deploying LoRaWAN-compatible hotspots at home, business locations, or public spaces, users can create wireless networks that cover a specific area.

LoRaWAN's network architecture

Terminal devices: These are IoT devices deployed on-site, responsible for collecting and sending data.

Gateways (hotspots): These devices receive data from multiple terminals and send data to network servers. In the Helium network, these hotspots also act as nodes of the blockchain.

Network server: In Helium, the role of the network server is distributed by the blockchain network, handling the routing of data and managing the security of the network.

LoRaWAN provides security protection at two levels:

Network layer security: Use a unique network key (Network Session Key) to protect the integrity of data packets.

Application layer security: Use the application key (Application Session Key) to encrypt end-to-end data content.

Challenges and advantages of LoRaWAN

The challenges faced by LoRaWAN in Helium include network management and optimizing coverage, especially the signal interference problems that may exist in urban environments. However, its low cost, wide coverage and low power consumption make LoRaWAN an ideal choice for connecting large-scale distributed IoT devices.

In short, the application of LoRaWAN in the Helium network not only expands the connectivity of IoT devices, but also provides participants with the opportunity to mine and earn HNT tokens by maintaining and expanding this network, thereby promoting the development of a decentralized IoT network maintained by users.

Hotspots

In the Helium network, hotspots are key hardware devices that connect and expand the network. These devices are not only access points for Internet of Things (IoT) devices, but also nodes of the blockchain network, with multiple functions and purposes.

Function and composition

A hotspot is a physical device that combines wireless transmission technology with blockchain technology. Each hotspot contains the following core components:

Wireless transmission module: uses LoRaWAN technology, a long-distance, low-power wireless communication standard suitable for sending small data packets.

Central processing unit (CPU): handles data verification, encryption and communication tasks.

Storage device: used to store network data and blockchain information.

Antenna: Receives and transmits wireless signals to enhance the communication range and quality between devices.

How it works

Hotspots work in the following ways:

Data transmission: Hotspots allow IoT devices to connect to the Internet through LoRaWAN, transmitting data such as weather information, location tracking, etc.

Blockchain mining: Hotspots participate in the Helium network's "Proof-of-Coverage" (PoC) consensus mechanism and earn HNT tokens by verifying the signal coverage of other hotspots.

Network expansion: More hotspots joining the network can expand the network's coverage and improve the density and quality of the network.

Mining and Incentives

Hotspot owners participate in the maintenance of the network by installing and running hotspots, and are rewarded with HNT tokens. Mining income depends on multiple factors, including the geographical location of the hotspot, the activity in the network, and the mutual verification activities between hotspots.

Installation and Maintenance

Installing a hotspot is relatively simple, and users only need to connect the hotspot to a power source and the Internet. Hotspot maintenance mainly consists of keeping the device running normally and ensuring that its software and security features are updated in a timely manner.

Network Security and Privacy

Helium protects the security of data transmission through end-to-end encryption, ensuring the privacy and integrity of data during transmission. Communications between hotspots are also protected to avoid unauthorized access and data leakage.

In general, hotspots are the cornerstone of the Helium network, enabling the network to provide low-cost, high-efficiency connection services to a wide range of IoT devices. Through its unique technology integration and incentive mechanism, the Helium network aims to provide a powerful and reliable wireless coverage solution for modern IoT applications.

Proof-of-Coverage

Proof-of-Coverage (PoC) is a consensus mechanism in the Helium network that verifies whether hotspot devices actually provide network coverage. This mechanism is designed to ensure that each hotspot in the network effectively provides wireless network coverage, thereby promoting the reliability and availability of the network.

Working Principle

Coverage proof is carried out through the following steps:

Challenge: A hotspot device (challenger) sends a signal challenge to other nearby hotspot devices (challenged). The challenger selects one or more challenged and requires them to respond to the challenge within a certain time.

Response: The challenged must successfully receive the signal sent by the challenger within the specified time and send a response signal back to the challenger to prove its location and signal coverage.

