I guess my ill will here is with VC firms. Helium has raised 364.8M. With $6,500 revenue? I've talked to about a dozen folks like me, doing small, on-the-cusp-of-success startups, doing 3 to 5x that revenue with nowhere near the exposure as Helium, who get essentially laughed out of the room when trying to raise 500K.
I have a very hard time buying that the founders are ~600x better at fund raising than others, or that the idea even requires that much capital to prove out. Could they have not started with say, one neighborhood in SF, proved the idea, and raised from there?
The only conclusion is that the author of this piece is right - it's a scam to dump the hyped coin onto retail investors. If it ever comes out that A16Z did in fact sell at peak and profited massively from this, I cannot help but feel it is existentially damning for the concept of silicon valley. I say that as a lowly but devoted tech acolyte.
Well, at any rate, my response of being a bit annoyed at "what's your path to 100B" type questions from VCs will now change to "What makes you a capitalist and not a racketeer?".
No, they probably couldn't have. Nobody will build IoT devices for a network that exists in one neighborhood so they built a global network and now they're hoping that devices start appearing. Besides, this kind of "go big or go home" play is exactly what VCs were asking for. I'm still highly skeptical of Helium but there is a certain logic to it.
Try 20 billion dollars lost over 10 years... and still getting investor money (Uber; Lyft will soon be on par).
There's a magic combination of no morals, a product and rampant speculation that investors flock to.
Helium doesn't have $6500/mo profit -- their profit is, in all probability, deeply negative. They have $6500/mo revenue.
The coins are just to convince people to buy the equipment and spread it out. Filling in the grid is more profitable than adding multiple nodes to the same segment. This causes a sort of mlm scheme where those who are 'in the know' are convincing family and friends to install these devices for a share of the profit.
Like with all startups Helium has under 10% chance to make long term and for that upside to realise.
Little too far. I work in the valley, raised a series B, and haven't heard of Helium. Strongly suspect the space is just poisoned.
I've always thought blockchain subsidized mesh networks were a great idea - people provide access via a router, and are reimbursed based on how many other people access the network via their node. Seems ideal, and could quickly and easily scale across an urban area.
Is there some inherent limitation in the underlying technology that prevents this type of distributed system?
First, RF bandwidth is a shared resource. One may credibly complain about the FCC’s allocation of bandwidth, but the big cellular networks work well because they are centrally managed. If every tall building had ten antennas operated by competing token miners, then they would probably have incentives to deliberate interfere with each other, and they would have little incentive to cooperate. The overall results would be much worse than what we have today.
2. Decentralized blockchains are inefficient. Helium would work every bit as well as it does today (hah) if the payments were centrally managed. Of course, it would be more to regulators and law enforcement, which might be a good thing.
ISPs famously overprovision users. While your ISP plan may nominally guarantee some level of bandwidth, the network physically can't support all users using that much bandwidth at the same time.
It's like gyms where if everyone who had a membership actually showed up, there wouldn't be enough gear to go around. The gym's business model completely relies on the fact that most members don't use the maximum of what their plan allows.
ISPs don't want you subletting their bandwidth because that makes it easier to consume all of what your plan allows. They absolutely can't handle a signficant fraction of their users doing that.
So, if a subsidized mesh network were to ever become popular enough to be a viable business, ISPs would simply forbid users from participating in it.
It's just a fundamentally broken business model. It would be like sharing a gym membership across multiple people. Makes perfect sense for the member. "Hey, I only go one day a week anyway, so I can let 6 other people share it on the other days!" But the gym itself straight up could not sustain that at their current membership prices. Their only options are:
1. Forbid it (which is what they already do, since membership is associated with a specific person).
2. Go out of business.
3. Jack up membership prices until they can sustain all members fully utilizing their membership. But that would drive away members who didn't share memberships and make it so that your fraction of a shared membership is about as expensive as a single one used to be.
Fundamentally, you can't pull infrastructure out of thin air. Pretending you can be reselling it won't work.
Or more realistically you could introduce plans with data caps, or “burst modes”.
I think there are a lot of knobs here.
I could see there being value to a fully independent "intranet" local to a geographic region.
But I don't see anything wrong with the underlying technology and the subsidy model. The only hiccup is the expected legal fight from big telco!
And yet, the theoretical (not even real-world) bandwidth for LoRa is in the hundreds of bytes per second; perhaps whole _kilobytes_ if you're giving up most of the range and power savings that LoRa offers for traditional IoT.
On the "small devices exchanging small amounts of data" front, LoRa, particularly for large-scale deployments like the ones Helium resells access to, faces a lot of competition from Thread, Matter, and other "home-scale" mesh options. Until Apple or Samsung puts a LoRa radio in their handsets, it's going to be a niche product. (Unlikely because Semtech owns all the patents on LoRa. One of them might _buy_ Semtech, but I imagine they'd shell out $2 per handset approximately _never_.)
The ToS of the ISP you plugged your "web3 router" into prevent you from reselling your bandwidth.
The data is so cheap that it enables fantastic new applications like yours. Don't stop building. There are many people (not on HN) cheering for you.
There are gateways who are more complicated and more for developers, but of course i don't want to offer these.
To see a a conflict of interest here is like saying that you must not write about the US-Dollar as a journalist as long as you have some. Perhaps it is a conflict of interest if you own a lot of it and do not disclose the fact -- but any? Is this really the case?
No, it's like having AT&T stock and writing about AT&T. As much as web3 fans WANT crypto "currency" to be a currency, it is still, at best, a volatile, high risk investment vehicle.
https://www.google.com/search?q=percent+america+owns+crypto
https://www.google.com/search?q=percentage+americans+have+10...
“virtual currencies” means a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically;
Because they benefit from people investing in this company, isn't that a clear conflict of interest?
