Helium Network Overview and Basics
Helium IoT Network Basics
The Helium IoT network has rapidly grown to be the largest decentralized IoT network in the world, with hundreds of thousands of Helium Hotspots deployed as of April 2022. A Helium Hotspot is a specialized IoT gateway that uses the Helium LongFi protocol, which in turn integrates the Helium blockchain with a gateway functionality that maintains LoRaWAN network compatibility for all sensors and endpoints. The Helium blockchain allows anyone in the world to deploy a Helium Hotspot to extend network coverage and earn HNT token rewards in return. Similarly, anyone can deploy a LoRaWAN sensor or endpoint that uses the Helium network by spending HNT tokens, burned (converted) into Helium Data Credits (DCs), to pay for network access. So, in the simplest terms, the Helium blockchain and HNT token replicates the traditional “Network as a Service” (NaaS) business model by rewarding those who provide network coverage with end-device network access fees. Instead of traditional network service contracts or data fees, the blockchain provides a global, frictionless network access model. The Helium network is fully open-source and runs on a public blockchain that gives businesses and individuals equal access to both use the network and expand the network coverage footprint. For in-depth information on the tokenomics of the Helium blockchain, please refer to: https://docs.helium.com/.
Although Data Credits (DC) are produced by burning HNT tokens, the price of DCs is fixed in USD at $0.00001/DC. Once DCs are created, they work like pre-paid mobile phone minutes in that your devices consume DCs from your account to pay for using the network. DC usage is directly proportional to the amount of data sent over the network. For example, having one device send 100 messages per day would incur the same DC cost as 10 devices sending 10 messages per day. Additional DCs can be purchased in U.S. dollars (USD) or generated by burning HNT tokens at any time. DCs are non-transferable and can only be used by their original owner; however, they can be transferred between two organizations using the same Helium Console instance. They cannot be resold or traded.
One DC pays for 24 bytes of a typical LoRaWAN packet, of which 11 bytes is available for the data payload. Any packet that exceeds 24 bytes is rounded up to the next 24 bytes. So a 25-byte packet would cost the same as one with 48 bytes, or two DCs.
The actual cost to deploy a device or sensor on the Helium network can be accurately estimated using the Helium Data Credit Cost Calculator.
Figure 1: The Helium Data Calculator
In summary, it is possible to use the Helium network simply by purchasing DCs using a credit card or USD. More information about HNT token rewards and the economic HNT Burn-And-Mint Equilibrium of the Helium blockchain can be found at Helium.com.