Mindblowing Project!! HNT Potential?
Helium Coin – Cryptocurrencies are based on decentralization, but none of them currently offer it. We interact with cryptocurrencies through centralized networks, as centralized service providers own and operate them. Cryptocurrency can be used to create decentralized peer-to-peer networks, and this is the simplest way to solve this problem.
Let me tell you how Helium is achieving just that, and why peer-to-peer 5G could make HNT an extremely valuable cryptocurrency.
The Helium coin energy company was founded in 2013 by Sean Carey, Shawn Fanning, and Amir Haleem. In its brief three-year existence, Napster amassed over 27 million users and Shawn Fanning, under his first name, was the co-founder.
The reason for Shawn’s advisory role with Helium is likely because he is working on half a dozen other startups at the same time.
Until stepping down in 2015, Sean Carey was Helium’s CTO and a seasoned systems architect. I could only find Sean’s Hardwired NYC presentation on Helium, so I recommend watching it if you have a few minutes.
Game designer and professional gamer Amir Haleem was once considered the best Quake player in the world.
In addition to his role as CEO of Helium coin, he is a dedicated crypto punk. In 2005, Amir met Napster Shawn for the first time, and over the years, they talked many times about Helium. With wireless networks, they sought to recreate the peer-to-peer model of Napster without the risk of being shut down by the government for violating copyright laws as Napster had been.
They initially hoped to target the telecom industry. However, they realized that the bureaucracy would make it incredibly difficult and that the existing players possessed too much financial and political power to do it.
As wireless devices became more and more common, the concept of the internet of things or IoT was gaining popularity. Using sensors, the Internet of Things (IoT) extracts data from the real world. It has become the buzzword of all buzzwords these days. Besides laptops, mobile phones, parking meters, and dog collars, these sensors are also found in many products.
IoT projects were unsuccessful for some of Amir’s friends. A centralized IoT infrastructure was no good for companies because it made no economic sense.
Helium is based in the United States, where there is no licensing or regulation attached to low-frequency technology used for IoT. As a peer-to-peer network, IoT was the ideal application for Helium.
Unfortunately, Helium coin did not have a way to incentivize people to set up peer-to-peer IoT networks, which caused the project to stall. Nevertheless, as cryptocurrencies gained popularity in 2016, Amir realized that they could be the right motivation.
Filecoin (FIL) white paper inspired Amir to bring the team together in 2017, and they began working on Filecoin (FIL).
It was announced in June that Helium had developed its first hotspot device – a peer-to-peer IoT platform for peer-to-peer communications.
A month after its launch, Helium launched its mainnet and launched Helium Coin, which would offer incentives for users to join the new decentralized network. What does Helium actually do?
How Helium Works?
There are three basic components of Helium coin.
A Helium hotspot is like a router that you plug into a network. Helium hotspots use long-range wireless signals similar to the radio instead of wi-fi.
In comparison, most Wi-Fi routers have a 50-meter range and Helium hotspots can span dozens or even hundreds of kilometers. Any Helium hotspot-enabled device that falls within the range of a Helium hotspot can now transfer small packets of data reliably.
Since Helium hotspots operate at a low signal frequency, they consume next to no energy and have little impact on the devices they communicate with.
The best thing about Helium hotspots is that all the instructions are open-source, which means you can make one from scratch if you want to.
More than 13 companies have successfully mass-produced hotspots with Helium coin since its launch in December 2020. Using the Helium network’s hotspots, developers can request data from any device that is connected to the internet, as long as it falls within its range.
Using Helium-compatible devices allows individuals and organizations to perform tasks like supply chain management, and Lime’s status on electric scooters can be tracked. Helium’s online platform can access, request, and manage that data and can easily be integrated with popular platforms like Google Drive and Microsoft Azure.
With the Helium blockchain, data can be fetched from Helium hotspots at a cost in cryptocurrency.
