Helium & The Proof of Coverage Method: “Why Helium miners are the new Wi-Fi routers”
Good morning readers! Here is the first blog post regarding cryptocurrency news released in roughly one year! I want to start with a cryptocurrency that piqued my interest in my own life.
Helium is a cryptocurrency that Frank Mong created in July of 2019. This cryptocurrency is reaching its third birthday in a couple of months. In this post, I will discuss the price history of Helium, the Proof of Coverage method, and how it is here to help society be more effective and efficient.
---Disclaimer: I am not giving investment advice, I am only making you aware of the recent news regarding cryptocurrency so you can better understand the coin, technology, and the overall effect cryptocurrencies are currently having in the world we live in.--
If you have been following Helium as long as I have, you have seen the all-time highs and the recent bearish downturn.
Here are some prices of Helium through the past year I've witnessed:
The cost of Helium today (5/1/2022): $12.93
Helium price one year ago (5/1/2021): $18.46
Helium's All-Time High (11/6/2021): $57.69
Helium's Year Low (7/18/2021): $9.95
As we see through the past year, the price of Helium has been sporadic and is currently not headed in the direction miners anticipated. With the whole crypto market in a downtrend, I expect Helium to continue to follow suit, similar to the market trends.
The year low is near the current price of Helium. With roughly 2.5 months from being a whole year of Helium's year low, one could expect ground zero for Helium is around $10.
Helium was first put in my line of vision by a friend back on October 23rd, 2021. He expressed that an individual could mine Helium by having a miner hooked up in their house, similar to Wi-Fi routers. You hook the miners up, download the Helium app, and boom! You are a part of the Helium coverage, witnessing and approving transactions.
When we entered the Helium mining, the hotspot pool was roughly 300,000. To date, there are around 750,000 miners. In six months, the miner pool doubled, and the market price for HNT cut to around 1/4 of its all-time high. With the number of hotspots increasing, the demand for witnessing transactions is more efficient; therefore, the reward for witnessing dwindles.
For example, if you desire apples (witnessed transactions) and there are only three apple stands in your area, you have to choose from one of those three apple stands. People in your neighborhood realize that the demand for apple consumption is highly profitable.
In 6 months, there are seven apple stands and another half-built. You, now as the buyer, have more than double the locations to purchase apples. You can visit one store and another until you find the apple at an affordable price. The Helium network can use a multitude of hotspots in order for the most efficient validation process.
Question: "What is Proof of Coverage?"
Answer: Proof of Coverage is another transaction approval method used within cryptocurrencies. If you are unfamiliar with the other techniques, such as Proof of Work, or Proof of Stake, I suggest reading that post after this to understand better each and what makes them different.
Proof of Coverage uses radio frequencies similar to how Wi-Fi routers operate. There are five sections within Proof of Coverage and how the proofing works:
- Challengers
- Beacons
- Witnesses
- Validators
- Rewards
The challenger hotspot requests from another hotspot to prove it is providing Helium coverage. The challenged hotspot (beacon) then sends a radio frequency out to neighboring Helium hotspots to validate its location and that the hotspot provides Helium coverage to the network.
The selected hotspots from the beacon's radio frequency are then witnesses to the desired coverage asked by the challenger hotspot. If there are numerous hotspots in an area invited by the beacon to witness, the network will choose only ten hotspots. These ten hotspots are selected at random.
This sequence of events is then sent to the validators to approve of the challenge witnessed by other Helium hotspots. Once the proof has been validated and is a part of the Helium blockchain, all hotspots used within the validation process are rewarded with HNT, Helium's cryptocurrency.
These Helium miners are not like Ethereum rigs. Instead, you can purchase Helium Miners like tech device for your house. The top names in the Helium realm are Bobcat, Nebra, and Rak. Each of the three has different versions of the Helium miner that can be specific to your country or witnessing desires. The price for the miners ranges from $479 (on the company's website) to $700 (on eBay). The difference between prices comes with the time value for the Helium miners. On average, the wait time for a Helium miner is about six to eight months. However, you can pay a premium on eBay to get the miner in less than a week.
There are many potential uses for Helium and the Proof of Coverage method. Though people do not use the Helium network like they use Wi-Fi, some companies rely on the Helium network for their business.
Lime, the electronic scooter company, uses Helium's network to locate scooters. The scooters send a radio frequency out, and hotspots within the area react to the frequency by witnessing the location and sending the place to validators. Lime is given the site of their scooter, and the hotspots used to locate the scooter get rewarded with HNT.
Lime scooters are one real-life example of how Proof of Coverage can help a business. Imagine if hotspots were as common as Wi-Fi routers and you could locate something of yours, such as your wallet or your dog.
You let your dog out in the yard to do their business, then a squirrel runs past, and your dog chases the squirrel leaving your field of vision. After a few moments, you run after the dog, frantically yelling their name along the sidewalk searching for your dog. Instead of putting flyers up on the nearest telephone poles, you pull out your cell phone, connect to Helium's Proof of Coverage network and ask hotspots to locate the beacon from your dog's collar. In less than thirty minutes, you find your friend can go back into your house safe and sound.
Though the owners of the witnessing hotspots aren't getting rewarded as highly as they would like, they are still improving the network and the cryptocurrency's overall effectiveness. I have my Wi-Fi router and my Bobcat 300 miner in my house. Helium's Proof of Coverage method has been named "The People's Network". It is up to us to develop this network.
In next week's post, I will be writing about Steppin and the cryptocurrency you are rewarded for simply walking!
Until next time,
Seth
