Why will a Hotspot earn well on one day, then nothing the next? Why isn’t there more consistency in earnings?
There’s a clear reason for spiky earnings, and I’d love to walk you through it.
Let’s start at the beginning of the Proof of Coverage (PoC) cycle, with the construction of a Challenge.
Every Hotspot on the Network is eligible to construct and issue a challenge every 300 blocks. Let’s define “Blocks” and “Challenges”.
A “block” is a unit of time, usually around 60 seconds. 300 blocks *should* equal 300 minutes, which of course is 5 hours. So, a Hotspot can issue a challenge every 5 hours.
Now, *issuing* a challenge is not the same as beaconing. This’ll get a little confusing, so bear with me. Understanding how the PoC challenge cycle works (and doesn’t work) will make the spiky earnings much more clear to you in about 3 minutes.
For you uber-Helium geeks, I’m going to slightly over-simplify this in order to make it understandable. I don’t think we need to get into ephemeral public keys and SHA256 digests. If you DO want to get into that, go here.
The “Challenge” is like a series of envelopes within envelopes. When a Hotspot “issues” a challenge, that means they took 2 secret codes and put them in 2 envelopes so they’re separated.
The Challenger then sends this “envelope within an envelope” to a randomly selected hotspot on the network.
That second Hotspot is called the Challengee. The challengee (and I’ll skim over a bunch of technical stuff here) opens the first envelope and uses the code inside to prove that they got the Challenge.
Then they open the second envelope and Beacon out that code over the radio.
Any Hotspot who receives (Witnesses) that code then reports that code to the blockchain, effectively saying, “Hey, I heard code #2.”
The blockchain then checks with the Challenger to make sure all the codes match up and that they were all submitted in time.
If everybody did their job correctly and on time (Challenger, Challengee, and Witness), the blockchain issues each participant a reward based on transmit reward scales.
By the way, if *anything* in that chain of events is wonky; if the codes don’t match up, if the whole process takes too long because a Hotspot was relayed, of if anyone is trying to game it, the challenge is declared invalid, and nobody earns.
Ok, so how does this explain spiky rewards?
First, remember that any Hotspot can only earn a reward if it participates in a valid PoC cycle. Invalid cycles don’t count.
Second, remember that WHERE the beacons are emitted is random. Conceivably, all the beacons *could* be sent to the US state of North Dakota. Remember, it’s random.
That randomness is at the core of why earnings are spiky. Sometimes a bunch of Hotspots near yours all receive a challenge, all get to transmit, and you witness all of ‘em. That’s a big earning day.
The next day, none of ‘em get a beacon, or maybe only a few. Your Hotspot earns nothing, or maybe off only 1 beacon. That’s a low earning day.
Since Hotspots are grouped in different densities and numbers around the world, you’re more likely (not guaranteed) to witness a beacon if you’re in a place where you can witness a bunch of other Hotspots.
A city with 1,000 Hotspots is more likely to receive more Challenges and therefore transmit more beacons than a small village with 4 hotspots. Even though the earnings per Hotspot is likely to be less in a city, you just have more opportunities to witness.
So, that should explain spiky earning. Got questions? Hit me up in the comments and I’ll do my best to answer ‘em.
Oh, and if you want help making sure you’re in the best position to earn the most HNT (not necessarily in the city, by the way), consider hiring me. I’ve helped hundreds of hotspot owners improve their understanding and earnings on the Helium network, from folks with just one Hotspot all the way out to companies with thousands of Hotspots. I’ve seen most of what you can do with Helium and I’d love to walk you through how to make YOUR contributions as valuable as possible. Great value equals great reward. Let’s do this!