The Helium network, referred to as "The People’s Network," is a decentralized wireless network that allows "internet of things" devices (IoT), such as smart fridges, pet collars, or rentable scooters, to wirelessly connect to the internet and geolocate. The network is secured by the Helium blockchain which, starting summer 2021, will become a proof of stake protocol.
The IoT ecosystem is expanding, but a true boom is hampered by the need for such devices to connect to the internet via satellite or cellular technology. Those two technologies are a limiting factor due to their power requirements, cost, need for contract‐based payment, and/or range of coverage. The Helium network solves this problem with a low‐power, low‐cost, privacy default peer‐to‐peer wireless network that allows IoT devices to geolocate and send data to and from the internet. This decentralized P2P network of hotspots uses radio frequencies and consumer‐grade hardware to create the pay‐as‐you‐go internet connection for IoT devices. The Helium Network is secured by a novel work algorithm called Proof of Coverage.
Helium has been extremely successful since its launch, with immense traction across a variety of industries, including Lime scooters, InvisiLeash pet tracking products, Salesforce IoT employee onboarding, and Victor e‐mousetrap pest control. Over 40,000 Helium Hotspots currently provide network coverage and mine HNT in the process. These hotspots, often sold out or on backorder, were named one of Time’s Best Inventions of 2019.
Since its launch, the Helium blockchain has been secured and validated by the hotspot operators on the Helium network, using their consumer‐grade hardware and basic internet connections to provide the Helium network’s coverage and secure the chain, and earn rewards in the protocol’s native token HNT in return for their work.
When the Helium Network transitions its blockchain, a new layer of enterprise‐grade proof of stake validators with more robust infrastructure, such as those run on the Bison Trails platform, will be introduced to provide a more reliable network, faster connections, and, in the future, potential proxies for lightweight gateways to the network
Hotspot miners will continue to earn the majority of rewards for relaying IoT device data and providing network coverage, but the activity of those miners will be verified and recorded to the chain by a randomly elected group of Helium blockchain validator nodes.
Becoming a validator is a new opportunity for hotspot owners, or other HNT holders, to earn additional rewards by staking their coins to a Helium validator.
"As one of the most trusted names in the blockchain infrastructure industry, we’re excited to work with Bison Trails to enable HNT holders to run their own validator within the Helium Network," said Scott Sigel from the Decentralized Wireless Alliance (the Helium Network’s Foundation arm). "This is a critical step in the network’s growth, security, and adoption, and we know they will work with us every step of the way to implement the network’s validator staking process."
IoT devices require inexpensive, readily‐available but not long‐lasting internet connections to send to and receive data from the internet. The Helium Network, a collection of hotspots worldwide and hosted by individuals, provides this coverage to IoT devices wherever they are or may go. The Network has built‐in incentives to ensure rewards are incresed or decreased depending on the density of other hotspots in the area. This is a means to secure the network as well as to ensure that the service range could meaningfully connect devices. The Helium blockchain was created to incentivize operating hotspots for this overarching P2P network that IoT devices can use for geolocation and other data transfer services.
The hotspots use a long-range wireless protocol (Long-Fi) and the operator’s internet connection to broadcast a radio signal to which low-power devices can connect. Any LoRaWAN device (the standard for IoT) can then connect to the hotspots, making micropayments for the privilege of accessing the network.
Since genesis, the Helium blockchain has secured the network with a novel work algorithm called Proof of Coverage. Proof of Coverage is the method by which a device relays its physical location to the blockchain without having to be trusted by the chain, allowing the network to operate securely across an array of independent, distributed operators. Helium hotspots are randomly assigned Proof of Coverage "challenges" requiring them to ping nearby hotspots and prove that they are located and transmitting coverage from where they say they are; hotspots earn HNT for successfully completing the tests. Hotspots without neighbors aren’t able to verify coverage and therefore earn less HNT than those that are part of an interconnected network.
As the Helium network has grown in use and popularity, its operators’ consumer‐grade hotspot hardware has become less able to simultaneously provide coverage, complete Proof of Coverage tests, and conduct consensus for the Helium blockchain. With the transition to proof of stake, validator nodes will be randomly selected to perform the work of Helium’s consensus group instead of a randomly selected group of miner hotspots. Proof of stake validators will verify hotspots’ transactions and add new blocks to the Helium blockchain, earning rewards in HNT for contributing to the network’s stability.
Each Helium validator must have 10,000 HNT staked to it in order to participate. A minimum of 100 validators has been proposed for the active set; once that threshold has been reached, the protocol will begin electing validators from the pool to perform the work of the consensus group
The effective reward rate for validators on Helium is based on the staking rate of the total supply of HNT in circulation; as the percentage of total tokens staked increases, the reward rate per staker decreases. All reward rate estimates are based on the assumption of 10k HNT staked per validator node. At launch there will be no over‐staking; a node operator who wants to stake more than 10k HNT must spin up multiple validator nodes in increments of 10k HNT. This per node cap incentivizes participants to distribute their stake across multiple validators—helping increase security and decentralization.
Validators will perform consensus for the Helium blockchain. However, unlike most PoS networks, validators are selected randomly to participate rather than based on the amount of HNT staked. As such, operators optimize their participation by operating as many validator nodes as possible.
To connect to the internet via Helium’s hotspots, IoT devices make micropayments with Helium Data Credits. Helium Data Credits (DCs) are non‐transferrable USD‐pegged work tokens created by burning HNT; IoT operators can access DCs by paying with a credit card or HNT, but the Credits can only be created by burning HNT. The more devices that connect to the Helium network by paying with DCs, the more HNT is burned, increasing the value of HNT as the network grows by decreasing the overall inflation rate.
At genesis, the Helium network’s issuance target was 5,000,000 HNT per month. This rate will last until August 2021, when the Helium network will experience its first halvening, meaning only 2,500,000 HNT will be issued each month moving forward.
Halvenings will continue to occur every 2 years for the first 50 years of network operation, until the network has reached its maximum supply of 223,000,000 HNT around 2070. No further HNT will be mined from then on. (Note: originally the maximum supply of HNT was to be 240M. It was reduced by 17M following network complications. All future‐looking issuance is projected). There is currently a circulating supply of 83M HNT.
At the time of writing there is no slashing in Helium, though the team may implement it in the coming months.
Bison Trails is uniquely positioned to provide unparalleled enterprise-grade node infrastructure for Helium validators:
Bison Trails is a blockchain infrastructure platform-as-a-service (PaaS) company based in New York City. We built a platform for anyone who wants to participate in 21 new chains effortlessly.
We also make it easy for anyone building Web 3.0 applications to connect to blockchain data from 32 protocols with Query & Transact (QT). Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.
In January, 2021, we announced Bison Trails joined Coinbase to accelerate our mission to provide easy-to-use blockchain infrastructure, now as a standalone product line. The Bison Trails platform will continue to support our customers. With Coinbase’s backing, we will enhance our infrastructure platform and make it even easier to participate in decentralized networks and build applications that connect to blockchain data.
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