The remaining crypto skeptics out there are quick to say "That's all well and good, but what does that coin actually do in the real world?" Well here's an answer that should satisfy even the most cynical crypto skeptic: How about powering the Internet of Things with decentralized, long-range WiFi? That's exactly the real-world use-case Helium (HNT -1.31%) is trying to make.
What is Helium?
Helium now is the 46th-largest cryptocurrency by market cap, clocking in at about $3 billion. The goal of the Helium network is to facilitate communications and connectivity for the Internet of Things (IoT) and the devices connected to it. Individuals can install Helium routers or, "hot spots," at their homes or offices and earn HNT for providing connectivity. Helium's parent company points out that connecting to cellular WiFi can be expensive and connecting to a store or business's WiFi can be impractical, so it aims to provide connectivity for IoT-enabled devices. The Helium hot spots provide a long-range form of WiFi called LongFi that reportedly reaches 200 times farther than a traditional WiFi hot spot, or as much as 10 miles depending on environmental conditions.
Are people really using it?
Helium is making some notable strides in terms of adoption. In October, DISH Network said it was partnering with Helium to "support open source and low-cost wireless connectivity ecosystems" and utilizing Helium to roll out 5G . The city of San Jose, California, became the first city to officially join the Helium network and will use Helium to provide internet access for low-income residents. The city distributed Helium routers to volunteers for a pilot program. With concern growing over the connectivity gap or information divide in the U.S., Helium could feasibly have an additional use-case beyond the IoT by playing a role in filling this gap. Helium can expand connectivity to areas that are falling behind, whether they are low-income urban areas or remote rural areas.
Helium is energy efficient
While Bitcoin and other proof-of-work assets have been criticized by some for their electricity usage, Helium is notable in that its proof of coverage consensus (essentially verifying that routers are located where they claim and that they are running and providing coverage) uses much less energy: about five watts to run, or the equivalent of having an LED light bulb on.
One big risk
The major risk that I see on the horizon for Helium would be internet service providers prohibiting their customers from using Helium hot spots because reselling their bandwidth could violate their terms of service. If Helium becomes widespread, ISPs could crack down on users that are taking a piece of their pie by capitalizing on their bandwidth.
Is Helium a buy?
Helium has been a volatile asset. It is up more than 500% during the past year, but it is also down more than 50% from its 52-week high set just a few months ago in November. Based on the volatility, I would say that Helium is not for the faint of heart, but for risk-tolerant investors, there is a lot to like here. Increased adoption of the network, the growing prevalence of connected devices, more cities and municipalities looking for solutions to give internet access to their populations, and the rollout of 5G nationwide are all catalysts that should increase the prevalence of Helium's network.
I also think Helium will benefit from its energy-efficient version of proof of work as other proof-of-work blockchains continue to come under scrutiny for their energy consumption. For these reasons, I view Helium as a buy for risk-tolerant investors who are interested in the project, and even for individuals who are interested in mining Helium using a home hotspot.