How does Helium work?

Here's a quick thread breaking down exactly how Helium works and how/where value is generated. ??????

By Gabe Rabello: https://x.com/GabeRabello/status/1810342215048122502

Not sponsored by Helium or Helium Foundation .

Helium has two different networks: the IoT (internet of things) network and the mobile network. I'll focus the below on the mobile network, which is IMO the more interesting side. The goal is to build a people-powered 5G mobile network.

So what's the deal with 5G? You may have heard a lot of talk about 5G from legacy telecom networks. 5G will provide consumers with faster connection speeds versus 4G, but it's a very lengthy and costly roll-out.

Deploying 5G around the world means millions of small cells will need to be installed to meet the hyper-growth in demand for mobile data. That's how you solve wireless congestion -- you need more infrastructure closer to where people are. Figure below from Crown Castle.

But that's easier said than done. Think about the logistical nightmare of centralized telecom companies deploying millions of cells... - Identifying sites - Getting permits / city approvals - Connecting to power grid and fiber backhaul - Negotiating with property owners.

So that's where Helium comes in. It flips that model on its head by empowering a decentralized network of operators to provide coverage permissionlessly. Anybody can set up a hotspot! Instead of the top-down approach, it's a community-driven bottoms-up deployment.

The key value prop of the Helium Network is cost and speed. Because the bottoms-up model side-steps all the centralized logistical nightmares of 5G deployment, it can provide bandwidth at a cheaper cost. And it can arguably scale faster around the globe.

With that context, you can see that the Helium network is infrastructure. Its direct competition, IMO, is not really the wireless carriers (AT&T, Verizon, etc). Its competition is the legacy infrastructure providers (AMT, Crown Castle, SBA).

Those infrastructure providers in turn will service the wireless carriers. And those wireless carriers will directly service end users plus some MVNOs. MVNOs are essentially "lite" wireless carriers that piggyback on the networks built by the big wireless carriers.

So at a high level, the Helium network generates value for itself by providing wireless infrastructure. As bandwidth is consumed on the network, fees are paid to Helium by the wireless carriers and MVNOs using it.

Helium Foundation 's docs for more info: https://docs.helium.com/tokens/data-credit/

And now that you understand the telecom value chain and MVNOs, it's time to discuss Helium Mobile . This is what people often misunderstand. Helium Network and Helium Mobile are different entities.

Helium Network is the infrastructure, as discussed above. It's decentralized and governed by the DAO. Helium Mobile is an MVNO. It is a customer of the Helium Network. And it's a centralized equity business set up by Nova Labs.

Here is how I would illustrate it:

And that's Helium in a nutshell. Hope it's clarified some of the misconceptions. DISCLAIMER: Purely for educational purposes. NOT a recommendation to buy or sell any tokens. I didn't even directly mention any tokens in this thread.

By GabeRabello.

Not sponsored by Helium or Helium Foundation.