Why Helium HNT May Fail in 2022

Helium Axxent has released a new article about "Why Helium May Fail, And Why It May Soar ." If Helium fails it will most likely be because one of its competitors is able to win a critical mass of adopters, both Internet of Things (IoT) end users and the networks that serve the IoT markets.

Helium’s highest profile competitors are Amazon Sidewalk and SpaceX Starlink/Swarm. 

Amazon has sold thousands upon thousands of Echo and Ring devices, which not only provide valuable and convenient services to Amazon customers, but also provide it with an ongoing bonanza of consumer behavioral data that fuels Amazon’s marketing engine.

Amazon Sidewalk is designed to help all those smart Echos and Rings to stay connected to the internet, up to half a mile away and even with temporary loss of primary internet service. Similarly to Helium, this is accomplished using low-power radio transmitters.

For Amazon’s Sidewalk (AKA hyper-local networks) to work Amazon needs enough participation within neighborhoods to provide uniform coverage. If Amazon is able to achieve that, then it can look to expand its IoT capabilities. We don’t know what those capabilities will look like yet, but it could mean adding new and different types of smart devices to the Amazon family to compete with existing non-Amazon devices. In spite of Amazon’s assurances of data anonymity and security it could also mean finding ways to mine all of the consumer data traversing the Sidewalk, possibly with third party developers.

An important part of Elon Musk’s SpaceX venture is Starlink, a growing constellation of low-earth orbit satellites whose purpose is to provide fast broadband internet service to users anywhere on the planet. This is a risky venture, with high capital investment and lots of competition, especially in urban and suburban areas.

In the early stages of Starlink’s rollout they are focusing on sparsely populated areas that do not have cost competitive access to high-speed internet. Starlink’s challenges will be in providing service to more populated areas if it can compete with 5G and with higher internet speeds and lower prices. 

Starlink also offers Internet of Things network service, but its broadband product is overkill and too expensive for IoT’s small data package needs. That could change, however, with Starlink’s acquisition of Swarm. Swarm focuses on providing satellite connectivity to IoT networks, and has 150 low-earth orbit mini-satellites of its own. Swarm’s expertise and experience could help Starlink to compete with Helium with its IoT connectivity service.

With Bitcoin and Ethereum and 13,000 other cryptocurrencies vying for attention it’s easy to overlook the innovations that Helium has brought to its Internet of Things network. These are the reasons why Helium may soar.

The Helium Token (HNT) may effectively be used as a Security Token by Helium and its investors, but it’s much more than that. Amir Haleem and his company are using HNTs to incentivize a peer-to-peer decentralized network of Helium hotspot nodes.

This network allows Helium to provide low-cost, low-energy wireless connectivity between millions of IoT devices worldwide. Each node is hosted by an ordinary person and Helium rewards each host with HNT, just for setting up a small radio frequency device in their home or workplace and letting it transmit IoT device data and interact with other nearby hotspots. The peer-to-peer nature of the Helium network is what makes it “The People’s Network.”

Helium’s next innovation was to implement a burn and mint equilibrium model to allow network customers to pay for each of the data transactions between IoT devices and network nodes. The medium of exchange is data credits (DC), which customers purchase by burning HNT. As HNTs are burned they go out of circulation, reducing the overall supply of HNTs. Supply and demand theory says that a reduced supply of HNTs will increase the demand and cause the value of each HNT to go up. As HNT prices increase demand will decrease, always tending toward supply and demand equilibrium.

Since every host reward and data transaction is recorded and transparent on the Helium blockchain there is no need for costly centralized control of the network. That’s a win for everyone who uses IoT devices, for hotspot hosts, and for Helium and its investors.

There are several interdependent stakeholders in the Helium Network, including Helium itself, Helium investors, IoT network customers, ancillary service providers, IoT network node hosts, and IoT device end-users. Although the Helium Axxent article focuses on the main drivers of value for HNT investors,

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Created on Dec 19th 2021 21:11. Viewed 100 times.

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