Helium in 2019: Can it Create a Community of Believers?

Helium is a decentralized Internet of Things (IoT) Radio Access Network (RAN). It provides a public service, built from crowd-sourced infrastructure, that is purchased, deployed, and run by private individuals. Anyone can install a Helium “gateway,” which is equivalent to a base station. Nearby gateways authenticate the presence, location, and, ergo, coverage of one another. The pool of gateways within range of end-points needing to transmit data (designated by Helium as “machines”) will bid for that business, while the owners of the machines will specify the maximum amount of money that they are willing to pay. Machine data is received by “routers,” which are cloud-based IoT applications owned by the operators of the machines. The routers confirm the receipt of the data, thereby authorizing a payment to the owner of the serving gateway.

The first Helium gateways are due for deployment in the United States early 2019. They are branded as “Helium Hotspots” and will be available directly from Helium Systems Inc. In the future, any manufacturer will be eligible to make gateways, as the proprietary Wireless Helium Internet Protocol (WHIP) that the gateways and machines use will be license-free. This minimizes the barriers to entry for designing hardware, helping to seed the market with compatible devices as rapidly as possible. Like LoRa and Sigfox, Helium’s WHIP protocol is intended for narrowband communication and makes use of the sub-GHz Industrial, Scientific, and Medical (ISM) spectrum. Gateways are the mining nodes that provide the monetary incentive for the Helium network’s existence; gateway affordability will directly translate into willingness to deploy them and the effective availability of the Helium service.

Hotspots are priced at US$ 495 each and are currently in a pre-sale phase, with Helium issuing a Hotspot interest form. Hotspot owners set the fee to charge for machines to use their gateways, with machine owners paying per packet transported. A single Hotspot will have a maximum capacity of 325,000 20-byte messages per hour and will use a local Wi-Fi, ethernet, or cellular router for backhaul. The cost of running a Helium Hotspot is intended to be as low as possible, so the unit will purportedly only consume as much power as a Light Emitting Diode (LED) lightbulb. The greater the concentration of gateways, the greater the available capacity, and the more competitive the rates that will be offered to machine owners will be. All fees will be paid in Helium cryptocurrency, with the rules of operation for the Helium system being enforced by blockchain and cryptographic “proofs.”

Helium’s blockchain-based “decentralized machine network” is a means to contrive the rollout of IoT infrastructure when the proof of value for the network has not yet been demonstrated. Private entities purchase Helium’s WHIP routers, which they connect to the internet at their own expense, and in return earn cryptocurrency from the “mining for proof” of either location, coverage, or serialization of IoT data. This is instead of the incrementally compute-intensive “proof of work” mining typified by Bitcoin. Distributed, unrelated, and potentially diverse entities are therefore incentivized to subsidize the Helium network deployment. It is reminiscent of Fon or BT Wi-Fi in the United Kingdom (previously BT Openzone) where consumers’ routers become public hotspots, except in Helium’s case, with blockchain coordinating the unstructured, disorganized network of private “operators.”

To call this a contrivance is not a criticism, but an observation. The only alternative is for IoT service providers to take a leap of faith and invest large sums upfront in a speculative rollout of network infrastructure. Even cellular carriers, bankrolled by a decades-old business in mobile telephony, have had a to take a punt on software-based LTE-M and NB-IoT network upgrades in the hope it pays off. The need to manage the opportunity cost always raises the pragmatic question of where to deploy, in what order, and by when. A practical necessity that is confounded by the fact that patchy coverage inhibits service adoption. There is an irony in that valid IoT business cases for a customer exist when an operational problem has been actively identified and a return on investment calculated--i.e., contracts are only signed when results are guaranteed. Yet no such assurance exists for the operators of IoT networks.

It has been suggested that IoT connections worth less than one dollar per year are uneconomical for cellular carriers to serve, validating Helium’s decentralized strategy. That problem may already have been solved, however, using a standardized transmission protocol, sunk cost infrastructure, and a globally-agreed wholesale pricing strategy no less, by using the cellular signaling channel, as demonstrated by USSD specialists Thingstream. The most numerous IoT connections are expected to be those that are the most affordable, sporting connectivity that needs to be so cheap as to be virtually free--a business model where investment in any new infrastructure could take a very long time to pay for itself, let alone be profitable. It is an observation that suggests that applications like Asset Tracking may be best served by existing networks that do not rely solely on the IoT for their existence.

Helium is not a democratization, but a communization, of the IoT, but can it create a network that is reliable enough to offer any guarantees of availability or service quality? Not only is Helium based on unlicensed spectrum, but on unpredictable infrastructure and tokenized remuneration. Even if the concept proves sound, the cryptocurrency reward must become a successful commodity. Bitcoin took seven years to be worth US$ 1,000 per coin, before beginning two years of outrageous volatility from which it has yet to settle. Early Helium miners may find it takes a long time before initial efforts at enabling the IoT market are worth anything, and they are unlikely to find it easy to scale their reward. Bitcoin miners do not need to be geographically spread out, and single nodes can represent a disproportionately large amount of network processing power, with many powerful servers concentrated in one spot. Scaling with Helium would require many physical points of presence however, an extensive rather than intensive proposition.

Helium’s name calls to mind stability alongside the lightest possible weight (Hydrogen is lighter, but explosive!). In combatting cost, coverage, and power concerns, Helium is entering a crowded Low Power Wide Area (LPWA) market. Its plug-and-play nature is unique, and if Helium gateways became as prevalent as Wi-Fi routers an impressive network could be built. Rollout therefore seems likely to scale proportionately with human population density, which may leave remote locations poorly served, but, in the same breath, may cover most of the market for best-efforts IoT connectivity. However, as with all blockchain-based systems, Helium’s physical, real-world simplicity is in stark contrast to the mathematical logic required to ensure its successful operation. A logic beyond the likely comprehension of the machine and router-owning customers, as well as the gateway-owning miner-service providers.

A lack of comprehension about how the system works could discourage miners and customers from taking part, and the incredible volatility of Bitcoin could tarnish the perceived longevity of blockchain-based systems period. It is unclear whether Helium’s transaction incentives will be great --while also being affordable--enough to compel mass adoption by miners and customers. Plus, Helium’s use of shared ISM band spectrum subjects it to congestion from other proprietary radio technologies. All of which questions its usefulness for business-critical services, the most meaningful and lucrative of all IoT applications. So, although Helium appears to be well-meaning in concept, it may count against it that IoT connectivity should be considered so uncertain an opportunity as to need to rely on crowd-sourced, best-efforts, faith-based models.