Last month, I finally got into the crypto craze. I was dragged into it thanks to my readers along with a large number of commenters on my Helium hotspot post from 11 months ago. It turns out the Helium hotspot that has sat on my windowsill for a little more than a year helpfully providing a LoRa network to anyone within range has also been mining Helium Network Tokens (HNT), which are now worth real money.
I knew it was mining those tokens to create an incentive for people to buy the hotspots and provide more network coverage. I wrote at least two articles on the topic, and was excited by the way Helium was rethinking the economics of a wide area network.
What I hadn’t been focused on were the tokens themselves. Yes, I vaguely tracked the debates taking place in various forums about how tokens were mined and potential forks in the code, but I was operating the hotspot as a grand experiment in IoT networks, not for any hope of future value.
Want more IoT stuff like this? Subscribe to Stacey’s newsletter.
Then last month, after people kept emailing me about HNTs and seeing that the routers were all sold out, I took a closer look at the app. In doing so, I noticed an update that offered me the chance to convert my HNTs to a dollar figure, so I clicked it. And all of a sudden those 1,100+ HNTs turned into $10,876 and some change. (They fluctuate, like all cryptocurrencies. As of Thursday evening, 1,100 HNT are worth $16,500.)
When I told to Kevin about this, at first he laughed at me. Then he told me how I could turn that imaginary Helium money into actual cash. Y’all may roll your eyes, but I can explain what the blockchain is and even understand the concepts behind mining. And yet, for me, the blockchain is best used for building trust and accountability between machines, whereas the entire cryptocurrency market is merely a digression.
Indeed, the market for cryptocurrencies has always struck me as less about tech and more about day trading. I’ve got nothing against it, but it’s not something I’m eager to latch onto, either. Or rather, I didn’t used to be. But with potentially $10,000 in found money from a LoRaWAN hotspot, I decided to open a Binance account and see if I could turn those HNTs into cold hard cash.
In the process, I stumbled upon a Reddit thread full of people asking how to capitalize on the apparent rise in the value of HNTs. There were two classes of poster: the miners, and those who buy and resell HNTs as the price rises. A class of miners was strategizing where they should place their hotspots and how many hotspots would saturate an area, leading to slower mining of HNTs. Someone had also posted about trying to cover a wider area by placing the hotspot on a flagpole on a hill.
I was searching the post replies for a retired network engineer to explain how water, mountains, buildings, and other RF nemeses would affect the HNTs’ earnings potential. It was like watching network optimization driven by day traders — surreal and kind of wonderful.
At some point, after realizing that I had the potential for real money sitting in my app, I showed it to my husband, a man who in college in the late 90s would go to yard sales to pick up old beer signs and resell them on eBay in one of the first efforts at internet arbitrage. He’s someone who can spot an opportunity.
He looked at the volatility in the HNT market and raced up to my office to tell me exactly when to trade those HNTs I had moved into Binance for cash. We ended up transferring about 700 HNTs into the platform and converting 600 or so to cash. We then transferred $5,000 (which was the limit at the time) to our bank.
We subsequently moved additional HNTs over to Binance, where we’d convert them when the price of a token rose to $20. When our conversions reached $5,000, we took that out and left the rest, with some of the HNTs in Binance and the rest in the Helium app. The price of HNTs has since fallen to around $15 each. I currently have about 450 of them, with a few more getting mined each day.
I was bemused by the whole experience. I had turned my nerdy thrill of hosting a public LoRa hotspot into $10,000 and based on the current price of HNTs, stand to make about $5,000 more — all while my hotspot keeps on mining additional HNTs. It’s like finding money on the sidewalk.
But I still can’t say why these tokens are rising in value. The idea is that customers who want to use the Helium network of public hotspots use HNTs to buy data credits on the network. A data credit is worth $0.00001, which means that $1 gets you 10,000 data credits. When an HNT buys a data credit, the HNT is burned, so as people use the network and buy more data credits, the overall number of HNTs could drop (although more are continuously being mined).
A data credit is worth a packet of data on the network (roughly 24 bytes), which is enough to send a GPS location, time, and temperature, or another bit of data. If you had a sensor transmit every five minutes, the year-round cost would be $1.05 on the Helium network.
Customers are already using the network. A company that makes mousetraps has decided to connect its products using Helium, while a university is using it to building connected products for the school and students.
Frank Mong, the COO of Helium, can’t explain the fluctuations in HNTs, but he’s thrilled to see all the excitement around setting up hotspots. Every time someone sets up a hotspot to mine the tokens, Helium gains another geographic area with LoRa coverage. In other words, Helium’s original idea for setting up a low-cost network for IoT devices is finally working.
“We are getting closer to our dream of creating the right kind of tools to connect sensors in a low-cost and open manner,” Mong told me. “And this incentive structure using cryptocurrency could be bigger than LoRaWAN.”
If you want to get involved with the crazy world of network crypto, be aware that because of the global chip shortage and high demand, there is currently a back order of 150,000 hotspots. But if you’re like me and want to provide network coverage for a burgeoning IoT network — and maybe pick up a bit of cash as everyone dives into cryptocurrencies — I can think of worse ways to spend the roughly $400 it costs to buy a hotspot.