An Update on the Helium Network
Aug 3-2022 - 10 min read
We founded Helium to build an open, affordable, and secure global wireless network owned and operated by everyday people: The People’s Network. Toward this goal, building out an expansive network infrastructure was the first step in our journey. And we knew it wouldn’t happen overnight.
We’re just three years into this, which is a relatively short time period when taken in the context of our ultimate goal. Still, we’ve already seen successful use cases for both large and small scale demonstrations of what a people-powered Network community can become.
Recently, however, questions have come up about how the Network works, progress on the Network and what’s next, and I’d like to address these concerns directly.
Pilot Program Use Cases
Over the last week, two brands stated that they had not worked with Helium. In both cases, we had participated in pilot programs to test how their devices could connect and be tracked using the Helium Network.
Prior to mentioning these brands publicly, we received approvals to talk about the use cases — which I explain in greater detail here on Twitter. In the case of Salesforce, we even had written confirmation and a testimonial provided that we could use publicly to describe our work together.
Approved Statement From Salesforce:
What is our use case?
Salesforce welcomes thousands of new employees every year and making them feel a part of our family as a company is a key element of our onboarding program. During that process when employees have a chance to get involved in employee equality groups and learn about other resources at their disposal, they can often feel overwhelmed. Adding more emails or steps to get connected introduces more friction than we’d like for new employees who are learning about their job and the company in this period. In a limited pilot, we’re using an IoT device to allow employees to sign up with a swipe of their badge so they can stay focused on the connections they’re building with other employees.
Why did we choose Helium for this?
A core value of our company is Trust and although IoT devices are fun to build it can be difficult to secure these devices due to their smaller form factor and the complexity of endpoint management. The ability to focus on innovation quickly in our devices knowing that the transit of messages is secure lets us continue work on this effort without a large team. Helium provides the right mix of low power, high security, and robust coverage in urban locations that we’ll need to grow this program further.
In retrospect, relying on this statement wasn’t enough and the fault was on us for continuing to include these brands’ logos on the website. We value our partners and they are each essential to helping us build and grow the Network. Our intent was never to mislead our community or partners and we apologize.
Looking ahead, we’re making changes to ensure that our partners feel confident in the extent of our public relationship. We have hundreds of agreements in place with companies deploying devices on the Network and will ensure our process will apply to all of them — old and new.
At Nova Labs, we also recently hired a new General Counsel, CFO, as well as partnership/sales executives to support our growth and communications, and having them on our team will enable us to see this through.
The Helium Network in Action
If you’ve been in the blockchain space for any amount of time, you’ve inevitably heard some people ask “what’s the use case?” Or, “does this really solve a real world problem?” Or, “How does this make money?” These are good questions to ask. A dose of skepticism is healthy, and is an important sign that an industry is being taken seriously.
Recently, there has been discussion about who uses the Network and how it works. I’d like to clarify a few things based on the questions we’ve been hearing.
We intend to update this blog as more questions come up and will mark which answers are new as added.
Q. What is Helium?
The Helium Network is a decentralized wireless network, owned and operated by people around the world.
Q. What’s the relationship with the Helium Foundation and Nova Labs?
The Network is governed and maintained by the community-run non-profit organization the Helium Foundation.
Nova Labs, Inc. (formerly Helium Systems, Inc.) is the original founding team behind the Network and continues to be a core contributor to the Network, supporting the core development of the blockchain and driving usage of the Network.
Q. Who uses the Network? What are the use cases?
Since launching the Network in 2019, our community has deployed nearly 1 million hotspots, becoming the fastest-growing wireless network. In this short time, leaders like DISH, GigSky, Actility, Senet, Techtenna and more have joined the ecosystem.
We’re also seeing new applications emerge like Airly, Nanothings, LYNX and every day we’re inspired by the use cases we see such as M3 Agriculture Technologies’ using drones to fight food insecurity, Binary Beer’s craft beer inventory management, or how SECURE Tool designs and manufactures IoT solutions for security, transportation, home, ag, and health tech.
