How Does Helium (HNT) Work? A Comprehensive Guide

What Is Helium (HNT)? How Does it Work? A Comprehensive Guide
What Is Helium (HNT)? How Does it Work? A Comprehensive Guide

What Is Helium (HNT)?


Helium (HNT) was a layer-1 blockchain network that migrated to Solana in April 2023. It is specifically designed to address the connectivity challenges of the Internet of Things (IoT). Unlike traditional cellular networks that rely on centralized infrastructure, Helium utilizes a distributed network of low-power hotspots, collectively referred to as the Helium Network.

These hotspots, also known as Helium Miners, act as both network nodes and wireless access points, providing long-range coverage for IoT devices. By connecting to these hotspots, IoT devices can transmit data securely and efficiently. In return for providing this connectivity, Helium Miners are rewarded with HNT tokens, the native cryptocurrency of the Helium network.

Key Takeaways

  • Helium is a Solana based network that enables low-power wireless devices to communicate with each other and the internet.
  • It was founded in 2013 by Amir Haleem, Shawn Fanning, and Sean Carey.
  • Helium aims to create a global wireless network that is secure, decentralized, and affordable.

What Is The History of Helium?

Helium Inc., the company behind the Helium blockchain, was founded in 2013 as a telecommunications startup. Headquartered in San Francisco, California, United States, the company is led by co-founders Amir Haleem and Shawn Fanning, who also serve as the current CEOs.

Later in 2019, Helium embarked on a transition into the cryptocurrency realm, initially achieving moderate success. However, the company experienced a remarkable surge in popularity in early 2021, with the number of Helium hotspots worldwide skyrocketing from around 15,000 to nearly a million by the end of January.

In 2021, Helium’s mainnet, known as the Helium Network, was formally launched on March 10th. This marked the commencement of the network’s operations, enabling users to purchase Helium Miners and commence earning HNT tokens.

March 22nd, 2022, marked the announcement of another significant partnership, this time with Sigfox, a global provider of IoT networks. This collaboration enabled Sigfox devices to connect to the Helium Network, expanding the accessibility of Helium’s coverage and providing more options for IoT connectivity.

The year 2023 commenced with a significant development. On January 4th, Helium introduced Hotspot 1.0, the next generation of Helium Miners. Hotspot 1.0 boasts enhanced performance, improved connectivity, and a more compact design, making it an attractive option for users seeking to join the Helium Network. In April, Helium migrated to Solana. Its original blockchain was essentially shut, and a snapshot was taken of wallet addresses, which were replicated on the new chain.

How Does Helium Work?


At its core, Helium is a blockchain-powered network that utilizes a network of low-power hotspots to provide long-range wireless coverage for Internet of Things (IoT) devices. This innovative approach to wireless connectivity addresses the limitations of traditional cellular networks, which often lack the range or coverage to support widespread IoT applications.

Helium Miners, the nodes that form the Helium Network, act as both network relays and wireless access points. They receive data from IoT devices, package it into blocks, and transmit it to other Helium Miners and, ultimately, to the Helium blockchain. This process of relaying data ensures that IoT devices can communicate and transmit their information securely and efficiently.

In exchange for providing this connectivity and maintaining the network’s integrity, Helium Miners are rewarded with HNT tokens, the native cryptocurrency of the Helium network.

What Is Helium’s Proof of Coverage (PoC) System?

Helium Proof of Coverage (PoC) is a novel consensus mechanism that utilizes radio frequency (RF) propagation to verify the location and connectivity of Helium Hotspots. It plays a crucial role in ensuring the integrity and decentralized nature of the Helium Network.

FeatureDefinitionPurpose
ChallengerValidator that initiates the PoC ChallengeVerifies the location and connectivity of a Beaconer
BeaconerTarget being tested in the PoC ChallengeResponds to the challenge packet to prove its location and connectivity
WitnessObserves and validates challenge response packetsConfirms the Beaconer’s responses and helps maintain the network’s integrity
These are the three core features of the PoC system.

What Are The Tokenomics of Helium (HNT)?

The HNT token plays a crucial role in the network’s operation and governance. It has a maximum supply of 223 million and a circulating supply of 143 million, according to CoinGecko. The largest chunk of the token’s supply is reserved for the miners and the community.

HNT tokens have various use cases within the Helium Network:

  • Proof of Coverage (PoC) Rewards: Miners earn HNT tokens, which verify their location and connectivity, for completing PoC challenges.
  • Data Credits: HNT tokens can be used to purchase data credits, which are consumed by IoT devices to transmit data over the Helium Network.
  • Staking: HNT holders can stake their tokens to earn additional rewards and participate in network governance.
  • Exchange and Trading: HNT tokens can be exchanged for other cryptocurrencies or fiat currencies on various exchanges.
Token DistributionPercentagePurpose
Miners (Helium Hotspots)50%Provide connectivity and validate transactions on the Helium Network
Community Pool20%Fund community initiatives and support network growth
Founders and Team10%Allocated to the Helium team and early contributors
Developer Fund10%Dedicated to supporting Helium’s developer community and ecosystem growth
Strategic Reserve10%Held for future network development and expansion
The HNT tokenomics plan.

How Has Helium (HNT) Traded In 2023, And What Is The Helium Price Prediction?

HNT has had a huge year. Its price has rallied to over $8, generating nearly 500% in year-on-year returns. Despite the massive surge, it is still trading at an 85% discount on its all-time high of $54. With a market capitalization of $1.2 billion, it’s a top 60 crypto, according to CoinGecko.

Changelly is neutral to bearish on HNT. They’ve set an average price target of around $8 for 2024 and $10 in 2025. In the long run, they turn more bullish with a $100 target for 2030. AMBCrypto doesn’t expect HNT to post any considerable gains in the next five years.

Remember that crypto prices are extremely volatile, and you should always do your own research before risking your capital. Nothing in this post should be considered as financial advice.

HNT has performed exceptionally well in the past year, posting returns of nearly 500%. Source: TradingView

Final Thoughts On Helium

With its decentralized architecture, energy-efficient design, and reliable connectivity, Helium has the potential to revolutionize the IoT landscape. It is already being used for a wide range of applications, including asset tracking, environmental monitoring, and smart home automation. As the Helium Network continues to expand, it is expected to play an increasingly important role in the future of IoT connectivity. The HNT token has seen a massive price spike in 2023 but is still trading well below its all-time high.

Frequently Asked Questions

  • How is the Helium Network Secured?

    The Helium network is secured through the use of the Proof of Coverage protocol, which relies on network participants to ensure network stability through mining. Proof of Coverage is an advanced form of Proof of Work, which is why the network relies on miners for security.

  • How Can You Buy Helium?

    You can buy helium on several exchanges, including KuCoin, Coinbase, and Bingx.

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