Helium HNT Halving : 23 Days And Counting

By sjbeachy64 | SteveBeachy | 9 Jul 2023

Most involved in the crypto space are familiar with the bitcoin halving and the fact that miner rewards are reduced by 50% every 210,000 blocks. History suggests that there is a positive correlation between bitcoin halving and increases in the price of bitcoin.

While bitcoin miners provide what is called Proof of Work for the network in a similar manner Helium ( HNT ) miners provide what is called Proof of Coverage ( POC ) for the network.

By reducing the rewards of mining HNT as more blocks are mined the halving ensures that the amount of HNT in circulation does not increase exponentially which tends to put upward pressure on its price.

The first halving of HNT took place on August 1, 2021. That means 2.5M HNT are being minted per month instead of the 5M during every month prior. The second HNT halving will take place on August 1, 2023 after which 1.25M HNT will be minted per month.

In the above table, year #1 is 2019. This was when the token issuance began. Then, for two years, the Helium network minted 60 million tokens each, totaling 120 million at year three. During the third year (2021), the first halving took place, and the supply of minted HNT was cut in half for the following two years (30 million each).

After the 2023 halving rewards will be reduced to 1.25M HNT in monthly miner rewards. It will be a small consolation to many in the mining community that in moving to the Solana blockchain validators will be replaced by oracles and there will be an additional 166,666 HNT added to the monthly mining pool.

Many will be upset about reduced mining rewards but the positive which is difficult to measure is the effect of a halving on the HNT token price. Since there has only been one HNT halving there is not much historical data to refer to. You can see below that shortly after the first HNT halving on 8/1/2021 an all time high of $52 was set. Were there other influences ? Yes, in all fairness we were in a spectacular bull run at the time.

There are certain conclusions that we can draw based on what we know about bitcoin halvings.

  • Halvings reduce the rate at which new coins are created and thus lower the available amount of new supply, even as demand increases.
  • Previous halvings have correlated with intense boom and bust cycles that have ended with higher prices than before the event.

The theory of the halving and the chain reaction that it sets off works something like this:

The reward is halved → half the inflation → lower available supply → higher demand → higher price → miners’ incentive still remains, regardless of smaller rewards, as the value of HNT is increased in the process.

The obvious is we already know that our rewards will be cut in half. The unknown is the halving effect on the HNT token price.

When asking yourself whether Helium mining is worth it, consider the risks and rewards. Mining HNT can be an excellent way to generate a slow-growing passive income that becomes more valuable the longer you mine. Mining rewards can accumulate slowly but as the Helium network adoption grows globally its financial promise will buoy the value of HNT.

How do you rate this article?



Crypto enthusiast.


Creating crypto content .

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.