In addition to corporate customers, community members continuously find new and novel ways to leverage the Network. Climate-related use cases, such as these, are not only compelling arguments for the value of the network, they are also something we’re extremely proud to see.
The ways people all around the world are tapping the Network never ceases to amaze me. In the Czech Republic, a group of amatuer triathletes use the network to track the location of their bikes. In the UK, a farmer uses the sensors linked to the network to monitor drinking water levels for his livestock.
We believe the best applications are yet to come and the IoT Network is just the first of many protocols our Network of Networks will support. We’ve just begun our 5G roll out, and have some exciting news in the weeks and months ahead on that front.
Q. How does the company make money?
The Helium Network is a public, decentralized wireless network available for any company to use. In order to use the Network devices need data credits to pay for data transfer. The Helium Foundation is a nonprofit entity focused solely on the expansion of the Helium ecosystem.
Nova Labs is a separate for-profit entity funded by venture capital to continue to innovate and expand the application of the Helium network for IOT and beyond such as 5G, Wifi, VPN and more. Nova Labs’ revenue is not equal and not related to Network revenue, and we’ll be announcing some of our new revenue-generating products and initiatives later this year.
Q. How viable is the IoT and LPWAN market?
There have been questions about how viable the larger IoT and Low Power Wide Area Networking (LPWAN) space is, and whether revenues from such a network could support the Hotspot operators who have contributed to building it so far. IoT Analytics shows that the global IoT market grew 18% to over 14.4 billion connected devices in 2022.
We’re also not alone in trying to solve IoT networking needs, as evidenced by Amazon launching their competing Sidewalk network last year and every major global carrier launching NB-IoT and LTE-M networks.
Q. What are Data Credits and what does it mean that DC revenue in June was $6,651?
Data Credits are used by IoT and 5G devices to pay for coverage on the Network. A recent article states that Data Credits used in June were $6,561 when converted in fiat.
To be clear, that figure is not representative of the Network’s total revenue, which exceeds $54 million over the Network’s lifetime and is up 700% in the last year — according to Token Terminal. Total revenue comes from a variety of fees which include data packet transfers, sensor address reservations, organizational routing, transferring HNT, adding Hotspots, and changing Hotspot locations. Helium has been consistently in the top 10 for layer 1 blockchain revenues, and frequently in the top 5, again using publicly available data from Token Terminal.
The number quoted on Twitter only represents the amount generated from the 650M data packets that were sent over the network in a specific month. Per day, the Network is moving 22 million+ data packets from devices connected, which in IoT terms is pretty substantial for sending very small bits of data compared to something like data sent via LTE networks.
For comparisons sake, it would cost $29.3M per year for the same number of devices to send the same amount of data using a traditional NB-IoT cellular network. That Helium is 360x cheaper is a feature, not a bug.
Q. How do third-party Hotspot manufacturers get approved in the ecosystem?
Originally, Nova Labs (Helium Inc. at the time) was the first manufacturer of Hotspot Miners via a partnership with RAKwireless. In January of 2021, the Helium community of Hotspot owners, validators, and developers passed Helium Improvement Proposal (HIP) 19, allowing additional third-party manufacturers from around the world to have the opportunity to produce, sell, and compete on differentiated hardware that can serve the Helium Network in new and different ways. The purpose of HIP 19 was to help expand the network and create new offerings that would ultimately benefit customers and unlock new applications for the Helium Network. The proposal was an incredibly important step forward for the Helium Network, one that allowed for the rapid expansion of the Network’s capacity to grow super-linearly. It also furthers decentralized and democratized participation in the Network, ultimately continuing to fuel the Network growth loop.
Third-party manufacturers can only be approved by the Helium community via vote. Similarly, the Helium community has the sole power to cease issuing codes to a manufacturer, in essence “revoking their license.” Currently, there are 28 manufacturers that have been approved by the Helium community, and 2 have been suspended.
