Original title: "In Conversation with Amir Haleem, CEO, Helium》

Original Author: Mattturck,FirstMark

Original compilation: Biscuit, chain catcher

In an industry often criticized for its lack of utility, Helium stands out. new york times recentan articlean article

"The encryption industry may be useful," he said.Helium, a decentralized wireless network powered by cryptocurrency, is currently focused on powering IoT devices and is on its way to 5G. The Helium network has achieved remarkable results over the past few years, building a network of more than 670,000 deployed around the worldhotspot

However, like most "overnight success" crypto projects, Helium has been years in the making. I have had the privilege of seeing the entire development of Helium, first investing in the company on behalf of FirstMark in 2013 (now known as the pre-seed round) and following up several times. Along the way, Helium has spoken at numerous FirstMark events, and was the CTO in 2014Sean Carey,as well as2017andand2018Amir HaleemCEO of

All have great opinions. So it's great to welcome Amir back again to talk about the latest Helium news.

Amir HaleemMatt Turck: What is Helium?

: Helium is an economical system for building wireless networks. The first instance of this idea was IoT networks, and in 2013 we thought IoT was the worst problem in telecommunications. At the time, there were no solutions for connecting small, battery-operated, and inexpensive devices to the Internet.

So our long-term focus has been to solve this problem. How to build a global scale IoT network? We've had a lot of different trials and it's not been right every time, and it's been a very tortuous path.

After being exposed to cryptocurrency, 2016 ushered in a bright moment when we realized that we could empower users with devices, whether they were individuals, small businesses or large enterprises, to participate in the telecommunications industry and use encryption as a method of organization. Helium is an economic system that allows individuals to participate in a global telecommunications network.

The first example is the Internet of Things, and later we enter the field of 5G and cellular networks, and in this direction will also develop a variety of enterprises, whether it is WiFi or fixed wireless equipment, which enables people to conduct global Coordinate to build wireless networks.

Amir Haleem：Matt Turck: Helium has a supply side and a demand side. How does it work?

Even though the Internet of Things has been talked about for more than a decade, it is still like a blank slate, and there is no perfect solution for how to build an Internet of Things that connects to the Internet. So that's not what startups should be doing. Users won't come to IoT just because they've built it, but the introduction of cryptocurrencies will make this approach feasible. The way we chose was to build a supply side first.

The supply side in our solution is network coverage. At present, mobile phone signals have covered most of the human activity areas, and we wanted to build something similar for IoT devices, so we developed a device called a hotspot, which is a combination of network users and wireless access points for IoT devices, using a device called LoRaWAN is a wireless networking protocol designed for extremely low-power things with very long range and very low data rates, so users can only send relatively simple messages, such as GPS location. What makes Helium special is that it makes two things that are very complicated for users very simple.

Antminer is like a shoebox full of wires, these UIs are not designed for users. Also, IoT access points are not designed for users. These are designed for telcos, have a terrible user interface, and require a 48 volt power supply. We managed to combine two user-unfriendly things into one very user-friendly thing.

I think that's the reason for the success. So all a user has to do is use their phone to get a hotspot and set it up, which is similar to the experience of buying other electronic devices. With hotspots now in hundreds of countries, thousands of cities, and 3.5 million backorders, almost anyone can participate in the network.

Amir Haleem：Matt Turck: What about the demand side of the network? What are the emerging use cases?

The demand side has always been the slower part of development. Hardware is not as simple and time-efficient as software development. A prototype must be built first, and each iteration takes weeks or months.

This process is very slow. Therefore, Helium decided that there would be a use case if the network was built. From a normal business perspective, this sounds a little crazy. But our years of experience have convinced us that use cases will exist and there are many, but there is no way to deploy them because of network reasons. It's like you want to develop an iPhone application, but the only mobile phone is a Nokia flip phone, this idea will definitely not work.

There are some use cases out there, like command-controlled drones delivering packages, mousetraps connected to GPS tracking devices, and I think logistics, pharmaceuticals are the most obvious use cases.

Amir Haleem：Matt Turck: Please talk about how Helium actually works, including proof of coverage, proof of location, and the entire consensus mechanism on a technical level.
The encryption framework of the first version of Helium was built in 2016 and 2017. At that time, we already thought that the gas cost of Ethereum would be a problem, and planned to use Helium as a layer 2 network. In a network like Helium, the number of transactions will be very important.

So we're not sure how to proceed, if there will be some state channels coming to life, or if we'll be able to aggregate as many transactions as possible, like how a lot of Ethereum layer 2 works today. Another idea is to fork Bitcoin, take the Bitcoin code and fork it to run.

We felt that none of these solutions were suitable, and finally decided not to run on Ethereum, which is very challenging and the cost is unpredictable. We are driven to build new networks. Some members of the core team have a background in distributed systems, working on things like the iMessage backend, and we're confident we can get this right.

