Passive income: Mining on the Helium Blockchain
This article gives you a practical guide on how to earn regular passive income with mining on the Helium blockchain. It explains what the Helium network is, how profitable it is to mine Helium and how to mine it.
The Helium blockchain is an open-source, public blockchain that was developed to incentivize the creation of a physical, decentralized wireless network. Individuals get paid in the native Helium cryptocurrency HNT to operate hotspots, which provide connectivity for a class of Internet of Things (IoT) devices. This is possible with special radio frequency (RF) technology called LoRaWAN. LoRaWAN is a Low Power, Wide Area (LPWA) networking protocol designed to wirelessly connect IoT devices to the internet. As of 02.11.2021 Helium has 275k hotspots all over the world. Helium’s first project is solving the network coverage challenges in the IoT sector. It uses a blockchain technology based on the Proof of Coverage (PoC) consensus mechanism. Helium’s second project uses the same scaling mechanism to provide decentralized 5G network coverage. Due to legislation, the 5G project is currently available only in the USA.
Describing Helium mining simply: You put a device with an antenna in your home and start giving signal/coverage to the network in the local area where you live. For this, you receive rewards. This is why Helium is called the People’s Network.
For this type of passive income, you need an internet connection, average technical understanding and original investment of around 500 USD.
Which IoT devices are powered by the Helium network?
There is a wide range of devices powered by the Helium Network. E.g. the Lime scooters and bikes that drive around the city work with the Helium network. The network is also used for package and pet tracking, air quality monitoring, elderly care and monitoring, smart parking, water monitoring and so many more.
You can find an extensive list on Helium’s website.
Is Helium mining profitable?
Helium mining can be very profitable. Your profits can vary considerably depending on the state of the Helium network in your area and the setup of your hotspot. The more miners there are in your area, the higher the profits. However, the hotspots should not be in close proximity to each other (less than 300 meters), because they might compete with each other and receive lower rewards. With an investment of around 500 USD some miners on the Helium network earn more than 500 USD per month. The Helium blockchain is an open source blockchain, so you can see exactly how much money others around you are making.
An excellent source of information about how much your neighbors earn is the Helium explorer. By opening the explorer, you can select an area to analyze.
First, looking at the map of Europe notice there are many green spots in the large cities. The green spots show the concentration of miners. There is better coverage in the large cities and miners can earn higher rewards there.
By zooming into Frankfurt, notice the map is divided in hexagons. The number displayed in each hexagon represents the number of antennas (miners), which are located in the hexagon.
A list with detailed information about the miners in the selected hexagon shows when clicking on it.
In the selected hexagon on the picture, there are four miners. Each miner has a name, which is randomly given to the miners when they register on the blockchain. The first miner registered 2 days ago, the next one a month ago, the third and the fourth two months ago.
The rewards, received for providing coverage to the network, are paid in the Helium native crypto currency HNT. The total reward for the past 30 days is displayed on the picture. For example, Recumbent Umber Leopard earned 17,54 HNT in the past 30 days, which is equal to 378,51 USD (exchange rate from 25.10.2021). It is possible to click on this miner and receive further information about the hotspot he uses, the height of the antenna, the earnings as well as all other hotspots communicating with the selected hotspot.
As already mentioned the amount of HNT rewarded declines, if there are more miners in near proximity to the hotspot. In general, it is true, that the more hotspots there are in a hexagon, the less HNT these hotspots earn. Due to the brilliant business model and accessibility of this blockchain, many individuals want to start mining Helium. The amount of hotspots increases daily and it is expected that in the future the amount of awarded HNT coins will continue to decline. However, this does not mean that the fiat value of the rewards will decline. The value of HNT has grown over 12 times YTD. By looking at a practical example: If you got 5 HNT as a reward per day in the beginning of the year, this was equal to 7,5 EUR (exchange rate as of January 2021). If you get awarded 1 HNT per day today, you would receive 18 EUR per day (exchange rate as of 25.10.2021).
The rewards awarded for Helium mining are stored in a mobile wallet on the Helium app. These rewards can be transferred to a crypto exchange any time and converted to fiat currency (e.g. EUR, USD). You can also choose to stake HNT and receive staking rewards, which are between 5,12% and 7,65% depending on the staking period. If you know more about staking and how to stake crypto currencies, read my article about “Staking: passive income with crypto currencies”.
How do you mine Helium?
After installing a Helium Hotspot in your home, you start providing coverage to the network.
There are different Helium hotspots, which you can use to mine Helium. On the Helium Website there is a comprehensive list with Helium hotspot providers. It is crucial to purchase a hotspot directly from a trusted source such as the list on the Helium Website, because Helium hotspots could be manipulated and you can end up mining Helium and not getting the rewards. The first miner I ordered was from Sensecap and I installed it two weeks ago (on the 15.10.2021).
Currently there is a long waiting period to get a Helium hotspot, due to the fact, that the producers are overwhelmed by orders. The average waiting time to get a Helium hotspot is 12–20 weeks. Few weeks ago I ordered another miner from Bobcat, because I want to compare the productivity of two different providers. I expect my Bobcat to arrive in Q2 2022.
The hotspot looks a lot like an internet router. The Helium hotspot only consumes 5W/h of electricity, which is the amount of energy that a LED light bulp consumes per hour.
The Helium hotspot comes with an attached antenna, which determines the range of coverage the hotspot can provide. A separate antenna can be purchased and attached depending on the infrastructure around the hotspot. For example, if you live in the center of a large city on a lower floor you can use an antenna with smaller dBi, for example 3 dBi in Europe.
The following picture shows how the radio waves are distributed with different types of antennas.
If you have a 3 dBi antenna the waves are distributed like a balloon around the hotspot and it can cover higher as well as lower heights in a near distance parameter.
The amount of rewards for Helium mining depends strongly on the infrastructure around the hotspot, the number and the density of hotspots around. Here are some best practices I learned about the infrastructure from installing my hotspot. The Sensecap hotspot, which I bought has a 2,8 dBi antenna. I live in the outskirts of Frankfurt, on a high floor. In the beginning, I placed the hotspot on the top floor of the building, so there are no building or trees in front of it. On the top floor I was using a Wlan repeater. I learned that the hotspot works best when it is connected to the internet through an ethernet LAN-cable. Therefore, I had to move the hotspot to the lower floor and it has now buildings and trees in front of it. Unfortunately, my antenna does not have a wide reach, since it has these obstacles in front of it (buildings, trees). I will purchase a 5,8 dBi antenna and try the productivity with it.
The best way to determine how much reward you can earn with Helium mining is to compare with hotspots around you on the Helium explorer. From my experience, the highest return comes, when you have a clear view without obstacles to a wide area, preferably a city center.
Summary:
Helium is an open source blockchain network, which offers rewards for providing wireless coverage to IoT devices connected to the Helium network. Earning passive income can be very profitable depending on the infrastructure around the Helium hotspot and it’s setup. Here are 5 steps to start mining Helium:
1. Check the development of the Helium network around you and the possible rewards on the Helium explorer.
2. If you are satisfied with the possible rewards, purchase a Helium miner from the website of an official hotspot producer.
3. Connect the Helium miner with the blockchain and install the Helium app with the mobile wallet on your phone.
4. Start mining Helium.
5. Try to optimize the rewards by buying a new antenna or putting the miner in a better location in your home.