Verification: The challenger verifies the accuracy and timeliness of the response signal. If the challenged successfully responds to the challenge, the challenger will believe that the challenged provides effective coverage.

Incentive Mechanism

Hotspot devices participating in the proof of coverage have the opportunity to earn Helium network native tokens (HNT) as rewards. Depending on the level of participation and network coverage, hotspot devices can receive different amounts of rewards. This incentive mechanism encourages hotspot device operators to actively provide and maintain network coverage, thereby promoting the expansion and development of the network.

Key Features

Decentralization: The implementation of the proof of coverage mechanism is carried out in a decentralized manner, and there is no single centralized entity controlling the verification process.

Real-time: The challenge and response process is carried out on a real-time basis, requiring the challenged to respond to the challenge within a specified time.

Blockchain Integration: The results and reward records of the proof of coverage will be recorded on the Helium blockchain, achieving transparency and traceability of the behavior of network participants.

Application scenarios

Coverage proof is of great significance in the following scenarios:

Network expansion: Through the incentive mechanism, coverage proof promotes the deployment of new hotspot devices, thereby expanding the coverage and density of the network.

Network maintenance: Regular coverage proof can ensure that hotspot devices in the network continue to provide effective coverage and maintain the stability and reliability of the network.

Challenges and advantages

The challenges faced by the coverage proof mechanism include network instability caused by factors such as signal interference and changes in the geographical environment. However, its advantage is that through the incentive mechanism, it effectively promotes the deployment and maintenance of hotspot devices, laying a solid foundation for the development of the Helium network.

In general, proof of coverage is one of the core mechanisms in the Helium network. By verifying the network coverage of hotspot devices, it ensures the reliability and availability of the network, while providing rewards and incentives to participants, promoting the continued development and expansion of the network.

HNT Token

HNT tokens are the native cryptocurrency of the Helium network, used to incentivize and reward individuals and businesses that participate in building, operating and maintaining Helium's decentralized wireless network.

Token Supply

The initial total supply of HNT is set at 223 million, but in fact its supply will change with the token issuance and destruction mechanism in the network protocol. 35% is used for the development and support of hotspot infrastructure, another 35% is reserved for Helium and its investors, and the remaining 30% will be used to support the cost of network data transmission. As of this writing, there are 160,875,442 HNT in circulation.

Helium Network employs a dynamic token supply model that includes periodic token halving events, similar to Bitcoin's halving mechanism. The Helium issuance proposal proposes to halve the net HNT issuance every 2 years after the genesis block. The first halving occurred on August 1, 2021, reducing the net HNT issuance to 2.5 million HNT per month. However, the allocation to HNT miners did not change from the proposed schedule. This situation results in a theoretical maximum supply of 240 million HNT. However, due to the slow block times in the first year after genesis, the minting of HNT was lower than the planned 60 million. As a result, this resulted in a reduction of approximately 17 million HNT, bringing the true maximum supply to 223 million.

Economic Model and Token Circulation

HNT's economic model also includes Data Credits (DC), a stable value token used to pay for network transaction fees and data transmission fees. Users must "burn" HNT to convert it into DC to use network services, a process that permanently removes the corresponding HNT from circulation

Obtaining HNT

HNT is mainly obtained through mining, where "mining" actually refers to providing network coverage and transmitting data by running Helium hotspots. Compared with other cryptocurrencies, the HNT mining process is different, and it requires high-end GPUs (graphics processing units). Therefore, you don't need to pay expensive electricity bills or make complicated settings to start mining HNT.

Data Beacons: Hotspots earn HNT for transmitting device data.

Proof of Coverage: Hotspots earn HNT by participating in PoC challenges to prove their wireless coverage.

Unlike other cryptocurrencies that use the traditional Proof of Work consensus mechanism, Helium uses an advanced PoC based on the BFT (Byzantine Fault Tolerance) protocol. It requires miners to verify that their hotspots provide wireless coverage.

To start mining, you need special LoRaWAN transmitters and place them in high places like rooftops or balconies. Bobcat Hotspot Miner, Rakewireless Hotspot Miner, and Nebra Helium Indoor Hotspot are some of the compatible devices for mining HNT. People can download the Helium app and activate the hotspot to start mining.

