The primary purpose of the Helium network is to connect IoT devices and provide a means to transfer data from such devices.
The Helium model is based on user-participation in hosting Helium miners. Miners collect data from IoT devices and transfer this data over the Internet to a destination. Users are rewarded with HNT for such transfers.
Today there are very few IoT devices and most miners earn HNT by proof-of-coverage. Put simply this refers to establishing that a miner is at a location that it states its at. The better it’s able to establish that – i.e. by connecting to neighboring miners, the more HNT it earns.
Over time it is expected that as the number of IoT devices using Helium increases, the amount of data your Helium miner communicates will increase. It is also anticipated that in the future hosts will earn primarily from data transfers.
In this post we explain how much a miner can earn with such data transfers.
But let’s begin with some basics.
What is a Helium Miner?
Helium is based on LoRa network technology that connects IoT devices. It consists of gateway devices called hotspots or miners connected to one another over the internet (typically over Wi-Fi or wired Ethernet). Since it’s a hybrid of LoRa and Wi-Fi technologies, Helium is also referred to as Long-Fi.
Data from IoT devices is transmitted to hotspots or Helium Miners and then across the Helium network.
Helium mining results in earnings for the hotspot host by way of tokens called HNT. This incentivizes the growth of the network. At the time of writing there are over 900,000 active miners globally. This number continues to grow although not as fast as it used to in 2020 and 2021.
How much money do I make when my Helium miner transfers data?
A Helium miner can make up to $0.00001 per data credit transfer. This is the equivalent of transferring 24 bytes of data.
How much data does a Helium miner need to transfer to earn 1 HNT?
In order to earn 1 HNT, a Helium miner has to transfer 2.5 Million data packets or 57 MB of data (equivalent to 456 Megabit)
Note that this calculation assumes that the price of HNT is US $25 and that it’s the only miner transferring data.
How much does a Helium data credit cost?
Example Helium Data Credit transaction
In the following transaction, the miner earns 0.00000014 HNT per data packet transfer. In total 3 data packets were transferred for a total earning of 0.00000041 HNT. At today’s price of $25 per HNT, the miner earned $0.00001025
A Helium data credit costs $0.00001. So in order to send 3 data packets, it costs $0.00003.
However the miner only earned a third of that. It is likely therefore that three hotspots participated in the data transfer across the network and the rewards were split equally across the miners.
In this post we have explained how much HNT a miner can make with data transfers. Clearly a lot of data transfer is required for a host to make money with Helium. Note: The numbers in this article assumed that 1 HNT = $25. In 2023 that is no longer the case and 1 HNT is worth about $1.60 or a lot less!