On September 20th, the founders behind the IoT network Helium announced a partnership with mobile operator T-Mobile. Both want to work together on a decentralized 5G network called Helium Mobile. This describes itself as the world’s first “crypto carrier”.
The service is scheduled to start in the USA in early 2023. Both T-Mobile and Helium’s 5G network will then bring high-performance, mobile Internet to users’ smartphones. As with ordinary mobile phone providers, there should be different tariffs. These should be available from as little as five US dollars a month and would therefore be significantly cheaper than conventional tariffs. In addition, customers can mine so-called MOBILE tokens.
Helium Mobile even promises: the larger the network, the lower the costs. At first glance, that sounds like a promising vision. However, the IoT project has not been entirely without controversy in recent weeks.
Allegations against founders
The vision of a global, decentralized network for the Internet of Things (IoT) earned Helium the reputation of the “People’s Network”. A report by the business magazine Forbes recently raised serious allegations against the founders of the blockchain. These are said to have hoarded a large part of the HNT tokens at the start of the project. According to Forbes, a quarter of the tokens were mined by insiders in the early months of the blockchain.
Not a particularly “human” image for the project. Especially since this lives from its numerous nodes, in the form of individual users. The concept behind Helium is indeed promising. Users prove that they are making bandwidth available via their modules via the proprietary “Proof-of-Coverage” consensus mechanism. This is how they mine the HNT tokens. The network is intended to provide global connectivity without a centrally installed infrastructure.
Helium has grown enormously in the meantime. And actually this growth should benefit the individual nodes. However, in recent months, there have been complaints from users about increasingly declining mining rewards. The project’s Reddit forum is littered with posts from users earning little to no HNT. However, the modules for providing bandwidth often cost several hundred US dollars. For many junction operators, this will not pay off in the long term. Some might turn off their devices altogether. Tech entrepreneur Liron Shapira sharply criticized the project for this.
Switch to Solana
Amid the debate over falling rewards, the project announced plans to switch its infrastructure to the Solana blockchain. Large parts of the Helium blockchain, including the token, the governance structure and the proof-of-coverage consensus mechanism, will then run on Solana. The developers behind Helium hope that this will increase the scalability and interoperability of the protocol.
However, Solana has been known more for its network outages than for advanced scalability in recent months. Technically, the blockchain mainnet is in beta testing phase. Further failures could also cause disruptions in the future helium network. It is therefore questionable why the developers at Helium want to expose their own blockchain, which has been running relatively well so far, to this risk.
In any case, the community agreed on the change: 81 percent voted for it. They seem to be hoping for a new blossoming of the IoT project.
Because despite the growing headwind: Helium still has the potential of a leading Web3 application. Like many young blockchain projects, the project suffers from the usual teething problems. The vision is promising, but the technology is not quite ready yet.
Partnering with T-Mobile could give Helium a boost toward mass adoption. However, the project must remain loyal to its users.
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