Understanding the IoT Leader Helium: Operating and Incentive Logic, Advantages and Disadvantages

Author: Yuan Ben

Editor of this issue: Colin Wu

The practical applications of blockchain beyond cryptocurrency have always been a goal explored by blockchain practitioners. In recent years, due to the rapid development of the Internet of Things (IoT) and its inherent distributed characteristics, the combination of blockchain and IoT in terms of security and edge computing has attracted significant attention and exploration from both academia and industry. Among them, Helium has garnered the most attention.

What is Helium

Helium is a decentralized wireless network, a distributed hotspot network, but it is not a new type of network intended to compete with 3G/4G or WIFI (although the Helium development team is exploring the 5G field). In fact, Helium is aimed at the LoRaWAN protocol (a low-level IoT communication network), and Helium supports devices that use the LoRaWAN protocol, while smartphones and laptops do not support this protocol. In simpler terms, Helium is a blockchain implementation of the LoRaWAN protocol, with its core being the addition of an incentive layer to an IoT network (in this respect, it is very similar to the relationship between Filcoin and IPFS).

The core of the Helium network is the LoRaWAN communication network, which has built an incentive layer through blockchain. It uses the Poc (Proof of Coverage) consensus to prove that HotSpots (wireless routers based on LoRaWAN, similar to WiFi protocol routers) provide network coverage. Miners who provide proof are selected into the consensus group approximately every 30 blocks and receive transactions submitted by other miners, packaging them into blocks.

The working process of Helium is roughly illustrated in the above image. Users or miners connect to the network through HotSpots, which connect to local gateways via the WHIP protocol. HotSpots send data to all gateways, which then add the data to Helium's blockchain, and subsequently, the data is sent to routers, with the devices sending data paying the corresponding fees to the network.

As I introduced earlier, Helium itself is more like an IoT project with an added incentive layer, so the main role of blockchain in Helium is to establish rights and then provide incentives. In other words, the blockchain module in Helium (utilizing Poc consensus) ensures that HotSpots in the network are indeed providing services within their claimed range, and then rewards the devices working in this network.

For ordinary miners, you only need to purchase a compliant HotSpot, and then follow certain steps to install and configure it to join the Helium network. The HotSpot will automatically provide coverage for the wireless network and transmit data, thus earning rewards. Helium officially provides the Helium Console network component to easily manage your devices.

The consensus algorithm used by the Helium network is called Poc, which is a variant of the HoneyBadger BFT algorithm. It is important to note that this is not an abbreviation for the more famous Proof of Capacity consensus algorithm.

The core idea of Helium's Poc consensus is to prove that HotSpots are indeed working in the locations they claim. This consensus algorithm leverages the characteristics of radio frequency (RF), specifically that the signal strength of RF is inversely proportional to physical distance to generate proof.

In fact, every 360 blocks, a role called the challenger in the Helium network (see the specific role's function in the diagram) constructs a data packet called "Poc Challenge" through the P2P network, randomly challenging a role called the Transmitter. The entire process is based on cryptographic principles, and a more intuitive process is illustrated in the following diagram (the two clouds in the diagram represent the same network, separated for compositional reasons).

In the Helium blockchain, there are two main ways to earn rewards: one is that your HotSpot provides wireless network coverage, and the other is acting as a validator in the Helium network.

Every time an epoch (approximately the time of 30 blocks) passes, Helium awards rewards to various "roles" in the network that contributed during this period. The functions of each role are shown in the diagram below.

Helium adopts a dual-token structure, with the aforementioned HNT serving as the blockchain reward. The other type, DC (Data Credits), is used to pay for network traffic fees, currently pegged at 1DC = $0.00001.

The use cases for Helium are not entirely aimed at the general public; it is more like an example aimed at industrial IoT. In its official description, Helium focuses on scenarios such as pet tracking and smart pill bottles. Tushar Jain, president of the DeWi Alliance, stated in an interview that Helium has already provided services for wide-area scenarios such as smart water meters and air quality monitoring. Of course, due to its decentralized nature, anyone can participate in the mining process by purchasing HotSpot devices.

The advantage of Helium lies in its underlying LoRaWAN, which is a low-power, wide-coverage wireless network protocol widely adopted in IoT networks. Its disadvantage, however, is the security issues of IoT networks, where individual sensors within the network are often the easiest targets for hackers, as these numerous and inexpensive sensors deployed often lack sufficient security measures. This is precisely why Helium is also working to further improve the security of its network.

Conclusion

Overall, Helium is a project with a technical core focused on the Internet of Things, where blockchain is merely an embellishment (Helium transformed from a pure IoT project to a blockchain + IoT project in 2018). From a technical perspective, Helium, as a distributed hotspot network, aligns with the development trends of the IoT industry itself, especially in the direction of large-scale low-power smart city construction, which has certain potential and imaginative space.

The combination of IoT and blockchain achieved by Helium is also highly forward-thinking. However, looking at the entire project, it seems that the role of blockchain is somewhat redundant; Helium has not focused on IoT security like traditional blockchain + IoT projects, but merely serves as a guarantee for the incentive mechanism. Not everything needs to be decentralized; it seems that Helium, as a centralized distributed product, may have better development in the industrial IoT field.

Further Reading

Helium Official Documentation: https://docs.helium.com/

Helium White Paper: http://whitepaper.helium.com/

How can blockchain and IoT be combined: https://www.zhihu.com/question/53414917

A guide to understanding the differences between NB-IoT and LoRa: https://zhuanlan.zhihu.com/p/148988301

Multi-tenant technology: https://zh.wikipedia.org/wiki/%E5%A4%9A%E7%A7%9F%E6%88%B7%E6%8A%80%E8%A1%93

What is Helium mining and how does it work: https://www.digikey.sg/zh/blog/what-is-helium-and-how-does-it-work

Innovation creates more possibilities: understanding how Helium builds a new IoT: https://kknews.cc/zh-sg/tech/n2y4me3.html

The Honey Badger of BFT Protocols: https://eprint.iacr.org/2016/199.pdf

A comprehensive analysis of the decentralized wireless communication network Helium: http://www.edenw.net/news/20207

A five-minute analysis of the decentralized wireless communication network Helium: https://www.geekmeta.com/article/3111308.html