The Helium network is an application of cryptographic systems to provide an economic incentive for offering network connectivity. The actual physical network uses LoRaWAN (a trademark of the LoRa Alliance) to offer low-power connectivity at up to 27 kbps over traditional ISM bands. I’ve had past interests in exploring mesh networking, especially in disaster situations, so naturally, this piqued my interest.
The main networking device is the “miner” – an embedded radio-enabled device that generate Helium tokens (HNT, an original cryptocurrency on its own chain) through proof-of-coverage. In short, participants are rewarded for graph connectivity by being a “witness” to other participants receiving and answering periodic challenges, on top of being used as a hop for general messages. According to the COO, there are a staggering 150,000 of these devices on backorder.
However, pondering more about this network and the underlying token, what is the goal being achieved here? The idea being sold is to basically “expand the Internet,” but I see various shortfalls in its current mainstream implementation:
- LoRa is patent-encumbered. The value of these hotspots seems to be mainly derived from the licensing cost of these transceiver chips. For instance, the Nebra mining kit is comprised of a Raspberry Pi Compute Module ($25), a LoRaWAN concentrator (~$130), and a management software, sold for about $450.
In other words, participation is limited to those willing to pay for a special transceiver whose price is impacted significantly by lack of openness in the underlying hardware. That’s not a plus if you’re trying to expand a network.
- The bitrate of the protocol is insufficient for various embedded device/IoT applications, most especially cameras.
- Participants don’t seem to be rewarded for standby reliability. In other words, a node that offers a critical link between two segments seems to be rewarded just the same than for a node in a dense, well-connected region. The only additional reward comes if the critical node is well-utilized – but what if a critical message is expected only rarely? Nodes should be rewarded for being reliably online for a very long time. This incentive of standby reliability is necessary to trust the network in its fragile edges, especially in rural areas.
- Participation in the Helium network is not required to financially profit on HNT. One can simply buy and hold HNT as if it were any normal deflationary token.
- Long-range, low-bitrate mesh networking is already provided by APRS, a tried-and-tested solution of over 25 years. It’s also completely free to transmit a message over APRS. Although APRS is technically susceptible to flooding, this is no different from any signal jamming technique and LoRaWAN is also susceptible to it.
The real winners here have been the LoRa licensors, who have likely made great financial profit from what was intended to be an open decentralized network – and who likely have developed a vested interest in keeping the cash flowing.
However, let’s also keep in mind that the Helium network was not designed to be limited to a particular protocol or band. Where I see some potential is in its foray into the 5G sphere – even though I myself am skeptical on the industry hype for the past four years. If Helium can continue to position itself as an alternative mobile carrier, or as a provider of additional 5G coverage for mainstream carriers, it could set itself up for some major wins.
At that point, however, it would be subject to the same issues and limitations of conventional 5G already being rolled out by carriers, notwithstanding the patent encumbrance that also plagues 5G. And could the Helium network actually be trusted to offer a network at a price that rivals the existing market? The $1,000 – $5,000 price range of their 5G miners suggests that the costs of laying out a 5G network are still too steep to be taken on entirely by consumers.
Since I am already in doubt, if Helium is supposed to be decentralized, then why is its network only engineered to allow a handful of manufacturers to create miners that can access the mainnet, plus a $10 fee to register each device to the blockchain? (Who receives those $10 – or is it just burned?)
Like far too many cryptocurrencies, there is something here that reeks of a pump-and-dump scheme – and it’s not going to look good for those left holding the bag with their expensive radios.
Perhaps I’ll keep to watching the ham radio space and seeing what people do with it, since most people in that space are more interested in application and practice than financial motives.