The Helium Network is decentralized. That means the "People" own the infrastructure involved with the network’s foundation and utilization. By “infrastructure”, we mean the hundreds of thousands of Helium Hotspots that are currently connected across the globe. Each one of those active hotspots is an important node in the network and is rewarded in HNT for its service.
There are essentially two ways that a Helium Hotspot “earns”, “mines”, or is “rewarded” HNT for being active on the network. The first is by completing Proof of Coverage tasks. The second is by facilitating Network Data Transfers. We’ll break down how each of these works in a moment, but for the most part, HNT is earned when a hotspot confirms that it is active & connected and/or when it actually transfers data from IoT devices or sensors on the network.
The Proof of Coverage protocol is Helium’s ingenious method for ensuring that all hotspots are active, connected, and legitimately located where they’re registered. Using radiofrequency technology, the Helium blockchain can periodically send Proof of Coverage “challenges” to individual hotspots that are connected to it, which will ultimately confirm their location and status. The point of these tasks is to make sure that the nodes in the network are actually online, in their registered locations, and ready to be utilized for network data transfers.
The Challenger is the hotspot that creates the challenge. Basically, the blockchain periodically asks a hotspot to “challenge” another hotspot in order to check on its location and status. The Transmitter is the hotspot that receives the challenge. It’s the one that has to prove that it is online and where it’s supposed to be. The Witnesses are the hotspots that receive a beacon from the nearby Transmitter and confirm its status on the Helium blockchain.
Let’s say the Challenger is someone waiting on a friend to arrive at a dinner party. The Challenger calls up that friend and asks about their location and ETA. The friend that’s on their way is the Transmitter. They have to prove where they’re currently at and confirm that they’re ready to eat. The Witnesses are the Uber driver and other people in the car who can use their proximity to confirm the status of the Transmitter.
Every hotspot involved in this PoC challenge is rewarded for its service with HNT. This is how Helium hotspots “mine” HNT from the blockchain. However, the HNT rewards are not doled out equally. The more Witnesses it has to confirm its status, the more HNT a Transmitter will earn. Any hotspot within a certain geographical range can Witness this Transmitter and help it complete the “challenge”.
The Witnesses will earn less HNT when the number of hotspots in their given area exceeds a certain “target density”. That density target is varied from area to area, but the general threshold is roughly four Witnesses. That’s one of the primary reasons that some Helium Hotspot locations are better for earning HNT than others. The area of each hotspot needs to be saturated with a variable number of other hotspots to earn the peak amount of HNT for each PoC challenge. All of this is automatically happening at a given interval in order to continuously establish the quality and legitimacy of the Helium Network.
The second way that Helium hotspots earn HNT is by actually transferring data from IoT devices across the network. This type of reward system is more straightforward than the PoC system. Basically, each hotspot that relays data from IoT devices that are relying on the Helium Network for communication will receive HNT in return. The amount of HNT earned is based on the amount of data that is relayed. And while this method for earning HNT is less frequent (at the moment), the reward scale is roughly 7x higher. That’s because Data Transfers are what the Helium Network was ultimately built to accomplish.
There are several factors that come into play when we’re talking about the “Reward Scales” and the total amount of HNT earned by each hotspot during a PoC Challenge or a Network Data Transfer. In our next post, we’ll detail the optimal setups for a hotspot, including the various 3rd party antennas, in-residence placements, and general locations that can boost your HNT earnings. That being said, there’s not necessarily a one-size-fits-all solution when it comes to hotspot configuration and placement. Fortunately, JAG has thousands of active hotspots in our network with a wide variety of locations and building types. That enables us to pull from a sustainable pool of data to identify the best possible setups for each of our unique customers.
When you register with JAG, you get access to a completely free Helium Hotspot to install in your location and earn you HNT with zero additional effort on your end. You also get to utilize our extensive network of installation and configuration specialists who can pinpoint the best possible setup for your building(s). We are constantly analyzing our thousands of hotspots to understand the numerous variables that can affect earnings. As with any new and revolutionary technology, this type of troubleshooting is both frequent and necessary for optimal performance. With JAG, we will help you every step of the way to ensure you’re earning the most HNT possible.
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