A deep dive into Helium’s hotspot and business plans
Earlier this year, I plugged in a Helium hotspot and created a node on a distributed network designed for the internet of things. Three months later, I am prepared to share my experience with the hotspot, along with how my thinking around Low-Power Wide-Area Networks (LPWANs) has changed as a result of this experiment.
First up, let’s talk about Helium’s history and business model. The company was created in 2013 because its founders realized that the internet of things was promising, but also tough to implement. If you wanted to make connected sensors useful and ubiquitous you had to make connected sensors easy to install and cheap to operate. Which is why when Helium first launched it was building a proprietary radio protocol embedded in sensors.
My Helium hot spot came packaged like a consumer product. Image courtesy of S. Higginbotham. That didn’t work. So Helium changed up the model. Amir Haleem, the company’s co-founder and CEO, has long been a proponent of a decentralized internet, so he created a decentralized IoT networking protocol called LongFi and adopted cryptocurrency to make it worthwhile for people to become nodes on Helium’s network.
Haleem’s insight was that LPWANs for the internet of things needed to be plentiful and cheap. If you charge a lot of money to send relatively small amounts of data you’ll only get high-end use cases, such as tracking diamond shipments or whatnot. And there are plenty of existing networks—including cellular—that meet that need. What the IoT needed was a way to send small amounts of data at low power for a penny or so per transaction.
That way if a company wanted to connect a smoke detector to the internet, it could afford to do so in a manner that wouldn’t make the device cost-prohibitive, or require the manufacturer of the smoke detector to create a subscription plan simply to pay for data. The cellular industry is trying to build a low-cost network for IoT on traditional licensed spectrum called NB-IoT. Other companies, such as Sigfox and Senet, are also trying to build low-power IoT networks from scratch.
But Haleem’s contention is that if the goal is to try to connect a bunch of data-sipping, low-cost devices to the network, the cost of building a centralized network is simply too high. Instead, the network must be decentralized and look more like a shared, user-created network.
And so both the Helium hotspot and Helium token network were born. Haleem hopes that users will install Helium’s physical routers on their broadband networks to create an ad hoc IoT network that will transfer data over those users’ home or office broadband connections. To incentivize users and create security, Helium created a blockchain called Helium Network Tokens that accrue to people who run a Helium hotspot.
Helium hotspot owners can earn tokens for providing a connection to passing devices as well as for simply existing as a node on the...