If you are at all interested in Mining the odds are pretty high that you have at least heard of Helium. To be fair if you are into crypto at all the odds are still pretty high that you have heard about Helium. The network made by the people for the people. But...
Helium, the network made by the people for the people
If you go to Helium's website you are met by tag line along the way of the one I used as a header.
People-Powered Networks. Start a Wireless Revolution Powered by the Helium Blockchain, The People’s Network represents a paradigm shift for decentralized wireless infrastructure.
That is what you will see to be exact. And to be fair, they have really managed to build out a very large network very fast. And at this current moment, there are 936,718 active hotspots across the globe. which is very impressive.
Why then did I call it an unintentional Ponzie?
Source: https://etl.dewi.org/public/question/badaf90c-82ba-4597-97d0-8eab04f3c801
Well, the problem is currently no one is using the network. If we take a look at the data usage we can see that there basically are three components to who is or what is using the network. They are Payment fee, Assert location and Add gateway. And none of them are people or things using the network, consuming Data Credits.
Instead, we have to look really hard to find this data, it is there. It is just dwarfed by everything else in comparison. The Decentralized Wireless Alliance has however aggregated this data for us and in June the total data credit usage for Data Transfer amounted to $6,561. And that is basically nothing.
Just because I like doing it, let us say that the $6,561 was used up evenly across the network. This means that all 936,718 hotspots got an equal share of this pie, I guess you see where I am going with this. They would get $0,00700 for the whole month of June. Or if you will, with that amount of pie they will go hungry.
Where is all the money the miners are earning coming from then?
Well therein lies the problem. And this is why I called it an unintentional ponzie. As I assume this is not what they set out to create, and unlike normal ponzies this actually has a use. The problem is no one issuing it. This means that basically, all the money the miners earn comes from other miners joining the network, hooking up their hotspots.
This is the main component of the Data Credit consumed you see in the charts. And this means that as the number of hotspots gets saturated, meaning more and more hotspots cover the same area. They will drastically reduce the earnings of everyone there. But on top of it all, without any new hotspots coming online it would mean 0 income for everyone.
Will this mean that Helium is doomed? Not necessarily. given that there is a vast network there might be projects that are looking to take advantage of it. But given the type of network, it is, and by Helium's own accord. The network consumes 360x less data than a normal network. It is fair to say that there need to be a lot of data-hungry projects coming online pretty soon for the network for it to survive.
And Helium also appears to have noticed this. As they now have launched a new hotspot network consisting of 5G hotspots. But as they are both more expensive than the old one and as far as I know, there is no real use for this network either, yet. I would recommend people to save their money, and not invest in those. Unless you believe the 5G network will see the same type of growth as the Longfi one, that is the first network. Then I guess getting in early is good. Either way, it is your money and you will use it any way you like.
Also if you would like to get a little bit more info on this, Coffeezilla has also put out a video about it all, where he goes a bit more into depth then I have done here. So I can recommend you give that one a watch if you have found this post to be of interest to you.
What is your thought on this whole situation, do you think there is a project that will come along and save Helium? Or is it doomed to join the other true ponzie project in the depths of dispair? We can already now see the data usage shrinking like the value of most ponzie projects. Please share your thoughts on the Helium project, have you hotspots, or are you looking into getting some? Or are you maybe even thinking about investing in some of the new 5G hotspots? Please share your thoughts on this in the comment section down below.
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See you on the interwebs!
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