What is Helium?
The Helium network has successfully completed its new light hotspot upgrade. This is a major milestone for the blockchain, as it unlocks crucial storage and performance benefits. What does it all mean? First, we have to understand what Helium actually does. Also known as the "People's Network," Helium is a public blockchain utilizing devices called hotspots to create a global wireless network.
These devices are typically can be run by any person or organization and are made by different companies such as bobcat. It works by the hotspots "gossiping" connections with each other in a new form of consensus called proof-of-coverage, which is based on the Honey Badger BFT algorithm. When a hotspot "witnesses" another hotspot or performs another action like beaconing its connection, it is paid with Helium's native coin HNT. There is a second token involved with the Helium network, called data credits, which are fixed at $0.00001 and are created by burning HNT. Data credits are non-exchangeable, tied to each user uniquely, and are used to pay data fees on the network. Impressively, as a result of a fresh network initiative, new hotspots are now being manufactured that allow 5g connectivity.
As the Helium network has scaled, there have been numerous positive developments, such as the DISH network using the Helium network for 5g coverage, and the network hitting 800k hotspots; a 700k increase over 2021. Famous investor Kevin O'leary also holds HNT in his portfolio. So, what happens next with the network?
The light hotspot upgrade fixes the network
Along with these positive occurrences, there have been many issues involving hotspots, which led to the light hotspot upgrade. As the name implies, all hotspots are now "light." But what exactly happened? Even though many have thought it was a new type of device, it was actually a complex upgrade to the network's node software, fundamentally changing the way hotspots work.
Before this software upgrade, hotspots had to sync an entire copy of the blockchain. While this is good for data integrity, it bogged down most hotspots, since they also have to participate in proof-of-coverage by transferring data packets. In fact, many users reported that they had to upgrade the SD card on their miner since the blockchain size grew too large. In response to this, hotspots no longer keep a copy of the blockchain or make geographic challenges, shifting those tasks to a new type of network device called validators. Introduced a year ago to smooth the upgrade, validators are now essential devices in the Helium network. At its simplest, they are devices with far higher storage and computing capabilities than hotspots. Validator nodes are now responsible for validating transactions brought on by proof-of-coverage and adding new blocks to the chain.
Most important of all, this upgrade eliminates the concept of "relaying," which is when a hotspot would go offline due to bad connectivity, and is connecting through another hotspot to receive earnings. Now, all relayed hotspots are back online.
A bullish future
Helium is a robust blockchain powering a network of IoT devices. Even though the initial focus was low powered devices like sensors, Helium is now expanding into cellular connectivity. The light hotspot upgrade is a significant event in the Helium roadmap that will pave the way for millions of new devices and users to join the network. Since hotspots will no longer go offline, network stability will increase significantly.
The market has been on a strong downtrend for over a month now, leading credence to the suggestion that we are in a bear market. The HNT price, has dropped steeply from $20 to $10, but this is simply due to the market environment. Completion of the light hotspot upgrade is the catalyst needed for a rebound, even if it might take a little while.