Helium is the project that started it all, but the DeWi space is rapidly growing. With that growth come questions, mysteries, and opportunities. New players, both known and unknown, are entering the mix. As the idea of 5G starts to really get legs, one question you should constantly be asking yourself is, “What is the state of the space?” I’m glad you asked…
The thing we call “Helium” is now at least 3 separate entities (Nova Labs, the Helium Foundation, and it could be argued, the greater community of Hotspot owners). Helium may eventually stand to mean the entire decentralized wireless space; it certainly created it. For now, let’s start with a useful beginning point, which is somewhere in 2020, when the first Helium Hotspots were being sold.
Helium started by playing in an uncontested space: Building a global LoRa network. Until Helium came along, most of us neither knew about nor cared about LoRa. I mean, I did, but only as far as it was useful to me in my paragliding endeavors. That’s how I found Helium, but that’s another story.
Helium, using a token as an incentive, deployed a global network of 800k+ LoRa gateways in about 2 years. They did that on the cost of the salaries for a few dozen people plus the first whack of cash to do a production run of what would ultimately be less than 1% of the Hotspots/nodes/gateways on the Network. No one else had done anything close to that before, no matter how much cash they had.
Helium started with LoRa because it was uncontested. The Helium team knew they would eventually get to a point where they entered contested space, whether that was 5G, WiFi, or all data flow on the planet. Before they showed up for the big game, they wanted at least a scrimmage under their belt. LoRa was that scrimmage.
That test game taught them a lot. They were far more successful than they’d hoped to be. Now, success isn’t always rainbows and HNT, and part of the rapid and unmitigated success played out in an angry crowd of customers who didn’t understand what they were getting into, or how it worked, or what to expect. Overwhelming growth also highlighted faults in the engineering and governance plans they had.
Of course, faults were expected. Every good engineer knows that you don’t get it right on your first try, and when your first try blooms into a global network you’re going to have global problems to go along with it. Helium is stacked with excellent engineers, so while the individual issues may have been surprises, everyone on the Helium team expected significant turbulence along the way, and they got it.
Now, most of us didn’t think about all that. We weren’t asking, “What can we learn from building out an esoteric global network in an uncontested space?”
The vast majority of people deploying hotspots were doing so because, as Steve on the DeWiGo blog has said, “People just want crypto.” I get it. I’m one of those people, just like you. Still, as the dust settles and thousands of people are realizing they aren’t going to be earning that much crypto, you’ve got to wonder:
What did we just build? What lessons can we learn? What lessons did the venture capitalists learn? The big telecoms? How does this direct our next actions?
When you think about in terms of lessons learned, it helps re-frame the questions that you ask about the next project. If I’ve learned anything in a few dozen spins around the sun, it’s that the questions you ask determine the outcome you get.
Let’s start with a few lessons learned. Keep in mind that some of these lessons may not seem important to you. They may seem to only apply to venture capitalists or big companies. You may want to skip them. Don’t. If you’re going to invest your blood and treasure in a project and you want returns on that, you had better be able to see the thing from every perspective possible, large and small.
Let’s begin with a lesson for people thinking about building the next big decentralized network. These are the engineers, the investors, the students, the dreamers who saw what Helium did and thought, “I can do better.”
First and obviously, building a decentralized network decentralizes what are called “CapEx” for “CApital EXpenditures”. A normal person would call that cash. It also means you can keep OpEx, or OPerational EXpenditures low, because all you have to do is maintain a network someone else built. You might think of OpEx as “payroll” and “tech support”.
Translation: It’s relatively cheap to build and maintain a giant global decentralized network.
Implication: Expect many more decentralized blockchain + meatspace competitors to spring up. That’s not just in wireless. Helium led the way to show how successful these projects can be, but that ain’t where it stops. Need an example outside of DeWi? What does a decentralized Glucose Monitoring Network look like, where you get paid in GLUC tokens to contribute your blood sugar data stream through a device you buy and maintain?
Second, any time easy cash comes up for grabs, then graft, grifts, and general cons will immediately embed. Not dedicating resources to combat that from the beginning can create significant customer dissatisfaction. Dissatisfaction equals friction, and friction in business kills profits.