The Helium Blockchain
Helium uses a novel consensus algorithm called Honey Badger BFT, which was specifically designed to deal with intermittent network connectivity.
Helium hotspots aren’t always available, so this is necessary. A Helium hotspot, which is part of the consensus group, could also become unavailable during a block validation.
Honey Badger BFT is Helium’s primary incentive structure, but there is a secondary mechanism called Proof of Coverage (PoC), which is a sort of secondary consensus mechanism.
In order to prove coverage, Helium hotspots are checked to see if they broadcast a long-range signal.
Helium hotspots within the range of the challenged Helium hotspot are randomly selected to conduct the test. By doing this, network participants increase the chances of their hotspots having overlapped signal ranges. The rewards for a hotspot that is isolated can still be earned, however, not as much.
Helium hotspots that pass a proof-of-coverage challenge earn a share of block rewards, both for the challenger and for the challenge. A proof-of-coverage challenge takes place around the world every second.
Helium hotspot hosting is quite lucrative due to the high percentage of block rewards allocated to Helium. Helium hotspots, which number over 200,000 to date, are a result of this.
Helium hotspots are not the only recipients of block rewards; there are also two other sets. These are Helium validators and Helium nodes.
Validators are a recent addition to Helium, and they were introduced to ensure that hotspots could effectively participate in the Honey Badger consensus process due to the rapid growth of the Helium network.
Validators are required to stake exactly 10,000 Helium net dollars, or nearly 200,000 at the time of the shoot. There is no delegation or stake below 10,000 HNT.
With the highest staking reward of 360% per year, staking rewards vary based on the amounts staked.
The 10,000 HNT validators staked have a five-month unlock period, so they can withdraw their staking rewards every fifteen minutes.
In the absence of validators, block rewards will decrease, as will penalties for failure to stay online. The slashing technique is not among them yet, at least not yet.
Helium has attracted more than 2,700 validators with a staking rate just below 7% per year despite these high barriers to entry and harsh conditions.
Helium investors and Helium Inc., Helium Inc.’s software company, are the third group that earns Helium block rewards and HNT takes advantage of that to introduce its tokenomics program.
Helium is a blockchain-based cryptocurrency created by the Helium Project. There was no pre-mine and no ICO for HNT, which has a maximum supply of 223 million.
Since HNT supply was initially zero, 120 million HNTs were minted in the first two years. Recent halving events reduced Helium’s emissions by half, from 60 million in 2007 to 30 million in 2008.
By cutting the emission in half every two years, HNT’s supply will be reached in about 50 years if current growth rates continue.
Helium hotspots, Helium Inc.’s validators, and investors are distributing newly minted HNT to the three categories. Over time, these participants will earn a different percentage of newly minted HNT.
Helium hotspots will get the lion’s share of the HNT given to the investors and proof of coverage rewards, with less going to team investors and investors in proof of coverage.
Helium Inc did sell security tokens to investors, even though there was no ICO for HNT. Token holders receive HNT rewards based on the number of security tokens they hold.
In this particular case, Helium inc would receive 17.5% of the newly minted HNT if it holds 50% of Helium’s security tokens. In all, there are currently 35% allotted to that part of the block reward pie.
Helium has successfully raised more than 145 million dollars through token sales without holding any ICOs. Their investment is a security token that is guaranteed to provide them a share of future block rewards.
Adding to the craziness, network fees aren’t paid with HNT. Helium coin charges for all transactions in data credits, for example, when retrieving data from devices connected to Helium hotspots. HNT can be used to create data credits, and data credits are pegged to the U.S. dollar-based on a 100 000 to 1 ratio.
Thus, burning one dollar in HNT creates 100,000 data credits. It is not possible to convert data credits back to HNT. Deflation continues to be a key characteristic of HNT. Recently, the Helium community passed a motion allowing net emissions as an incentive for Helium network participants after the last HNT coin has been mined.
