All You Need to Know About Helium Coin

The Internet of Things is becoming a more important network every day. According to some estimations, there are more than 8 billion devices that need to remain connected to be able to perform different tasks. However, the current networks are too crowded or are unavailable to accommodate these devices due to their traits. To make these devices work, it would need a humongous investment in infrastructure, securing a swift ROI for investors.

Helium is an attempt to shift this traditional focus. Instead of putting the weight of the investment into investors, it decentralizes funding and lets whoever wants to run a node that will benefit devices. The economy of the network is also decentralized because it is based on its own token, Helium, that closes the circle among devices and providers.

Fundamentals of Helium

Helium is basically a long-range, low-power system that allows IoT devices to communicate in areas where traditional networks wouldn’t work or are not available. For this, the network leverages a technology called LoRAWAN with a native blockchain to create what the project calls “LongFi,” which is the full stack technology that powers the People’s Network, the name that the protocol has given to the network of devices using Helium’s services.

Users that want to provide connectivity in the Helium network must purchase a Helium miner, which is a device that integrates the LongFi protocol. In this way, the users provide connectivity to other devices (or effectively mine) and receive rewards for this service.

Devices that connect to the Helium devices and use the service to connect to the Internet must also provide a fee for this service. This encompasses the whole network economy.

The protocol runs on two important consensus algorithms. The first one of them is Proof of Coverage, which aims to verify if the installed device is really providing coverage and detect in which area it is doing it. In this way, the device can be rewarded correctly.

The other important algorithm is the one that uses Proof of Coverage challenges to issue rewards at the end of a period of time. This system is called Helium Consensus Protocol, and it is based on the HoneyBadger BFT consensus.

HNT Closes the Economic Loop

Around this whole system, there is the HNT token, which is the native official currency of the network. HNT is the asset that powers all the transactions in the network. It serves as an incentive for miners, and as a payment token for users that leverage HNT’s network.

According to Helium docs, HNT has a hard cap of 223,000,000 HNT. The distributed HNT to the network will be halved every two years till reaching the maximum amount.

The inclusion of the token is what makes Helium decentralized and interesting because it allows the monetization of these services in an independent and automatic way, without depending on services from third parties. The price of HNT has grown immensely, going from $0.1 in April 2020, to $20.34 at the time of writing.

Leave a Reply

Your email address will not be published.

Related Articles
Read More

What Is Moon Farming And Why Is Reddit’s Crypto So Popular?

Reddit is one of the largest social media networks out there —one of the top 100 websites globally. Everyone can participate in it and use their cool features and communities. Those communities are called “subreddits” One thing about these subreddits is that some of them...
Read More

Finding Lost Loved Ones In The Metaverse

It was my sister’s fault, not mine. I was too young to rent A Nightmare On Elm Street - Part 2 when I was in grade school. But my dad was passive, and my sister was persistent. The next two hours formed how I viewed...