Third, anonymity sounds really cool, but when you’re trying to stamp out the graft (read “gaming” “cheating” “stealing” etc) mentioned above, it’s pretty hard when you don’t know who to step on. Just having the ability to make players anonymous doesn’t mean it should be used willy nilly.
Fourth, with all of those above things being true, structuring the incentives of any of these blockchain + meatspace projects (NOT just DeWi projects) is critical to long term success.
I’ll tell ya this: If I were building a blockchain + meatspace project, employee #2 would be the most competent economist I could find at any price.
Perhaps the dismal science isn’t quite so bad after all?
Fifth, a network that is global can exist and still be more or less unused. Solely building actual utility on that network may create enormous wealth. Examples of companies building on the giant currently unused network we all created include Trackpac and Uplink Engine.
Sixth, transparent and effective governance is critical to efficient growth and community management. Relying on a decentralized group to make good decisions together is neither efficient nor likely to come up with the best outcome. As Kenneth Stanley has explored, group decisions end up being things that are the least bad for everybody, not necessarily the best thing for the group as a whole.
Seventh, an education plan that details to the community what to expect, what is changing and why, and how they should prepare for future growth can remove significant amounts of friction. A community living in ignorance because information is not easy to find is ripe for being led astray by the biggest voice, whether that voice is informed or not. Education is essential.
If you are reading this thinking that your team needs help with an education plan, please reach out. I built the largest blog on the net for Helium that helps explain to thousands of people what was (and is) happening with the project. I would be happy to apply the lessons learned here to other projects.
With all that learned from the “LoRa scrimmage”, let’s take a look at the next network Helium announced, “Helium 5G” on April 27th, 2021.
Helium launched it first, but Helium 5G has not been the wild success LoRa was. Why? Let me be clear here: It’s NOT because the Helium team is stupid, or ignorant, or unable to learn lessons from the past. Many of the lessons from LoRa were so cleanly applied to the 5G rollout that you didn’t notice some of the friction was gone. Still, 5G is a different animal entirely and (I suspect) the announcement was rushed. Let’s start with the differences between LoRa and 5G.
First, LoRa was basically uncontested. In 2019 you could’ve announced an intent to stamp out the existence of LoRa as pestilential spectrum or to make it an interplanetary protocol; nobody cared.
Second, the reason LoRa was uncontested was that very few people knew how to use it, let alone use it in everyday life. It’s still complex, and the likelihood that the average global citizen will use it in 2022 hovers only slightly above absolute zero. Hell, less than 1% of the world’s largest LoRaWAN network even votes on how to use it, and the number of citizen technologists who will today improve their life through some LoRa stat can be measured with the number of fingers on a carpenter.
Now, that’s not an indication of value, but of current use. The “battle” for LoRa wasn’t a battle; Helium just came in and scooped a delicacy off the platter that no one knew existed. That is unlikely to happen again, and if you were there to watch it, you were reminded of the great hockey player Wayne Gretzky’s quote, “I don’t skate to where the puck is, I skate to where the puck will be.” Helium was there, but the puck has moved again.
Third, because large LoRa networks didn’t exist, no one knew the value of large LoRa networks. Now, let me be super clear here: Helium obviously knew the value; that’s why they targeted it. Some senior level execs at various companies around the world also knew and know the value, though my feeling is they couldn’t believe that a global network could be (and has been) built out so quickly and cheaply.
Suffice to say, a global LoRa network is HUGELY valuable. If you believe that, and I do, I’d advise (as your personal investment advisor on the internet) that you hold onto both your Hotspots and your HNT.
With all that in mind, pretty clearly the LoRa rollout is the opposite of “Helium 5G”, aka data on cell phones. How?
- Everybody knows what cell data is. It is not an unknown
- There are large, established, and very dangerous competitors in the water. Hi Charlie Ergen!
- Everybody already uses cell data. 7.1 billion phone users in the world is close enough to everyone.
- The part we’re using, CBRS, is a small slice and we have the lowest priority.
