The Helium Economic Feedback Loop

The $HNT token and the Helium network itself have seen tremendous growth in 2021. This is predominantly due to the superior economic incentive model delivered to miners and businesses via the network. The below picture is a snapshot of the Helium network’s coverage as of Oct.1 , 2021. As long as the helium economic feedback loop described below stays in tact, we expect
Helium’s network coverage, the number of hotspots deployed, as well as the price of $HNT to continue to rise in the coming months.

Helium is currently deploying and managing a decentralized wireless network at about 100x lower cost than traditional telecom businesses(Verizon, AT&T, etc). The legacy model of building and deploying these networks is an extremely high upfront infrastructure cost(towers, networking equipment, etc). Helium flips this model on its head by propagating the network through individuals deploying and mining $HNT tokens with their own hotspot.

We started mining Helium tokens in 2019 because it fit our investment framework of a venture capital opportunity with the ability to generate passive income for early adopters.  Additionally, Helium is solving a real business problem in the IoT space; providing connectivity in geographic locations where it is not cost effective(cellular data is too expensive for the use case) or practical(no ability to connect to WIFI).

 

Helium is an economic incentive protocol that is more than just a crypto network. The Helium network simply uses a crypto-economic incentive model in order to:

 

1) encourage, foster, and facilitate mass adoption of miners; thereby providing more network coverage to users of the network.

 

There has been a massive shortage of helium hotspots(hardware) due to unprecedented demand. We have seen 3rd party manufacturers race to build and sell this equipment, which will drive the price of a hotspot down. This makes sense because as more hotspots are deployed, the more difficult it becomes to mine $HNT.

 

2) encourage businesses to utilize the $HNT token to transfer IoT data in areas of low connectivity

 

There is a massive range of use cases for businesses to utilize the Helium network, including dog trackers, IoT sensors, etc. We seem to be witnessing announcement after announcement of businesses finding new ways to integrate the Helium network into their workflow.  Most notable, Microsoft Azure IoT Hub has built an integration to allow businesses to securely send, receive, and manage their data.

 

“By seamlessly integrating the Azure IoT platform with Helium, customers get easy access to the wide range of data and analytics services of Azure to create business value out of the captured sensor data. With Helium’s worldwide IoT network and Microsoft’s cloud services, customers get the perfect foundation for the implementation of their IoT use cases”

– Yannik Kopp, IoT Expert at Microsoft

Simply put, as more businesses transfer data on the Helium network, we should see a rise in $HNT price as more data credits are burned to facilitate the movement of IoT data.

 

This economic feedback loop combining both 1 and 2 below is likely the most important driver of Helium’s success.

 

  1. Mass adoption of miners providing more network coverage
  2. Mass adoption of businesses utilizing the network for IoT use cases

 

However, Helium is still warming up, and plans to expand into the 5G space. They are partnering with various entities, including FreedomFi, to build wireless networks using existing protocols like Wi-Fi, LTE, and 5G.  Helium is poised to dominate global telecommunications in the years to come.

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