I have great passion in scavenging. Re-purposing deprecated free/cheap items for good use with a little effort from me is a very fulfilling experience as an engineer. And thus I always keep an eye on a couple of recycling centers and secondhand trading platforms.
One day, a post drew my attention: “my balcony for rent to mine crypto coins”. The picture attached was showing an array of antennas installed on the edge of a balcony in an apartment building. What kind of crypto currency would require a balcony and a setup like this to mine? Digging deeper into this topic, I found something really interesting called Helium Project.
Yet Another Crypto?
At the first glance, Helium is just yet another crypto currency that looks suspiciously like a Ponzi scheme: miners need to purchase computational devices and keep them running to own tokens/coins based on some specific rules. The unique flavor of Helium to distinguish itself from other cryptos is that miners are paid with HNT coins for continuously providing a radio frequency (RF) access point (AP) in the area instead of hashing on the device. This is where the balcony comes into the picture: a better placement of the antenna results in better signals for the RF AP, and therefore higher rate of income.
Helium Project aims to establish a distributed deployment of a wireless network with broad geographical coverage. Individuals may own HNT coins by either providing network coverage (physically done by hosting a Helium “mining machine” at a site with Internet connection), or serving as a maintenance role in the Helium network such as a validator for nodes nearby. On the other hand, the end users pay with HNT coins to access services of Helium network. This is the rule for service providers and consumers in the Helium system.
This is where things start to get more interesting to me. Every Helium “mining machine” is actually a mini RF signal base station. They provide RF signal coverage with Internet connection which comes from hosting sites. Since hosting sites are set by individual miners, unlike base stations built by large service providers, RF APs of Helium system are very geographically distributed. As long as there are enough RF APs to support a good coverage in the area, wireless devices of service consumers can roam freely without losing Internet connection. Does this sound familiar? Of course, because it is very much like the cellular network, but in this case its implementation doesn’t involve big construction teams to build towers here and there. From this perspective, I think we can summarize Helium project as an Internet of Things (IoT) infrastructure project attempting to implement the physical construction in a very distributed way.
But why? What’s the point of blending an infrastructure project with cryptos?
Mine, Mine, Mine
Imagine that you are a miner for HNT. You’ve just spent a couple of thousands of bucks on the “mining machine” (a.k.a. node) and started your journey with Helium. The first couple of months went pretty well. HNT streamed into your account at a nice rate. Though it haven’t paid off your initial investment yet, it seems to be just a matter of time. All you need to do is to make the initial investment, connect the node to your antenna and the Internet, and let it run by itself. Easy money to own once it pays off.
There might be some up-and-downs on the price of HNT coins, but nothing crazy. The real problem comes from your competitors. One day you noticed that another 3 miners showed up in your area. Since then all 4 of you started to share the income in the same area. This would probably benefit end users with 3 additional RF APs in the area, but your income dropped by 75% almost immediately and consequently deferred your estimated pay-off date by 4 times. This is not going to work, or at least not going to work well for you. What do you do now?
To gain a larger portion of the income, you need to outperform your competitors and get more traffic going through your node. Fortunately, there are already some good options available for you on the market:
- If you are good at playing with RF devices, you can tweak your device and antenna for better performance.
- Someone is offering to rent their balcony where you can place your node at a better location.
- There are some and will always be some newer node models that work better than the existing main stream version for you to upgrade.
They are available to you, as well as to all your competitors. You are all players in this weapons race. Over time some may quit, but as long as HNT still has cash value, the show will go on, and so will the Helium network.
Couch Potato Project Management
Now let’s flip the table and take the ownership of Helium project. The goal is to build the infrastructure to support an RF network to cover as much area as possible. You have nothing but a whole bunch of money. You need a solution to deliver the project, as well as to keep the system running over time. And Helium whitepaper is the solution.
With rules defined by Helium project, almost everything could be done by throwing money into HNT. Individuals will be motivated to purchase, set up, and upgrade nodes to provide network coverage as long as they are getting paid by HNT coins with cash values. The rate of income correlates with the performance of each node directly. Potentially it could be a very effective framework to help deliver a project, simple but smart. Once kicked off, details of the project will be rolled out automatically by all the efforts from individuals involved. From the project owner’s perspective, it means very minimal management on the implementation, and potentially an impressive money to key objectives conversion rate. Amazing!
Both Sides Now
Helium project has changed my understanding and opinion on crypto currencies and block chain technologies. It ties money, motivation, resource allocation, performance, and results together, as well as reduces the amount of human intervention significantly in the execution/implementation stage of a project. With all the innovation and potentials that I see in the framework established by Helium project, I couldn’t help imagining what else can be achieved.