In addition to mining, HNT can also be purchased and used on trading platforms/exchanges such as Binance, WazirX, Uphold, etc.

Team/Partners/Financing

Helium was founded in 2013 by Amir Haleem, Sean Carey and Shawn Fanning. Amir Haleem has extensive work experience in the video game development and export industry, while Shawn Fanning is famous for developing the music sharing platform Napster. Therefore, the Helium team is composed of professionals with extensive experience in manufacturing, blockchain technology, radio and equipment, peer-to-peer, decentralized systems, etc.

History Highlights

Between 2015 and 2019, the company successfully raised more than $53 million through four different financing activities.

In 2029, when the Helium network is officially launched, it has set a mission to solve current challenges in the field of the Internet of Things, especially those related to user privacy.

In July 2020, the company launched its first hotspot in Europe, deploying a dozen devices in Lyon, Paris or Chambery.

Experiencing a massive boom in early 2021, by January, the number of hotspots worldwide increased from approximately 10,055 to nearly 1 million.

On March 30, 2022, after Helium Inc. received a $200 million Series D financing led by several venture capital funds such as Andreessen Horowitz (a16z) and Tiger Global, the founders renamed it Nova Labs.

According to the protocol's analytics platform, Helium Explorer, as of June 2022, there are more than 850,000 hotspots in operation in 177 countries.

In 2023, after a community vote, Helium will migrate its hosted network to the Solana (SOL) blockchain, with the official transfer taking place on April 18, 2023.

Future Development Analysis

The future development of Helium Network can be analyzed from its unique business model, technological foundation, market acceptance, and the overall trend of the cryptocurrency market. The following is a future development analysis that takes the above factors into consideration:

Technology and Business Model

Helium Network occupies a special position in the crypto market by providing decentralized Internet of Things (IoT) data transmission services. Its business model revolves around LoRaWAN technology and the Proof-of-Coverage (PoC) consensus mechanism, which aims to create a widespread wireless network operated by users. This model has the following potential:

Scalability: With the increasing popularity of IoT devices and the development of 5G technology, the demand for low-cost, wide-coverage network services will continue to grow. Helium Network provides such services with relatively low deployment costs.

User Incentives: By providing incentives to network contributors through HNT tokens, Helium encourages users to deploy and maintain network hotspots, which helps the rapid expansion of the network.

Decentralized Advantages: Compared with traditional centralized network service providers, Helium's decentralized network is less susceptible to single points of failure, which increases the resilience and reliability of the network.

Market and Economic Impact

Market Acceptance: Because Helium's network services are directly targeted at the rapidly growing IoT market, its success will depend in part on the speed and scope of market demand for IoT connectivity.

Token Economics: The market performance of the HNT token is closely tied to the use of the network. If the network successfully attracts more users, the demand for the token will increase, which may increase its market value.

Regulatory Environment: Changes in regulatory policies may have an impact on the future development of the Helium Network and its tokens. A strict regulatory environment may limit the expansion of the network or affect the liquidity of the tokens.

Continuous Innovation and Collaboration

Technological Development: The future development of the Helium Network requires continuous technological innovation to meet market needs and technical challenges, such as improving the network's data transmission capacity and security.

Partnerships: Collaboration with the industry can help Helium expand the application scenarios of its services and attract more users and developers to participate in its ecosystem.

Competition and Risks

Market Competition: Other blockchain and traditional companies are also working on IoT network services, and Helium needs to maintain its technological advantages and the attractiveness of user incentive mechanisms to maintain its market position.

Price Volatility: Like all cryptocurrencies, HNT's price fluctuations may have an impact on the confidence of network participants and the perception of investors.

In summary, Helium Network has significant growth potential in terms of technological innovation, market demand and user base. However, future development also faces risks such as regulation, market competition and technological challenges. The key to success may lie in whether it can continue to expand the network, continue to incentivize user participation, and maintain its technological leadership.