Crypto-Powered IoT Networks Are on Their Way to Over 250 US Cities

When internet-of-things (IoT) startup Helium first announced its crypto-mining modems, sales of the devices were limited to users in Austin, Texas.

The company quickly sold out of its first production run designated for the Texas capital, but now Helium is shipping units much more broadly, to 263 cities around the United States, CoinDesk has learned.

Of that group, a company spokesperson said the key cities are New York, San Francisco, Boulder, Denver, Atlanta, Chicago, Dallas, Houston and Seattle. Shipments for this next wave of hotspot production should begin in October.

To recap, Helium is a network meant to help IoT devices like e-scooters, simple sensors and pet trackers get low-volume data to the internet quickly and at very low cost.

At-home Helium hotspots mine helium tokens by performing tasks useful to the network, such as verifying the location of nodes, the sequence of data and the location of devices sending data over the network. Companies that want to transmit data using Helium hotspots must pay with a second token, data credits, which can only be obtained by burning helium.

In other words, by rewarding people for setting up these $495 hotspots and connecting them to the internet, the system gives people an incentive to deploy the network on Helium’s behalf, rather than forcing the company to sort out its own footprint.

Marcela Gomez, a researcher at the University of Pittsburgh who has looked at economic models for computing networks, told CoinDesk:

“Several approaches have been researched, especially within the cognitive radio domain, for radios to cooperate with each other so that they can use network resources more efficiently when transferring data. The Helium case seems like a good example of putting this to practice.”

User feedback

Frank Mong, Helium’s chief operating officer, told CoinDesk the company has learned a number of lessons deploying as many hotspots as possible in Austin in a short period of time.

The product attracted a lot of people interested in networking who weren’t necessarily well-versed in crypto, so Helium had to make a number of design decisions to improve the user experience.

“Having a field of real consumers onboarding hotspots all in one day was definitely a good learning experience for us,” Mong said.

For example, the company increased the size of the token pool dramatically so that users would receive whole tokens rather than partial tokens, which some found confusing.

Proportionally, Mong said, it amounts to the same thing, it’s just a question of how it appears to users.

The firm is already seeing early efforts to win whale positions.

Said Mong:

“There are entrepreneurs and people who are in the tech world, IoT or real estate, where they understand building a network and providing access. And that being early has advantages.”

Some of these early enthusiasts are buying as many as 50 Helium hotspots and deploying them themselves around geographic areas, making Helium’s work much easier.

More interestingly, Helium had to learn about how networking works in real situations. Helium hotspots are constantly trying to prove their location by sending out signals and triangulating with other nodes on the network. Helium uses spectrum that can move through just about anything, but different materials and conditions can still impact transmission.

“That baseline can’t be established before you join a network. It can only be established after you join the network,” Mong said. “As hotspots come on board, it’s like a living organism that learns and adapts.”

Before long, there will be additional ways for interested parties to participate, Mong said, such as by offering blockchain nodes that store the ledger without transmitting data.

Token talk

Helium is staying out of getting its tokens onto exchanges, but anyone mining them can do anything they want with them as soon as they show up.

That said, eventually, users will be able to sell helium to users of the network, but only denominated in data credits. That means a user would indicate the wallet the credits are destined for, receive payment and burn their helium tokens. Then the, say, scooter company using the network would have its data credits topped up, allowing the company’s scooters to send data over the Helium network.

Helium’s initial partners, such as food conglomerate Nestlé and pet-tracking company InvisiLeash, are using its network now but not yet paying for it, Mong said. That day will come, however.

Of course, enterprise customers have other options.

“Within the IoT domain, big telecom companies offer their legacy networks for IoT services at low costs (e.g., AT&T LTE-M and NB-IoT),” Pitt professor Gomez said via email. “It would be one of Helium’s tasks to provide sufficient incentives for creating this decentralized network.”

Kyle Ellicott, founder of ReadWrite Labs and a longtime IoT investor, was less concerned about the incumbent competition. Most major telecoms are focused on getting customers onto existing infrastructure or 5G, he said, which may still be too costly for sending thermometer data to the web.

Plus, Ellicott argued that places can be overlooked by telecoms but easily added with Helium’s grassroots approach. A large farm that wants to collect data from sensors, for example, could throw up a few Helium hotspots for less than a few thousand dollars and cover an enormous amount of land.

Ellicott said:

“The process of what Helium and others are doing is it’s a next step in the generation of technology being all throughout our lives.”

Photo of Helium team members, Pierre Defebvre, Andrew Allen, Rahul Garg and Brian Bussiere (Courtesy photo)