So, why would a company that came off a giant successful launch of an unknown product in an unknown space to an unknown market enter a new space that was crowded, dangerous, and well known, at a bottom tier and almost completely unprepared to deliver? I mean, ask yourself that!
To be clear, I don’t know why. It still seems silly to me to launch so early, and I cannot make sense of it. I do have a few guesses:
First is probably useful hubris. We need bold, daring visionaries to architect a new future. If you’ve ever met Amir Haleem, you know he is exactly that. If people like him don’t imagine a world for the rest of us to grow into, well, we don’t have much hope. We do, and it’s a result of useful hubris. I support that.
Before I get to the second reason, let me state for the record: The Helium/Nova team (and probably Pollen, for that matter) represent some of the smartest and most technologically capable humans in existence. I would not discount their decisions. In general with Helium, I’ve always assumed that everyone knows more than me and is smarter than me. I believe that to be true in this case.
Second, Helium HAD to announce 5G. They had to claim it. They didn’t know how far along either a telco or their next competitor was. Those entities could’ve announced on April 28th, 2021 or…later, which is what Pollen did 10 months later, in February of 2022. Giant telcos still (as of July 2022) aren’t tipping their hand.
So now we’ve got the (miniature) elephant in the room, which is PollenMobile. The question everyone’s tiptoeing around is,
Is PollenMobile a competitor to Helium?
You are goddamn right they are! HOWEVER…
Both Pollen and Helium have to survive long enough to be able to emerge on the other side of the telco battles. Remember, they’re not entering an uncontested space that nobody cares about. They’re entering one of the most competitive markets in the world, with giant dangerous players walking around who are exceptionally well funded, well organized, and stand to lose mountains if they don’t play this right.
My take on the Helium vs Pollen debate is to support both, to roll out both, and to help both of them get big enough to build us a better world.
That’s what we’re betting on. When you build with Helium, Pollen, or whatever the next project is, you’re betting that a decentralized world, with all the mess and mistakes of a newborn human endeavor, will be better than a centralized one.
We are betting that a bright and shining thread in human history, one of spreading power throughout a community and applying rewards where they’re earned, will actually win out the battle. It may not. That thread is covered in grease and gore, the blackened fat and blood of a thousand fiery battles between the well-governed and the ill-used. The burnt out tattered ends of that thread mark the tread of history, though the shining remains yet. Where we end up in the future will be determined in part by where we place our bets today.
That’s why I’m betting on both. Deploying both. Learning from both, working with both, and more. They only GET to be competitors if they survive to adult-hood. They’re not even pre-teens yet; let’s get ’em to maturity before they go into mortal combat with each other.
For the record, I’m pro-Helium & pro-Pollen.
“But, but, but, I thought we were going to talk about the state of the space, what about that?”
We are, but I had to set the stage first, dawg.
Now that we’ve got an idea of the larger currents swirling around, the lessons learned, and what’s at stake, you can start to make better decisions about what you’re going to invest your money in, and how, and where.
What will be the next steps in this space? What do you want to support and build? How will you, as an individual, or company, or investor, place your bets? Will you support a decentralized world?
Let me point you in a direction. It’s not the only one you should explore, it just gives you an idea of how to think about the state of play here.
Let’s start with a defined question: Will Helium go after WiFi, or VPN (Virtual Private Networks) or CDN (Content Delivery Networks)?
Run through the same 4 questions for each one:
- Does it already exist?
- Is it being used at any kind of scale?
- Is someone currently paying for it?
- What has to be true in order for a decentralized version of this to exist?
The first three are easy answers. Answering the last one is what will deliver value to Nova Labs, and the Helium Foundation, and PollenMobile and a host of other organizations entering this radical, vulnerable, and potentially world changing decentralized blockchain + meatspace arena. Perhaps YOU have an answer to that question that no one has thought of, and you hold the key to a better world for all of us. If you do, I sure hope you step forward and put your shoulder to the wheel of progress, helping us all build this better world together. If I can help you, let me know.
Figuring it all out is what makes this exciting, I’m stoked you’re along for the ride!
