Mining On Helium Network
I previously wrote about Helium Network and how excited I am about it. It’s an interesting crypto project aiming to build a vast, reliable network for all Internet Of Things devices.
So far, it is accomplishing its goal pretty well thanks to the network of community-run nodes.
Mining was briefly covered in my last post. However, I want to dig a little bit deeper into it right now. I primarily will look at the Proof-of-Coverage algorithm that Helium uses and quickly touch on the devices.
Proof-of-Coverage
Helium Network uses a different algorithm than any other cryptocurrency. Proof-of-Coverage, PoC, utilizes hotspots and others in their proximity to issue challenges and verify the results of it. There are three roles that comprise the network: Challenger, Transmitter, and Witness.
The Challenger, as the name suggests, is the hotspot that issues a PoC challenge to another node. The node to which the challenge is issued is not necessarily in close proximity to the challenger. Nodes will issue challenges approximately every 240 blocks.
Challengers generate a temporary public/private key pair for the challenge. SHA256 digests of both keys are submitted alongside the block hash to the network. If the submission is found to be valid, it is accepted by the blockchain. Using the data from the challenge, a random number is generated which selects the challenge target from all available nodes on the network.
From here, we get to the Transmitter. The transmitter receives the challenge packet, decrypts the outermost layer using the appropriate keys, and then transmits the results to the network.
Once the results are transmitted, hotspots in the geographic proximity to the transmitter will hear and witness the packets. Since there are no particular targets for the results, any nearby hotspots can be the Witness. Witnessing is simply confirming the validity of the results.
The earnings are broken down based on the roles they play in the process. As of June 2021, the breakdown of rewards are as follows:
Information taken from Helium website as of June 2021
The distribution of rewards is subject to change after certain periods of time. We covered the top three, but there are two other distribution categories here.
Network Data Transfer is distributed to Hotspots that transfer data from devices on the network. It is proportional to the amount of data that was transferred. As for the Consensus Group, hotspots are randomly elected to the group to perform new block publication and validation of transactions. Members of the group receive a portion of the 6%.
It is worth noting that along with these numbers changing over time, Helium is on a two-year halving cycle. As a result, it is scheduled for a halving to occur at the beginning of August this year.
Devices
There are quite a few different devices available for mining. In general, they are split between indoor or outdoor devices. Each device offers a few differences, so it is definitely worth doing your own research if you’re looking to get into mining.
Mining uses radio technology to send and receive all the relevant data. As a result, you must ensure you purchase the correct frequency for the country you live in.
For a quick overview: Nebra offers two devices, one outdoor and one indoor. From the research I’ve done, it appears that their miners are the most popular brands that are available. At the time of writing, US and Canadian models are sold out leaving only the EU models available. The outdoor model is significantly more expensive at £420 (About $580) and indoor at £300 (About $415). In the same research, I noticed Bobcat’s are the next ones on the list of most popular miners. Bobcat’s model is similarly priced to Nebra’s indoor model at $430, this model is indoor only.
There are a couple more vendors making miners, but they seem much less popular.
Final Thoughts
The initial investment in mining Helium isn’t as large as some other investments, but it isn’t insignificant. Once you find a model you’re interested in, research the area you live in. Calling back to the process of Witnessing, you will find your earnings will sit pretty low if you don’t have any other miners in your range.
Having said that, I still think Helium is a great project. The mining technology is particularly intriguing to me and a quick look on the map shows you can make some really good earnings if your location is right. Even if you don’t have another miner in your range, starting your own could create a domino effect as others begin to see the potential.
The mining section of their website offers the most up-to-date info on earning potentials and devices you can purchase. Like I’ve said, do your own research on the project and see for yourself how they’re looking to change the Internet of Things by providing a solid, reliable network to build on.