Couldn't a similar accusation be levied against a lot of other hyper-growth startups, eg Uber? They were heavily subsidizing rides to grow and might not actually have a workable model if the subsidies are removed.
Yes. Yes it could, and it must. Uber lost over 20 billion dollars over 10 years. It's not a business. It's a speculation and price dumping vehicle.
I purchased a Helium hotspot last year and was drawn in by what seemed like a real use case for a decentralized system - it made sense to me as far as what value was being provided by miners compared to other PoW cryptocurrencies. I was disappointed by the rewards being somewhat low, but I chalked it up to bad timing.
A few months later, the helium network proposed a change which would take a % of rewards away from hotspot operators and gave it to large holders of the token who have staked it(validators). Sure, this change was 'voted' on - but having more HNT tokens gives you more votes. If large capital holders(at least 50% of the supply seems to be held by the top ~25-30 wallets per https://explorer.helium.com/accounts/richest) can outvote those actually providing utility(hotspot owners), then it doesn't really strike me as a particularly fair and decentralized system.
If we took crypto out of the equation entirely and Helium was a startup offering payments in $ while not being transparent about their usage/adoption rates, would we feel the same way about those who "fell for it" and invested in miners? I'm honestly not sure.
I've read additional criticism where bad actors in China operate fake nodes which report as being in the middle of the ocean; using the network browser tool you can see arrays of nodes there. This is far more alarming to me as it indicates that the security model isn't real and the network is compromised.
Since there are now tons of Helium hotspots everywhere, maybe that could be open up the market for more consumer LoRa devices? Not seeing much of it yet though, but who knows.
$6.5k/month is embarrassing.
Personally I looked into using their tech for a semi-remote cabin where I didn’t want to pay for extortionist telecom rates just to turn something on/off remotely, and couldn’t find a good way to do it with Helium.
I would have thought there would be an off-the-shelf thing, but nope.
I think Nova did the right thing by getting out of the manufacturing business, so that those hotspots can go sub $100.
https://www.npr.org/2022/07/22/1113115868/little-house-on-th...
I saw the Helium ad on YouTube a couple years ago and was instantly enamored (yay decentralization) but upon actually checking out the details it became clear it was Yet Another Crypto Scam.
> Using a Burn-and-Mint Equilibrium token model, The People’s Network utilizes two units of exchange: HNT and Data Credits.
Here's a simple heuristic to separate "crypto" wheat from chaff: is a "utility token" involved? If yes, you are probably looking at a scam. If not, scam is less likely.
Here Helium gives off a strong aroma of eau-du-scam in that not just one but two tokens are involved.
Wait, there's more. A few hops through the home page leads to a GitHub repo with the following:
> In order to join the blockchain, every hotspot requires an onboarding code. This code is validated by a staking server and used to onboard a hotspot and pay the $40 staking fee. Currently, these codes are exclusively issued by Helium Inc and validated by their staking server at <staking.helium.foundation>.
https://github.com/helium/HIP/blob/main/0019-third-party-man...
So not only are there tokens, but there's a non-refundable fee to get going.
Maybe it's possible to run one of these projects without it turning into a MLM scam. But given enough time, even the ones with the best intentions seem to arrive at that destination.
And Nova Labs doesn't get any of that onboarding money. That is burned by the network.
And maybe a hint of what about helium people the post addresses?
Stopped reading exactly here. It’s also the first sentence.
https://cen.acs.org/business/specialty-chemicals/Podcast-hel...
At the time of his analysis, the Helium network had about 39,000 hotspots with about 32.5 million data credits spent in 30 days by network customers for data transport. At the fixed price of $0.00001 per data credit, that customers spent a total of $325. On average, each hotspot earned a little over 8/10 of a cent from data traffic during those 30 days.
In the 14 months since that analysis, Helium signed up many more data customers and grew the network to almost 920,000 hotspots. Customers spent about 187 billion data credits in the past 30 days at a total cost of $1.87 million. On average, each hotspot earned about $2 from data traffic during the past 30 days.
Hotspot owners also earn rewards from proof of coverage activity: sending beacon messages and witnessing those messages from other hotspots. Proof of coverage rewards were very lucrative during Helium's first year, but diminished rapidly as more hotspots shared proof of coverage pie. Those rewards also diminished in urban and suburban areas as people deployed other hotspots nearby.
The Helium Explorer [2] lets hotspot owners find locations where proof of coverage earnings remain high. These locations are in smaller communities and on the periphery of overdeveloped metropolitan hotspot clusters.
[1] https://youtu.be/nerQCrOam5U [2] https://explorer.helium.com/
I observed it going "well", with people boasting massive return on investment. I then saw their profits drop, with software updates and faulty equipment being blamed. As a result, people went out and purchased new and more expensive equipment, many buying ludicrously expensive support equipment to improve signal properties. After quite some time of this, I then saw their revenue drop even more so.
Many of these people are invested several thousand pounds (multiple miners, multiple types of miners and support equipment). I see fewer and fewer people post now, with many now accepting their loss.
There is a real cost here, and as per usual, it is the people least able to afford it that pay it.
IIUC each node is a one-way LoRa gateway. literally: a Helium device can only communicate with devices NOT on Helium.
in the LoRa implementation traffic is strictly one-way. a device can transmit sensor/heartbeat data, and that’s it. no ACKs from whatever IP service is ingesting that data, much less HTTP error codes.
the 5g stuff doesn’t really solve this. it broadens the applications — because at least now you can have bidirectional comms initiated from within the Helium network (TCP streams). but you still can’t initiate connections into or even within the network. it’s fundamentally flawed as a “mesh network”, in that it only works so long as a majority of IP destinations aren’t on Helium.