So, the Helium blockchain is layer 1, which is a proof-of-stake network with validators responsible for transaction validation and producing blocks. It uses a consensus protocol called HoneyBadgerBFT. BFT is a Byzantine Fault Tolerant consensus protocol, while HoneyBadger is an asynchronous version that doesn't really care about latency. When we thought it was important at the time. But as the web grows, we're not sure it's still very important.

The validator group has approximately 3,500 validators, approximately one-third of the HNT supply is staked, and users must stake 10,000 HNT to become validators. Today, all of these validators stake approximately $1 billion worth of HNT. The rest of the network is called Proof of Coverage, which is used as an incentive system. Part of the system is creating blocks and validating transactions.

For the most part, this looks just like any other blockchain. The key is what to use the Helium network for? It's for us to reward people for building network coverage before using it. We designed a proof-of-coverage scheme where hotspots transmit encrypted data packets to each other over the airwaves, and the network will reward whoever creates the most coverage.

So a user who can prove to hear hundreds of other hotspots over a wide range will earn more than someone who doesn't. Proof of coverage is designed in this way. Its working principle is very detailed and complex, but its key point is that the farther the coverage area is and the better the coverage signal is, the more HNT will be rewarded.

Amir Haleem：Matt Turck: Let’s talk about tokens and how it works in tokenomics. There is HNT, there is HST, and there is the concept of data credit. How does it all work?

HNT is the main token, a reward for hotspot owners, an income for validators, and a staking function. The purpose of HNT is to enable the creation of Data Credits, a second token in the Helium ecosystem, which can be thought of as stablecoins inside Helium, similar to airline miles. It allows users to wirelessly transmit 24 bytes of data over the Helium network.

But Data Credits cannot be traded, have no speculative value, and even users cannot transfer these tokens. The only function is to destroy them to pay users for traffic. This token system, heavily influenced by Kyle and the Multicoin team, provides users with predictability, with data credits always having the same value. Therefore, for users who build network sensors, the cost of using the network can be calculated no matter how the value of HNT fluctuates.

So users can only create data credits by destroying HNT, which is called burning and minting balance. The burn ratio varies according to the value of HNT, the value of data credit is fixed, and the value of HNT fluctuates.

The third token, HST, has nothing to do with users and is a founder reward system established with reference to Zcash. Most blockchain networks will pre-create all tokens and allocate some of them to the founding team and investors. We don't feel this model is correct. It's a bit unfair to have all these tokens up front for the founding team to sell at any time. Zcash is a system that rewards the founding team and its investors over time, referring to this model, HST holders will receive certain rewards. We think it's fairer. The difference between Zcash and Helium is that HST is tradable, while Zcash founder rewards are not tradable, but they are basically three tokens: HST, HNT and Data Credits.

Amir Haleem：Matt Turck: Incentives are key to scaling the Helium network, but as the number of devices increases and the rewards decrease, how do you see the incentives weakening when it comes time to continue scaling the network?

That's a good question. I think people in crypto have become desensitized to normal rewards or normal ROI. At today's HNT value, early hotspot users earned hundreds of thousands of dollars, or even more than millions of dollars. I don't think that's a normal ROI. In addition, Helium hotspots basically consume no power and have no actual operating costs.

Another question is whether the 50% APR is what people would expect. And I'm not sure if the team or the community has bridged this, but hotspots will get cheaper over time. I think it's been a really bad time in this COVID period with hardware and manufacturing.

This network upgrade, called HIP 55, will result in a significant drop in hardware requirements for hotspots, making hotspot devices much cheaper to produce. These all change the rate of return or incentive calculation. As hotspots become cheaper, users need less income and need less incentive and incentive to participate.

But I think things will stabilize, as network usage increases, I never worry about this, some early users have made enough money and quit the system, this is a completely normal and expected thing.

Amir Haleem：Matt Turck: When we talk about tokens, do you want to talk about decentralization in this regard? Just now you mentioned the hardware and requirements of hotspots. When Helium has delegated the hardware business to the community, Helium itself is not doing hardware business. Can you discuss the structure of the Helium network from a fundamental standpoint?

Yes. There are now about 65 different hotspot manufacturers. We didn't originally build hotspots to be a hardware manufacturer or to make a profit from them, and many people mistakenly believe that Helium Corporation makes money from hotspot sales. We didn't actually profit from any hot sales, nor did we sell licenses, nothing.

It was important for us to build the first hotspot because it allowed us to create a great user experience. All technologies in it have been open-sourced and handed over to third parties. The hotspot ecosystem is as decentralized as possible. The company has no interaction with the vendor other than assisting with technical issues and technical issues over time. Other parts of the ecosystem are similarly decentralized, for example until recently the company did not run node validators.

There are now 3,500 validators, 3,300 of which are community members and others who have purchased HNT or participated in the ecosystem and have nothing to do with us. It's heading in the right direction. I think the difficulty with blockchain decentralization is actually that early core projects, such as Bitcoin, have relatively small groups and enough skills to participate in the project.

