Helium (HNT): Crypto Experts Reveal Why It’s So Valuable

“Helium or “The People’s Network” is a decentralized wireless network. The main goal of the project is to provide a cheap network for internet of things (IoT) devices without any internet service provider. This shared wireless network concept is not new, there have been attempts to create one, like Fon Wireless, but none of the projects had major impact yet.

People can build their own hotspots and are rewarded with Helium Token or HNT, the network’s native cryptocurrency. Miners also earn HNT if they validate the network using proof of coverage algorithm. When an IoT device sends data on the Helium network, it uses a Data Credit. Data Credit is created when a Helium Token is burnt and the exchange rate between them is fixed at $0.00001.

There are some aspects why we think Helium is a unique and valuable crypto project:

1. Rapid growth
The wireless network grew significantly in the last year: there are more than 500k hotspots all over the world as of mid-February, while the number of hotspots was around 14k a year ago. It’s more than a 35 fold increase.

2. Real-world impact
Helium is a unique project as it has an impact on the real world, unlike many other crypto projects. Through physical devices, hotspot owners provide wireless connectivity for real companies and real people.

3. Partnerships 
Helium can significantly boost its coverage and/or usage through partnerships it has made. Companies, like Lime or Salesforce, already use Helium’s network in their offerings. In September 2021, City of San Jose partnered with Helium to provide internet access for low-income households. Based on estimations, 50-100 hotpots are enough for covering a city. GigSky, global data connectivity provider, and Senet, a cloud-based software provider, also will use Helium in their solutions.

On the other hand, there are multiple aspects which network providers/investors should consider when getting into Helium:

1. Optimal allocation of hotspots
While densely populated cities are well-equipped with the Helium network, areas with a smaller population are much less covered. In our opinion, this lack of coverage makes Helium unsuitable for being a reliable standard IoT service. In addition, if there are multiple hotspots in the same area, owners have to share the earned HNT. This can be a deterrent factor for potential owners to invest into hotspots.

2. Competition is fiercing in IoT
Big tech companies, like SpaceX or Amazon, also plan to create a network for IoT. For example, SpaceX’s Starlink project would provide broadband internet through its constellation of multiple satellites that orbit the planet. As a result, Starlink could provide internet in rural and undeveloped areas of the world, typically areas where Helium hotspots are not widespread.

3. Value is driven significantly by crypto craze
We think that a major part of Helium’s value is driven by increasing customer interest in cryptos and speculation. There is a strong correlation between Bitcoin price-HNT price as well as ETH-HNT price. Based on our calculations, the correlation for the last three months is 0.8 between Bitcoin and HNT prices, while 0.7 between Ethereum and HNT prices (1.0 would mean a perfect positive relationship). The huge volatility in HNT price makes the cost of Data Credits less predictable.

4. Lack of listing on many crypto exchanges
Helium is listed on major exchanges, like Binance, FTX, or Crypto.com. However, Helium is not listed on many other exchanges, including Coinbase, which makes it more difficult for investors to get into HNT. Coinbase hasn’t launched Helium yet, but as Helium is a really specific coin with unique structure, we think Coinbase needs more time to thoroughly check it.

Overall, we think Helium to be a unique crypto project, but the low coverage on less populated areas and the emerging competition could significantly affect its future value.”