Helium, the people powered network, started a (decentralised) wireless revolution in a category now called Decentralised Physical Infrastructure Network (DePIN) ten years ago. The first hotspots launched in 2019 and according to the website has since become “the world’s largest contiguous wireless network, with nearly 1 million Hotspots deployed in over 50,000 cities and 175 countries”. This project is an ideal example of how crypto incentives can bootstrap a network especially in regards to physical infrastructure deployment.
The green color hexagons below show the mapped areas around North West, Europe.
This project set out to revolutionise wireless coverage through the proof of coverage consensus protocol which essentially incentivises hotspot owners to deploy hotspots into areas where the network is lacking coverage. On the demand side, when IoT devices want to send data packages across the Helium network they need to convert a small amount of HNT into Data Credits (a fixed exchange rate to USD) which is subsequently burned.
The ultimate ‘cost’ may be equivalent if one considers how much profit has been made from hotspot owners by acquiring and selling tokens from the DePIN network side versus a traditional telecom provider who needs an extreme amount of CAPEX investment to setup cell towers… however, what is unique is that this DePIN model requires much less sophisticated hardware and the profits are democratically shared with a much larger share of ‘nodes’ (aka people).
Helium initially started by focusing on Internet of Things (IoT) devices such as smart meters and e-scooters by building out a LoRaWAN network. LoRaWAN is a low-power, wide area networking protocol built on top of the LoRa radio modulation technique. It wirelessly connects devices to the internet and manages communication between end-node devices and network gateways. This technology works better for this use case given the low energy requirements and simple hardware specs for the hotspots. The original hotspots were made with simple Raspberry Pi boards! The IoT focus also made sense given that IoT devices are not high value enough to connect to 3G/4G or wifi networks. If you have IoT devices in a smart city it would be very cumbersome to connect to Wi-Fi when setting up (large scale) infrastructure. Devices that move through the city (e.g. placed on trucks for cold freight monitoring) cannot afford to pay for separate cellular plans to use satellites to deliver wireless coverage.
Since the COVID lockdowns led to huge backlogs in supply chains and slow growth on the demand side of the network Helium shifted into 5G networks as well with a partnership with T-Mobile and migrated to the Solana blockchain (previously running their own blockchain). Nevertheless, even with massive changes, the outlook of the IoT and DePIN market look strong as ever.
As Jake Dwyer from Factor Capital wrote:
The IoT market is forecasted to reach $1.39 trillion by 2026. IoT data onramps can feed real-time information from smart appliances, vehicles, and homes into blockchain networks. Coupled with transactional data from everyday activities, this opens up avenues for predictive consumer behavior models, fundamentally altering sectors like retail and utilities.
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In these new markets, demand is already well established from prior industry models, and supply has historically been prohibitively expensive from a capital expenditure point of view for incumbent industries. Examples include 5G microcells, drone imagery, and renewable energy deployments, to name a few. As each new vertical is tested here, industries emerge on top of the successes and will create whole new categories of economic participation; the same way gig workers benefited from the “Uber-fication” of everything over the past decade.
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DePIN Oracles
Given the last post was on Chainlink and DONs, Helium is the ideal next project to write about as Chainlink’s and Helium’s infrastructure/networks seem to be ideal companions to me. Chainlink DONs have cracked the code on coming to consensus and writing data on-chain if its purely digital data (e.g. financial). However, to break into the next markets that rely on data coming from physical events it seems logical that one would need DePIN DONs. Why? Well its the same reason DONs came about in the first place… to decentralise and remove the single point of failure of the data source. Now when one has an on-chain insurance contract being triggered by a single IoT or satellite sensor it becomes the point of failure for the whole insurance system. If one would leverage Helium’s DePIN network this could be mitigated.
So, what is the future of the Helium ecosystem? Use cases of the IoT network include sensors on: dog collars, e-scooter and bikes, drones, smart bins, ERP systems, sound/air pollution, flood levels, cold chain monitoring, smart irrigation, smart parking, cattle tracking, and asset tracking. There are a plethora of other traceability solutions many of which have already been piloted. You can have a look at their website on who they currently partner with.
The key to unlocking the market where sensors are ‘securing value’ is to have multiple tamper proof sensors tracking a single data point. This along with Chainlink CCIP would create the world of smart contract based (for example) insurance products that one can only dream of today.
Lastly, a third pillar of wireless networks (along with IoT and 5G) that interest me for Helium would be decentralised VPNs.
Helium has clearly been a trailblazer in DePIN and DeWI network bootstrapping which we are now seeing being copied by projects such as Filecoin, Akash Network, and Hivemapper to name a few. Hivemapper’s deployment again is a story of incredible growth… stats below are within the first 8 months of deployment:
As usual, read the Helium Whitepaper and Documentation to learn more about the project. If you are looking to understand more on the tokenomics I recommend checking out the following two reports from Multicoin and Messari.