From an engineering standpoint, I'd like to see it evolve in a more decentralized fashion, with more input from the community, and with companies playing a minor role in it.

Amir Haleem：Matt Turck: What about governance? You mentioned HIP, what is it? How does the community influence the development of Helium?

We borrow lessons from Bitcoin. Bitcoin has improvement proposals BIP. We have Helium Improvement Proposals (HIP), anyone can submit a HIP. Almost all changes on the Helium Network come from community proposals, not the company. Community-driven in most cases, someone in the community writes the proposal and it is voted on by the community.

Lately, I think the web has gotten to the point where these HIPs now have to contain code, and people have really good suggestions on how to improve the web, but no one likes to actually program to do it. So I think if you want to submit an improvement proposal you need to have the code with it, and then people end up voting on it and it's either accepted or rejected.

Amir Haleem：Matt Turck: How did you determine whether HNT and HST are considered securities by the SEC?

Quite frankly, we have been very careful with the token design and have never sold any HNT, nor pre-mined HNT, have done our best to keep within the regulations.

Amir Haleem：Matt Turck: When can we delegate staking?

Now users must stake 10,000 HNT to participate as a validator, which is about $250,000 at the current price of HNT. There are third-party suppliers in the ecosystem, where users can participate in staking by investing a small amount, but the disadvantage is that users must trust the suppliers. The ecosystem of third-party vendors has been trustworthy and free of adverse incidents so far, and I recommend it for the time being.

Amir Haleem：Matt Turck: Could you please talk about the recent vote that the HNT token will be inflated 1000 times?

I'm not sure it would really be...that's not a vote from the team. A community member proposed to split HNT and rename HNT at a ratio of one thousand to one. So if a user has one HNT in their wallet, they will have 1000 after making the change. I think it's very interesting. I do think there is what people call a unit bias in the crypto world, and I've had hot users tell me straight up that they'd rather earn 1000 cheap HNT than 1 HNT worth a hundred dollars.

So people psychologically like lots of things and imagine that they will be very valuable in the future, and that's where the idea comes from. There is a proposal to rebrand HNT, which I think will happen later this year. Again, it's not a priority for the team to implement anytime soon.

Amir Haleem：Matt Turck: Where do you think the Helium ecosystem will be in two years or five years?

I hope it's this year, we're working with the FreedomFi team on a regular basis and thinking about it, there's all sorts of suggestions in the community. There are HIP 37 and 51 and 52 and 53 proposals. I think within the next two to three years, Helium is the largest cellular network in the United States.

I've also said before that companies like Verizon or T-Mobile have a cellular network equivalent to 100,000 cell towers across the United States, and already have 600,000 hotspots, with another 3 million coming soon. As such, it's entirely possible that Helium will dominate cellular networks within US coverage.

Amir Haleem：Matt Turck: When will Helium's 5G be available?

I think GigSky is the first MVNO to use the Helium network, you can subscribe to GigSky to experience it. There's been a lot of advice in the community on how to implement incentives and how to get involved in 5G, and I think the discussion in the community is going in the right direction.

Amir Haleem：Matt Turck: How does backhaul work with 5G as part of the department's strategy?

The backhaul is the same as the IoT network. We want users to bring their own backhaul, such as with Starlink, which is perfectly valid. The network doesn't care how the backend is connected, only that the connection is good, reliable and stable. We were very excited when we saw the diversity of return options. With technologies like Starlink, it becomes feasible to create a cellular network anywhere, and we have all kinds of conversations with potential partners about how that will work in the future.

Amir Haleem：Matt Turck: As Helium grows and rolls out 5G mobile services, what do you think is the reason ISPs won't cut Helium equipment from their networks?

This is the question I get asked most often, and I don't think it's likely to happen. It doesn't bother me to use my home internet connection for my Helium Inc. business now. Overall, this isn't really a concern of mine.

Amir Haleem：Matt Turck: How does the rest of the telecom industry feel about Helium?

I'm not in the telecommunications industry, I think they're interested in that. We have a good relationship with some operators, such as recently with DISH, LoRa and other operators. But there are still people who think Helium is a Ponzi scheme and crypto is a joke etc. I look forward to seeing their reactions in the years to come.

Amir Haleem：Encryption projects are quite extensive, and weofficial websiteofficial website

There are participation schemes for different entities. But as you said, users participating in Helium are usually hosting hotspots and buying HNT, or operating node validators, providing value to the network.

In terms of use cases, developers have a lot of cheap and easy kits available, reminding me of the iPhone. We could never predict the apps that exist on the iPhone today, and we couldn't predict the Helium apps either. So I've been most interested in the applications on Helium, and the new products and ideas that manufacturers and entrepreneurs are coming up with that use Helium.

Amir Haleem：Matt Turck: Cool. Well, it's been an incredible journey, and in some ways it feels like Helium is just getting started. Thank you so much for coming to speak at this event. Really enjoyed this interview, thank you.