Can I mine crypto with radio? This startup says yes

Helium is building a blockchain-based “People’s network” that provides coverage for millions of Internet of things devices and rewards miners with its cryptocurrency.

Helium hotspot on the windowsill at an apartment. Image from Helium press kit.

What’s Helium?

Founded in 2013, Helium is a network built by users: anyone can join it by setting up a hotspot. And “mining crypto with radio” is in no way a clickbait - Helium hotspots are basically radio transmitters that operate on LoRa protocol running on the unlicensed 868 MHz (Europe) and 915 MHz (USA) band and can hear any data transmitted within that frequency. They provide coverage for IoT devices in return for HNT, Helium’s native currency. The cost of the community-approved hotspot model ranges from $500 to $1000.

Unlike many other cryptocurrencies that use the energy-consuming proof-of-work algorithm, the “People’s network” runs on the unique proof-of-coverage, proof-of-serialization, and proof-of-location. These proofs check whether hotspots provide network coverage and accurately represent time and physical geolocation in a cryptographically secure way. One random miner is regularly selected to challenge other miners and witnesses them complete the challenge. After the verification process, all participants receive HNTs.

5G alternative?

The total IoT market was worth around $390b in 2020 and is projected to reach $1 trillion by 2030. Modern cities use more and more various electronic and digital technologies to optimize and improve urban life. Environmental sensors, smart transportation, energy management are only some of the examples, and all of them need an internet connection to exchange data. Yet Bluetooth, Wi-Fi, or cellular networks are either too expensive, cover a limited range, or consume too much energy. The main option discussed for the smart cities is 5G, but Helium has a number of advantages over it. “People’s network” uses LoRa protocol and can transfer data over 200 times longer distances than 5G because it operates on a lower frequency. Moreover, LoRa devices are much more energy-efficient, running on one battery for up to 10 years, than the 5G device that would last only several hours.

Of course, Helium can’t entirely replace 5G - it’s designed mainly for trackers and sensors that transmit small bits of information and do not need to provide real-time data. That means the network isn’t compatible with high bandwidth devices like smartphones and computers. But still, two networks can function alongside each other, providing coverage for different types of machines and achieving maximum efficiency.

The future of “People’s network”

As long as over 60% of the top 100 cryptocurrencies have no utility, according to the Invest in Blockchain report, having the working product behind the project will be a strong bullish factor. In this regard, Helium additionally stands out as the fusion of software and hardware. Although unique and important, many blockchain projects are 100% digital and therefore operate on a higher level of abstraction. On the other hand, Helium is tangible, which makes it easier to comprehend for the people outside the crypto community.

Another factor that bodes well for Helium is its community. “People’s network” relies almost entirely on open-source code. Mining devices are non-proprietary. The band frequency it operates on is free from license fees, so it naturally attracts people from the DIY movement. Many of them contribute to the Helium software development, actively participate in discussions, and spread the word about the project.

However, there is always that one fly in the ointment, and Helium is no exception. “People's network” doesn’t always live up to its name. Although hotspots are non-proprietary, and in theory, you should be able to build one from scratch, you can’t mine HNTs with it. Helium’s earlier DIY program used to work via a coupon system. A new miner received a special code that allowed his device to join the network. Yet it doesn’t work that way anymore - a DIY hotspot can provide coverage but won’t get rewards. For me, that’s a big turn-off. The DIY is one of the core values of decentralization, but for some reason, Helium decided that hotspot manufacturers need to profit from the idea.

Anyways, I still think that Helium has the potential to revolutionize IoT and take it out of the hands of telecom giants. As anyone can connect their device to the network for less than $2 a year, Helium opens many opportunities to build DIY smart homes, weather stations, security monitoring systems, and more. I will continue to observe the development of Helium and hope it will become more DIY-friendly over time.