A clickbait headline admittedly, yet the explosive growth of the Helium network is not unlike the spread of a powerful meme or a contagious condition.

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Cryptocurrency has always been a solitary endeavor: stake in a pool, operate GPUs, trade the market, or click-to-compound in a yield farm (reminiscent of swarmsim.)

Helium is different. Helium brings to crypto the #1 rule of the oldest asset class: location location location. As I recently pointed out, well placed nodes are 40x more productive than poorly placed nodes. This effect creates huge pressure for an enterprising individual to work his or her network to spread out geographically.

Viral MLM

Helium operators have all experienced it. You just finished an install, then as if by instinct, the host states: I can get more locations. What’s my cut? Congratulations: you are now a Helium superspreader. And believe me, the idea of Helium is contagious. It rings in your head like a bell. It’s like learning about bitcoin for the first time. The simple rules dictating Proof of Coverage produce amazing emergent social behavior — it’s an effect to behold.

These days, everybody knows the measure of a disease virality is the basic reproduction number (R0), defined as the average number of people infected by a contagious host. According to the NIH, COVID-19 R0 is between 2-3 by most estimates. What is the basic reproduction number of Helium? Let’s take a look.

Getting quantitative

Calchip and Bobcat have disclosed the average order being about 2.5 to 5 nodes per order. At the time of writing, there are 48k wallets and 146k hotspots, for an average of 3 hotspots per wallet. If we take the average of these numbers as the reproduction number, then we wind up with a number on par with COVID R0 estimates. So perhaps in a very crude way, we can answer “The Same” to the question posed in the title :)

The full distribution of hotspots & wallets sheds more light. Over half of all hotspots are owned by wallets containing less than 10 hotspots, who I dub the weekend warriors. The top 4.5% of wallets are the superspreaders, with between 10 and 70 hotspots to their name. (Yes, I know it’s possible for one person to create many wallets, but I argue the current tooling and hotspot onboarding experience makes this infeasible.) The heavy hitters, ie Hosting companies, own about 25% of all hotspots.

Class	# of hotspots	% of wallets	% of hotspots
Weekend warriors	1 to 10	95%	55%
Superspreaders	11 to 70	4.5%	20%
Hosting companies	71+	0.5%	25%

Helium Inc has confirmed 500K preorders across 50 manufacturers, and 2 million in production. Frank Mong, COO, quoted a chipset backorder as high as 3 million in a recent interview. For each order, that’s a cascade of retail users exposed to Helium and possibly crypto for the first time. Helium is like Alexa meets viral multi level marketing, except instead of selling lotion and vitamins, we’re building something obviously useful.

The idea of Helium just clicks and is sweeping through retail like wildfire. Watch out world.

I’m going to channel my inner Michael Saylor and soliloquise on the potential of Helium to dematerialize the telecom industry by removing hurdles of large scale network deployment (permits, man power, equipment costs) through utilizing the most over the top insane incentives ever devised in the crypto space. Like Amazon dematerialized retail and Google dematerialized paper maps, Helium will dematerialize telco infra by empowering individuals to bypass hurdles plaguing the industry. Helium empowers the individual like never before by offering unprecedented network build-out incentives and is rapidly constructing a powerful moat in and out of the crypto space.

Turn your view into money

Say goodbye to the relics of a bygone era (left) and hello to cell towers of tomorrow (right).

Traditional network build-out is a nasty proposition only stomached by entities granted monopoly rights over a scarce resource. Even in the smaller IoT domain, building coverage is an exercise in pain. To quote @wlazar

“[traditional IoT networks] take a few years to design and deploy before they could be fully operational… [we] had to negotiate access to limited pole mounting infrastructure…the sales-> network deployment cycle could take years.”

Helium is a lower energy state of network deployment – why coordinate with a municipality to erect eyesores and fight NIMBYs, when an equally productive location lies in a SFR a few blocks away, AND the owner does the installation for you, all while taking marching orders according to blockchain which is the most powerful coordination mechanism ever conceived by man. Helium turns NIMBYs to YIMBYs.

Helium represents a completely new way to monetize location and foot traffic because productive hotspots collectively represent thousands of permits not applied for, thousands of man-hours not billed for and millions of dollars of corporate debt not taken up, but with the same end result as the old way of doing things: ubiquitous and effective network coverage, but in 1/10th the time.

Phenomenally aligned incentives

The “Chinese Warehouse” model of crypto mining doesn’t work for Helium for the same reason you can’t fake the speed of light. Helium mining rewards are inexorably tied to providing verifiable and valuable wireless coverage across a geographic area. People are risking life and limb to climb roofs and towers in order to deploy the best wireless coverage possible for Helium. Let that sink in.


The Helium earnings S curve.

