Helium (reviewed here) , in a relatively new article, immerses investors in the technical aspect of their work and the interaction of their blockchain connections. Thus, they touch upon in more detail what the Helium project is and how miners (investors) can earn using this platform.
They also reveal the concept of POC (Proof-of-Coverage) which differs from the most used Proof-of-Stake or Proof-of-Work by other blockchains.. Let’s check below:
What Is Helium ?
Launched in July 2019, Helium is a distributed network of long-range wireless hotspots. The goal is to create a blockchain powered network for Internet of Things (IoT) devices creating what they call “The People’s Network”.
What is the Internet of Things?
The idea of IoT is to have a global network that you can connect any device to. It can provide a lot of additional features to a surprising amount of devices. This can be a toaster, dog collar, lightbulbs, pretty much anything you can think of. Although at its core it means any device connected to the internet, it has become more popular to use it to define devices that “talk” to each other.
Smart devices that connect to a ‘hub’ like Google Home or Amazon’s Alexa fall under this category. These products are the most recognizable of IoT devices.
There is still a lot of debate on whether most items even need to be connected to the internet. It does raise quite a few privacy concerns. However, there are many products and people coming on board with the idea and its popularity is steadily rising.
This is where Helium comes in. The project looks to create a global, reliable, and decentralized network that supports IoT devices. Cellular networks and public WiFi already provides some framework for the IoT, but the issues with them are price and availability.
Helium already has partnerships in agriculture, environment, pet care, asset tracking, and more. As this network of partnerships grows, the service will become more powerful and be able to serve many different users. A look at the currently supported ecosystem can be found here.
Proof-Of-Coverage
The community run hotspots act as the backbone of the network. On average they cover more than 200x the area WiFi does. Those providing reliable and honest wireless coverage are rewarded with HNT through their new Proof-of-Coverage mechanism.
Hotspots are set up through purchasing an appropriate miner from the Helium website. Each one is tested by Helium to ensure they are fully functional on the network. There are a few different ones to choose from, each with different benefits. You can get indoor or outdoor miners, depending on where you would like to keep the device. The average price of a miner sits at around $400.
Rewards can vary based on a few different variables. The biggest one being other miners in range of you. Single miners can only issue challenges and cannot directly participate in Proof-of-Coverage. As a result, they will still earn but at a slower rate than others would. The coverage map offers some extra insight into potential earnings.
Now, Proof-of-Coverage is a new kind of consensus mechanism created specifically for Helium. PoC verifies that hotspots are representing the location they claim to be. PoC takes advantage of radio frequencies produced by miners to validate them and other participants. Challenges on the network involve three roles:
Challenger — This is the hotspot that creates and issues the challenge. This occurs about once every 240 blocks.
Transmitter — This is the target of the challenge. It sends out challenge packets and relies on being witnessed by other nodes in close proximity.
Witness — These hotspots are close to the transmitter and confirm the validity of the transmitter’s packets.
The roles that a hotspot plays during each epoch define how much they earn as a reward. This brings me back to the previous mention of single hotspots earning less. Challenging alone earns about 0.95% of the available rewards. Conversely, witnesses can earn up to 21.24%. The actual reward amount can also vary based on how much a hotspot participated in the PoC.
PoC offers a low power way of earning some extra coins while strengthening the network. Most of the hotspots only use about 5W of power, which is already significantly lower than a consumer desktop would use mining a coin. It is worth noting that the initial investment is significant. But the value of the coin sitting at $14 at the time of writing, it could pay off pretty quickly if you’re in a good location.
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