Q. Why are there Hotspot delays and what is the ecosystem doing about that?
Global supply chain issues are disrupting every industry, hotspot manufacturers are not immune to those issues and it has unfortunately resulted in shortages/delays in hotspot miner production. All Hotspot manufacturers are approved by the community through Helium Improvement Proposal 19 (HIP 19), without the involvement of Nova Labs.
We acknowledge that Hotspot miner shortages have slowed the growth of the Helium Network overall and we share the frustration that this has brought to the Helium community. If community members are dissatisfied by a particular manufacturer, we encourage them to propose revoking their title as an approved manufacturer.
Q. Does Nova Labs really receive a fee or kickback for every Hotspot sold?
No. Nova has never received any fees of any kind from third-party Hotspot manufacturers, and any blockchain-related fees are burned on-chain and not received by Nova either.
Q. Are the new 5G Hotspots provided by FreedomFi 5G or 4G LTE?
This is a question best directed to FreedomFi, makers of the 5G Gateways, and they offer a detailed explanation on their site about how it works. Later this year, the new MNTD 5G Hotspot supports 5G NR and they’ll have more to share on that soon.
“From FreedomFi’s website: Is this 5G or LTE?
This is not a black or white answer. 5G is an architecture standard for cellular wireless networks that covers:
Architecture of the software (aka the network core);
Architecture of the radio hardware
Contrary to the common belief, 5G is not specific to a frequency band and is not the same as high frequency mmWave. 5G uses much of the same frequencies as LTE.
With the Helium 5G rollout, we use the CBRS spectrum (aka mid-band 5G spectrum) and provide a 5G-compliant architecture for the network core that runs on a FreedomFi 5G Gateway. However, the first cellular radio we certified as part of this bundle is LTE.
Why? Because LTE small cells are cheaper and more phones can connect to them. With pure 5G small cells today you gain nothing except higher equipment cost and a shorter phone compatibility list. As “high-band” 5G small cells operating in the mmWave frequencies become more common-place and cheaper, we will certify those radios and FreedomFi 5G Gateway owners will be able plug them into the gateway without needing to buy a different FreedomFi 5G Gateway.
And, yes, we admit that we call this setup Helium 5G vs. LTE because it sounds cooler. If everybody else in the industry can, so can we.”
Q. Some Hotspots owners have expressed dissatisfaction about earnings, what’s your take on this?
In many respects, this is a result of the network scaling. In the early stages of Hotspot growth, when the Network was in its infancy, individual miners would participate in more Proof-of-Coverage (PoC) activity. As more miners get added to the Network, each miner participates in less PoC activity. Over time, as the network continues to expand and more devices use the network, Hotspot rewards will be weighted more heavily on data transfer.
It’s also important to remember that adding Hotspots to areas that already have significant density will result in lower rewards for everyone in the area. This is to try and incentivize creating coverage in new areas, rather than adding too much redundancy at this stage of the network.
It’s unlikely there will ever be perfect equilibrium between the amount of miners and volume of activity, or that such an equilibrium could even be defined. Our focus is on creating a strong, robust, and ubiquitous wireless network that provides a solution to real world challenges and helps to democratize wireless connectivity.
Q. What does the future hold for the Helium ecosystem?
It’s been an exciting ride to understand how decentralization and a shared economic model can work to create a people-powered network. We are focused on expanding usage across the IoT network and enabling more wireless networks such as 5G, WiFi, and VPN to join the Helium ecosystem.
Before I wrap up, I would be remiss if I didn’t express my gratitude for the community members, investors, partners and network developers who are truly the beating heart of the Network. Through their efforts and support we’ve already achieved great milestones, and the growth and evolution of the Helium Network has a bright and promising future.
The network recently celebrated its third birthday, is launching Helium 5G, and in the coming weeks, we’ll see the one millionth Hotspot go online. These milestones are an exciting reminder of why we created the Network in the first place. That’s not to say there won’t be setbacks and challenges ahead, there will be. That’s the nature of doing something that’s never been done before. But we’ll face those challenges smarter and wiser from the experiences we’ve already had.