Above shows the distribution of June 2021 mining rewards according to the aforementioned guidelines. The elite top 5% of nodes outperformed the bottom half by a factor of 10x, and outperformed the bottom quarter by a factor of 40x (validators will affect this, but I don’t expect much). What other project offers a 10-40x premium on the same kilowatt hour of mining, just by setting up in the best deployment location?

In other crypto projects, the mining edge comes from access to cheap or subsidized electricity, or economies of scale from warehouses full of equipment purchased at-cost. With Helium, the difference between so-so and phenomenal performance comes from erecting a 10ft mast or striking a deal with your neighbor who has a better view. This incentive produces a never-before-seen bridge from the crypto domain to meatspace. As in real estate, for the first time ever in crypto, it’s about location location location.

Helium is unforkable

The open source crypto community is cutthroat. A small motivated team can fork your code and scoop the market from beneath your feet – just read about the ongoing food-DEX saga or a million other copy-forks just like it. However, in the same way you can’t download a car, you can’t fork thousands of man hours needed to place antennas in the Hollywood hills or high up on a mast. Any incumbent will need to fight just as hard to produce equipment and put that hardware in the hands of enthusiasts willing to hustle (or risk their life) to achieve 40x greater productivity than the rest of the nodes in town.

Hardware lead times are a law of nature, even outside of a pandemic. Helium is adding over a thousand node installations a day, each node representing a person climbing their roof or striking deals on new locations. Most installations are still done by individuals, but enterprise scale deployments are coming — soon. This momentum may be slower than a typical hash rate growth curve, but at the same time its unforkable and not subject to the changing moods of hash power profitability.

Helium is a platform

This year Helium is welcoming a new wireless spectrum outside of LoRa in the form of CBRS 5G in the United States. Freedom-Fi, the first Helium partner to dip their toe into this space, expects to ship hardware in September. Via Discord, they claim to have agreements in the works with 3 data-offload partners, two of which are American MNOs, one being tier-1 (think Verizon, AT&T, T-Mobile), and one MVNO aimed at the prepaid e-sim market.

Fundamentally, this new element of Helium does a few powerful things. To individuals and businesses, 5G CBRS offers new means of monetizing location and foot traffic. Have an apartment across the street from a popular park? Sell 5G data to the visitors. Own a nightclub? Monetize the social media addicted clientele.

Due to B&M economics, HNT must be burned for each 5G packet consumed, so the tokenomics are inevitably aligned to the mobile data consumption growth curve — which is expected to climb by a factor of 5x in the next 5 years. According to analysis from one of architects of the Helium economic model, if Helium can reach $5M Data credit burned per month (~10M GB consumed at $.50/gb), this raises the equilibrium price of HNT to $100. Approximately 3 Billion GB of mobile data transfer occurs every month in the US (link), so 10M GB/month is about .3% of all mobile data.

I know, I know, how many start up pitches begin with “If we can only capture 1% of this enormous market, we’ll all be rich…” But, being real, 5G usage isn’t even priced in yet and we are still realistically 6 months from seeing any real deployments. I personally think Helium could become the largest neutral host carrier in the next 1-2 years.

There you have it. My bull case for why Helium is in fact a different breed entirely from other crypto networks due to entirely novel incentive mechanism and ability to side skirt problems faced by the incumbent industry.

Intro

The Helium network is growing at breakneck speed, and for every new entrant that means another node in which to split a fixed block reward. However, the reward division is not clean cut, after all it depends on coverage provided and proximal node density. Everybody knows how much HNT reward they earn, but is the node performing well? Another related, and more tricky question to answer is where are rewards going after the network 10x’s in size? The rest of this article will lay out some numbers to answer these questions.

Analysis

First, some ground rules: for a node to be eligible in this analysis it must meet two criteria. This is done to filter out new nodes and nodes with too much downtime. Any node in good working order, even lone wolves, won’t have a problem satisfying these conditions.

1. In a 1 month span, a node must have at least 25 reward events.
2. A node’s first and last reward in a month must be separated by at least 25 days.

The analysis consists of 500 randomly selected nodes, with HNT tabulated over 31 days. I’m not filtering for known gaming populations, consensus elections or any location in specific. To do all this I queried the Helium API and used a statistics package. If you want the python let me know.

One thing to keep in mind – on December 16th 2020, the Helium team officially pushed a major reward change in the form of HIP15 / HIP17 (see this great video to understand the concepts). This makes it difficult to draw parallels from 2020 since that reward structure operated under a different set of rules. Don’t forget the monetary policy shift of HIP20, which introduced a max supply cap and halving schedule! Come August, all of this analysis will be turned on its head as rewards reduce by 50% over night.

Growth and reward

As of March 2021, the Helium network is seeing tremendous growth. Helium team members fully expect from at least 100k, maybe 200k nodes by the end of 2021 [1]. Which is nuts.

