The Helium Network utilizes a decentralized wireless infrastructure, often referred to as "The People’s Network." Its native token, HNT, plays a crucial role in the overall system. The principle behind Helium’s model is to decentralize IoT (Internet of Things) connectivity by allowing participants to set up hotspots that provide coverage and earn HNT tokens in return.
Helium Network and Proof of Coverage
A unique feature of the Helium Network is its consensus mechanism called “Proof-of-Coverage” (PoC). Unlike traditional blockchain networks that rely on Proof-of-Work or Proof-of-Stake, Proof-of-Coverage specifically verifies that wireless hotspots accurately provide network coverage in a specific area. Helium hotspots effectively authenticate their location and the quality of the coverage they offer to the network.
In exchange for proving their location and providing connectivity, these hotspots can earn HNT tokens. This is done through a system of validations wherein different hotspots in an area are compared against each other. Hotspots that successfully demonstrate they provide coverage are rewarded with HNT.
Hotspots and Network Participants
There are two key participants in the Helium ecosystem: those who set up and maintain Helium hotspots, and IoT device operators who leverage the network.
1. **Hotspot Hosts:** Participants can purchase Helium-compatible hardware and set up their own hotspot, which acts as a small, decentralized wireless router. The hotspot broadcasts a LongFi signal used by connected IoT devices, allowing them to send and receive data over large distances with low power consumption.
2. **IoT Device Operators:** Businesses or individuals that operate IoT devices can access network coverage provided by these decentralized hotspots. Devices such as smart sensors, tracking monitors, and other wireless systems benefit from Helium’s low-power, long-range capabilities.
HNT Tokenomics
HNT serves as both an incentive for hotspot providers and a utility token within the Helium ecosystem. The supply of HNT tokens is capped and undergoes a halving mechanism to reduce rewards over time. Hotspots earn HNT based on several factors, including how much coverage they supply and how often their coverage quality gets verified through PoC. Additionally, HNT holders can convert their HNT tokens into Data Credits (DC), which IoT device operators use to pay for network access.
By combining a decentralized approach to wireless infrastructure with an innovative token model, the Helium network offers a new way to support IoT communication.
