As any project progresses from a good idea to first implementations and moves closer and closer to commercial viability, the nature of access to the project will change. Typically you start off by giving away access for free, just so people can try the thing out. Helium’s LoRaWAN (as all DePIN projects do) went a step further, and issued tokens for those who were willing to put up a gateway, in Helium parlance called a “Hotspot”.
If you put up (“deployed’) a Hotspot and provided LoRaWAN coverage, you earned a token called HNT. In the early days of the network, earning HNT is what drove the explosive growth from zero to about a million Hotspots in the course of around 2 years, as both the amount of HNT earned and the value of that HNT in dollars on the open market made deploying Hotspots a very lucrative endeavor.
If you think of HNT earnings as being like a giant pie, where early adopters got huge slices and many others looked on those slices and made their own lambo plans, you can see where it ends up going. Like any tasty pie, as more and more people claimed their slice, the slices got thinner and thinner, and at this point (June 2023) there isn’t a huge financial incentive solely for providing coverage.
So, that leaves the real work of Helium still ahead: Allowing people to use this network that a community of strangers has built, and as part of that, allowing for and encouraging the support of businesses that build on top of the Helium ecosystem. I should say here before going any further that while I believe building a business on Helium is a reasonable bet, if you’re considering running a business on Helium you should do your own risk analysis and research.
With that out of the way, let’s talk about what will need to happen in order for Helium as a system to build a project with long term sustainability. We should start with a brief review of how the Helium LoRaWAN works, as it’s slightly different than other LoRaWANs in two important aspects.
First, the technical aspect of having an additional step in the journey of a packet of data as it makes its way from a sensor to its final destination of being useful information. This step, through the “HPR”, or Helium Packet Router, causes additional technical hurdles that are surmountable but must be understood by businesses considering using Helium.
Second, the personnel aspect of many people who would never before have thought about touching a LoRaWAN suddenly gaining access to high technology as a revenue stream. In this case I’m thinking of those businesses that might use a service like MeteoScientific (full disclosure, MetSci is a Gristle King Inc offering) for their own use or to upsell clients on a subscription model.
Here’s a quick visual on the flow of data, from left to right, as a “packet” of information leaves a sensor and travels through to its final destination.
Along every step of the way is an associated cost. The sensor is a physical object that costs money to buy, a Gateway costs money to deploy, the Helium Packet Router costs money to operate, as do the LoRaWAN Network Server (LNS) and an Integration, which is where you see and use the data from the sensor.
In this article, we’re going to focus on the LNS options, as this is currently hindering the growth of a decentralized system.
Currently, the Helium Foundation, a non-profit organization with the mission to be a steward of ecosystem development, network governance, and public education, runs a free version of an LNS, called “Helium Console”. Anyone can sign up for it and run up to 10 devices on it, paying the “base rate” of data credit costs, which is $.00001/DC.
If you wanted to run your own LNS, you’ll need to buy an OUI (think of it as a license to run an LNS) which currently costs $900, and you’ll need to host your LNS on servers. Yes, you could scrap together hardware and do this on the cheap. However, for any serious business use, servers in the cloud with a reasonable uptime guarantee will cost at minimum a few hundred dollars a month to run. If you were to hire an expert (like I’ve done) to run servers using the OUI you’ve bought, you can expect your costs to start around $1,800/month.
Staying in business is straightforward; if you can buy the thing for 1 and sell it for 2, you’re in business. Simple in concept, business is deceptively tricky in practice as you face not only the challenge of finding and keeping customers but also the competitive nature of others trying to run their own business. If you enjoy that kind of challenge it’s extremely engaging, but you do want to make sure as much of the deck as possible is stacked in your favor.
That includes making sure there is no reasonable competition that can undercut your prices and sustain their operations.
Having a free option run without a profit motive stifles competition. For example, why would you use the MetSci Console, which charges $.0001/DC, when you could use the HF Console, which charges $.00001/DC?
Of course, there are other significant advantages to using the MetSci Console. On MetSci there is no practical limit on devices, we are constantly adding new decoders and support, it integrates with the MetSci app, and while there’s currently no SLA, we have kept up with a 24 hour response time to all requests.
There is currently no business support for the HF Console and the Foundation has said that they will eventually sunset this Console, although with no date given.
Still, this is about more than just one LNS, this is about developing a decentralized system that supports businesses trying to build on it. In a system where the central player does not have pressure to turn a profit and offers a free alternative, the incentives to build competition are artificially suppressed.
Now, the argument can be made that no one will think of building a business on a model that only allows 10 devices and has no support, and that’s reasonably fair, but the question is: Why offer it all? Why not just get out of the way of the businesses who are trying to build on the network, let them compete on a price/quality basis without unfair competition, and assume that will build a far healthier system?
With that in mind, I’ve proposed that the Helium Foundation shut down public access to their Console instance along with all current accounts with 10 or less devices in order to open up the playing field for a healthy and spirited competition between vendors willing to invest long term in Helium.
I could be wrong about this, and I’d love to hear how and why a better solution exists, so feel free to drop comments below, or comment on the HIP if it gets accepted, or head over to the GK server and join the discussion there.