This is a box plot of five 1-month snapshots in time. (Need a box plot reminder?)
A few points on the box plot graph:

• The blue line connects the means (don’t confuse mean with median!)
• The “box” contains two middle quartiles. The middle 50% of earners live in this box.
• The Nov 2020 to Jan 2021 transition is interesting, because it shows the impact of HIP15/17.
• HIP15/17 had a democratizing effect on earnings: the middle 50% of earners earned more because the box shifted upwards towards greater earnings. The end result of HIP15/17 is a big clump of people on the bottom end of the spectrum (10-50HNT/mo) actually earned more after the HIP15/17 drop.
• Ultra high end earners saw a slight dip after HIP15/17 dropped.

Another way of showing this information is with a cumulative distribution plot.

A few takeaways:

• If your node made ~120 HNT in February 2021, you did better than 50% of people.
• If your node made ~550 HNT in February 2021, you did better than 90% of people.

January to February had modest growth in node count, adding about 3000 (20% overall inflation), and the 50th percentile monthly reward shrank by about 10% and the long tail rewards by about 15%. As the network continues its march to 100-200k nodes, we will see the CDF lines shift left as everybody makes less and less HNT. So far it looks like the low & high ends are more affected by node dilution.

Where from here?

Adopting the Jan to Feb trajectory as a simple rule (20% node inflation = 10% drop in 50th-% rewards, 15% drop in 90th=%), the rest of the year looks a little bit like this.

Observations:

• By 50,000, your 50th percentile node brings in 70 HNT monthly.
• By 100,000, your 50th percentile node brings in 45 HNT monthly.

This is my 5 minute back of the envelope projection — no doubt there are better ways of modeling this. As the great 2021 gold rush plays out I may refresh it.

Conclusions

This post is a long winded way of saying it’s great to be an early adopter in a promising project :)

2021 will be an exciting year for Helium. The project has already captured numerous “world largest X”, and there is still a clear path to 10x’ing node coverage within 12 months. What will the headlines say in 2022? What fantastic new use cases will emerge for an ever present network, unconstrained by battery life and Big Telco costs? Temperature sensors, weather stations, rat traps.. those have great utility, but are frankly pretty boring. We’re just scratching the surface.

There are a few reasons in the Helium world why you might want to turn a raspberry pi into an ethernet router. However, what I care about is a customizable approach to cell backhaul. As it stands right now all off the shelf Helium miners are essentially black boxes with no SSH, no USB, and no real interfaces except through the app and any bluetooth switches. So the goal with a DIY ethernet router is to create a machine which forwards internet from another location to the miner, from which you can load up with all sorts of customized solutions.

Now, a warning. Doing this is fraught with pitfalls and unexplained bugs. I have figured out a sequence of steps which works for my setup, but inevitably some things can change which screws up this carefully choreographed setup.

A few tips before starting

• Have another SD card with a fresh raspberry pi reflash ready to go. Starting from scratch is quicker than undoing whatever mess was made.
• You need local access to the raspberry pi. If you’re SSH’ing over wifi, its going to cause trouble.
• I have tried this on Raspberry Pi OS and OS Lite (32-bit) dated from late December 2020 to January 2021. Use the official Raspberry Pi SD card reflasher tool.
• Tested on Pi 3b+ only.

Routing usb0 to eth0

The behavior I want is that any device connected to the Pi via ethernet cable will view the Pi as a router. The Pi will assign IP an address and function just as a router, forwarding any source of internet to the connected device. To do this there are prerequisites and certain scripts must be run on the Pi.

Step 1: install dnsmasq

This is a straight forward and easy step. sudo apt-get install dnsmasq

Step 2: install the internet routing script

This step is the most troublesome. There are many instructions to accomplish this on the internet, however, this is the only reliable way I have found to accomplish what I am after. Here is a list of instructions which didn’t work for me: [1][2][3][4]

Back to what worked:
curl -O https://raw.githubusercontent.com/arpitjindal97/raspbian-recipes/master/wifi-to-eth-route.sh

Move it to /pi/home/
sudo mv /downloads/wifi-to-eth-route.sh /home/pi/wifi-to-eth-route.sh

Give the right permissions
sudo chmod 755 wifi-to-eth-route.sh

Step 3: modify for your needs

!! Important !! You need to change one line depending on your internet channel configuration. By default, wifi-to-eth-route.sh will forward wlan0 to eth0, in other words forward wifi to the ethernet port. I want to change that to forward usb0 to eth0. Usb0 will eventually be the name of the cell internet portal. Depending on your exact Pi Hat situation, it may also be called wwan0.

With nano,
sudo nano /home/pi/wifi-to-eth-route.sh

Change this line:
wlan="wlan0"

To:
wlan="usb0"

Step 4: finish the config

This script needs to run at boot. To do this, run these commands: sudo nano /etc/rc.local

Add this command before exit 0
bash /home/pi/wifi-to-eth-route.sh

Test it by connecting a device by ethernet to your Pi. It should go straight into an automatically assigned IP address with internet connectivity.