Waitwaitwait…what’re we up against, Nik?
I mean, are we REALLY up against giant dangerous players in a well developed space? Is there any hope at all? (Yes, that’s why this is so exciting!)
Hexagon Wireless raised $2 million to buy hardware for Decentralized Wireless projects. They’re buying and deploying a ton of Pollen hardware.
Helium raised $364 million across 7 rounds of funding since 2013. Currently valued at a billion-ish, with the largest LoRaWAN network in the world and rapidly growing a small cell (what they call 5G) presence across the US.
Those seem like big numbers, right? Wrong.
Back in 2020, the FCC sold CBRS Priority Access Licenses (a priority level ABOVE ours) in Auction 105 for a total of $4,543,232,339 in net bids.
What are Priority Access Licenses? We’ll take a very quick detour here to talk about the electromagnetic spectrum, from long wave to millimeter wave. In the US, the government sells access to portions of the spectrum to different players. It’s why when I turned to FM station 107.3 in Boston as I kid I rocked out to WAAF, but now another company has bought the rights to frequency and broadcasts…something that ain’t rock ‘n roll. They’ve paid to broadcast on that band within a certain power range, and no one else is allowed to.
A Priority Access License means that a company pays for priority over the next level down to broadcast. It means that if I’m broadcasting with my Helium small cell on, say, 3.56 GHz and the company who owns the local PAL wants to use 3.56 GHz, I get booted off.
Confusingly in our band (CBRS, 3.55-3.7 GHz), a Priority Access License still doesn’t give you the top priority; that’s reserved for the US government.
Even as a second tier user, those licenses are valuable. Companies paid $4.5 billion (with a B) for a tiny slice of spectrum that the US government STILL has priority access over. We’re at the bottom of that priority list. As the use of that spectrum fills up, you should expect that your DeWi network will negotiate with owners of the PALs to allow us to broadcast under their license. Yes, we’ll slice out some profit for them in order to do that. That’s just business.
$4 billion is not all the telcos have spent, not by a long shot. That was for just 150 MHz of spectrum, from 3.55 to 3.7 GHz. The same players have, well, you can read the FCC’s auction summary here. You can look for Auction 105, which I’ve referenced above, or Auction 107 for the 3.7 GHz band (from 3.7-3.98 GHz), where they’ve spent over $80 billion (again, with a B) on spectrum. Suffice to say, we ain’t talking chicken feed. In fact, the US Government Accounting Office reports that $258 billion has been spent on auctioning off spectrum. Helium’s billion dollar evaluation doesn’t look so impressive now, except…
The good news is that, having spent so much on buying the rights, the telcos may not have enough cash left to roll out the hardware.
That’s where you (and decentralized networks) come in. You buy the hardware and provide the coverage, get paid for the data your unit(s) process in cryptocurrency, and the telcos will manage the billing in fiat to the end customer. If this plays out the way these decentralized networks are aiming for, everybody wins. That’s what’s so cool about this.
- End customers should get cheaper rates because telcos are paying less.
- You get paid in crypto to deploy coverage.
- The telcos buy crypto to pay for data usage, then bill their customers in fiat.
Those are the stated goals for Helium, being what’s called a “neutral host”. For Pollen, they want to be their own network, like AT&T or DISH or Verizon. Neither is definitively right or wrong. It’s exciting for us to watch because we’re seeing two (and hopefully more) competitors using the same technology applied in different ways for slightly different goals. It won’t be an easy road to the top, and there’s no guarantee that any bet you place will be a winner.
For those of you who lived and came of age in the 80s, recall the immortal line from AC/DC,
“It’s a long way to the top if you want to rock ‘n roll.”
I don’t know about you or when you were born, but I’m guessing if you’ve gotten this far, you’re a lot like me. And me? I was born to rock.
Nik Hawks is available for hire if you’d like help with your blockchain + meatspace project. Whether you’re an investor considering a new project and want to de-risk it by adding experience, or you’re on the team and trying to work out how to align the incentives for your space and keep the community educated, Nik will help you evaluate and design outcomes that increase the value of the project. Reach out here.