A small portion of data credits was converted into HNT and then used to calculate net emissions. Emissions currently amount to 1% of GDP per year and are likely to increase when demand for data credits decreases and decrease when demand for data credits increases. In this case, I believe the answer to the question of how HNT’s elaborate tokenomics will affect its price is quite obvious.
HNT Price Analysis; Helium 5G
In April, the Helium community voted to support 5G infrastructure, and the uptrend for HNT accelerated.
Several factors contributed to the spike in HNT in August after a few quiet months. August 6th was the day of the HNT halving. Helium announced at the end of August that Andreessen Horowitz led a major venture capital financing for HNT, which totaled over 111 million dollars. Alameda Research was also a part of the round.
FreedomFi announced on August 31st that it’s Helium hotspots would support 5G technology. It was just a few days ago that FreedomFi delivered the first 5G Helium hotspot, and the company hopes to have installed 20,000 5G Helium hotspots by the end of the year.
Helium has onboarded more than 150,000 hotspots for its IoT network in less than a year, which indicates that its 5G network will likely grow at least as exponentially.
There is only one reason why 5G hasn’t reached mass adoption yet, and that’s because the demand for 5G couldn’t possibly be higher. IoT infrastructure is experiencing the same bottlenecks as centralized 5G infrastructure, according to Helium founder Amir Haleem.
If you aren’t aware, 5G signals have a relatively short range, and these signals are easily disrupted. In some cases, even a small amount of humidity can cut off a connection. 5G isn’t going to be used without installing 5G towers on every single home. But setting up a centralized infrastructure in this manner is prohibitively expensive.
In order to reach this goal, Helium wants to provide passive income to people who run their own 5G towers. Using HNT credits to pay for this 5G connection will drive up the demand for HNT since the money is derived from HNT.
Helium could become an integral part of the 5G infrastructure of legacy internet service providers, as Amir recently suggested, which would negatively impact the demand for HNT. Now HNT could easily 10x within the next year, assuming the crypto market continues rising. With a market capitalization of under 2 billion, it is no wonder that HNT could soar far beyond the moon.
Helium has a long list of milestones besides 5G in the pipeline. The Helium GitHub repository contains these as changes or improvements to Helium.
Helium Coin Roadmap
A few hips are worth mentioning among the dozen that are being discussed now.
A hip 24, for instance, seeks to introduce Helium’s block reward splitting feature. By controlling multiple wallets, Helium hotspots can distribute their HNT rewards instead of simply one.
Secondly, Hip 31 proposes using HNT tokens to implement on-chain governance. If you have the time, I recommend reading the proposed governance mechanism.
Third, hip 33 wants Helium to adjust the hot spot rewards based on various regulations, rules, and network resources around the world, which is arguably required.
One more hip that deserves to be mentioned is hip 34, which calls for Helium to mask the validator locations due to the fact that the IP addresses are broadcast to the public, which raises security concerns to me.
Fifth, Hip 37 seeks to adjust Helium’s block rewards to ensure that the rewards are sufficient to motivate and compensate hotspots who run other networks, such as 5G.
In addition, Hip 38, which offers Helium the possibility of validators becoming oracles for HNT data credit conversion rates, something that is currently handled by only nine oracles, deserves special mention.
Hip 39, the seventh noteworthy hip, proposes splitting up one HNT into 1000 new ones by multiplying it by 1000.
Redenomination is a practice that tends to increase prices, so that should be taken into consideration. I am concerned about Helium’s exponential growth because there does not seem to be a scaling solution available for its blockchain.
Even with Helium’s incredible capabilities, legacy network providers do not lack competition. Starlink, SpaceX’s plan to make the Internet available to everyone on earth, is the elephant in this room.
Make sure you do the proper research before investing in cryptocurrencies, and you should consult a crypto expert for advice. In the cryptocurrency market, everything can happen because of its volatile nature. It is all a prediction and assumption based on the fact that crypto markets transform over time.