It looks like its transfer season in the crypto world. First it was Ethereum’s Merge and now it’s the Helium network moving over to Solana, after its developers voted in favour of this move.
What’s Helium?
Helium is a decentralised wireless network for “internet of things” devices, powered by cryptocurrency.
Let me break it down
Helium is creating a version of the internet that helps connect electric devices around us such as Fridges, parking metres, dog tags and many more.
The network is made up of devices called Helium hot spots, gadgets with antennas that can send small amounts of data over long distances using radio frequencies.
These hot spots, which cost about $500 apiece, can reach 200 times farther than conventional Wi-Fi hot spots. They share their owners’ bandwidth with nearby internet-connected devices like air-quality sensors or smart kitchen appliances.
Where’s crypto in all of this?
In addition to transmitting data, Helium hot spots owners get rewarded for participating in the network by creating units of a cryptocurrency called $HNT. These tokens can be bought and sold on the open market like any other cryptocurrency, and the more a hot spot is used, the more $HNT tokens it generates.
Hot spot owners can profit when the price of $HNT rises but the main way they make money is by adding new hot spots, not by trading $HNT tokens on a crypto exchange. Outside Hot spot owners, anyone can buy the $HNT token.
So why’s helium moving over to Solana?
The current system just can’t hold up anymore. Co-founder of Helium Amir Haleem described Helium as a massive Jenga-like tower.
“You move one block and the thing starts wobbling, and we've had downtime and outages,” Haleem explained.
As the number of users and use cases on Helium increase, they believe Solana which can handle thousands of transactions per second at peak and its mature ecosystem is a good fit. This is despite Solana’s recent stability issues as the network has experienced periods of downtime.
Big picture: As many web3 projects mature, they’ll have to choose whether to build their supporting infrastructure on their own or collaborate with others. It might be a better route in terms of efficiency and stability to rely on another platform but it requires giving control on making certain decisions.
For instance, what happens when regulators come requesting for information related to Helium from Solana?