You can find an up to date version of this article here.

Summary:

  • By hosting a Helium hotspot you can earn HNT tokens for providing network coverage.
  • Token earnings depend on your geographic location.
  • By hosting a Helium hotspot you can earn HNT tokens for providing network coverage.
  • I cover the risks and opportunities for hosting hotspots.

What is the Helium Network?

Helium.com provides a communication network for low powered devices that need to transmit small amounts of information, for example:

  • Water flow meters
  • Geo-locator tags (e.g. a tag you can attach to your keys to find them if they are lost)
  • Small weather stations

The idea is that, instead of using expensive cellular networks, devices can use the Helium network.

Helium network coverage is provided by a mesh of decentralised hotspots that people host in their homes. Each hotspot has a reach of a few kilometers, and, when there are enough hotspots installed in an area, that provides a network.

When I bought my first hotspot in September of 2020, there were around 5,000 hotspots in the world. At the time of writing there are over 80,000. Here is a map of the current coverage, where you can see over 90,000 hotspots deployed worldwide:

explorer.helium.com

What do hotspot owners earn?

In return for providing coverage, hotspot owners receive Helium tokens (HNT). As an example, here is a hotspot in Boston:

Over the last 30 days, the hotspot has earned 15 HNT, which is currently worth around $150. Compare this to the approximate cost of a hotspot of $300. You can see in the above chart that there are now a lot of hotspots in Boston. The network incentivises owners to expand coverage to low coverage areas. Therefore, it is best to have a hotspot somewhere without many other hotspots. However, you do need some hotspots in the area - otherwise yours has none to connect with.

Where do the earnings come from?

Helium is currently printing tokens and using them to incentivise network adoption. This printing of tokens is slowing down over time (it will be cut in half in August 2021) so earnings - denominated in HNT - will fall.

What can HNT tokens be used for?

HNT tokens can be converted to datacredits, which are used to pay for use of the Helium communication network.

Where can I get a hotspot?

Buying Directly: Since rewards are so high, there is massive backordering for hotspots. There are a number of manufacturers. I recommend RAK because they shipped on time to me. Do be careful and read reviews because some manufacturers are unreliable on their promised ship dates.

Buying Used: The other option is to buy used on eBay, for example. Current prices are about $2,000 (instead of the ~$300 sticker price). This approach can be risky so take caution in reading reviews.

My recommendations:

  1. As with newer cryptocurrencies, be ready to lose your full investment in a hotspot. Don't invest any funds you can't afford to lose.
  2. Look up where you live on explorer.helium.com and check out what hotspots in your locality are earning.
  3. If you see high potential to earn, consider buying a hotspot on backorder with RAK or Bobcat.

Risks of owning a Helium Hotspot:

  1. HNT Token Price: The entire basis for current returns is the HNT token price of ~$10 . If this token falls - say to $1, where it was in 2020 - then the return on investment will go from months, potentially to years. A fall in HNT is very possible.
  2. Rapid growth in hotspot numbers: Last year there were 5,000 installed when I bought. There are now over 90,000. This means that there are fewer rewards to go around on a per hotspot basis. Expect returns to fall because of this, and also because the total number of rewards being issued falls over time.
  3. Hotspots getting outdated: Current hotspots support a low bandwidth network (suitable for transferring small amounts of data). At some point, the network will get upgraded and hotspots may become outdated. It is unclear at present when this will happen.

Subscribe on Pinotio.com to get access to parts 2 and 3 of this series on Helium.