Will Helium, favored by top encryption agencies, lead the DePIN narrative? No, it simply won’t.

Will Helium, which is favored by top encryption agencies, lead the DePIN narrative? No, it won't.

Please note that the LoRaWAN network is not for watching short videos or playing games, but rather provides a network for devices that only need to transmit a small amount of information, such as GPS trackers, environmental sensors, weather stations, parking timers, etc.

If Filecoin was at least based on founder Juan’s good vision, but was later ruined by those who sold mining machines, then Helium was purely based on selling mining machines – in the early days only official mining machines were allowed (special routers that users buy to connect to power and Wi-Fi or Ethernet ports, then deploy a wallet and synchronize, and can mine), otherwise no rewards are given, and later opened to third-party manufacturers, but requires community and foundation approval.

By this point, you may have noticed that Helium’s public chain only plays a role in issuing currency and settling orders (so those who touted their public chain technology early on based on their technical documents were just blowing hot air), and this function is completely unnecessary for a public chain!

So Helium finally saw the light last year and migrated to Solana in April of this year, using smart contracts to do what a public chain does.

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Now you should have an intuitive understanding of what Helium does – they have built a wireless network and encourage people to buy routers to provide hotspots. Whether Helium can take off in the future depends entirely on whether there are IoT projects that adopt their network, and this is purely a matter of business logic.

Helium’s Business Logic

From a communication network technology standpoint, LoRaWAN networks can replace 2G networks without issue (the only criticism is that there is currently no universal standard, so security is lower), and more and more IoT devices are adopting this network. However, Helium’s own business logic has major issues.

Miners buy routers to provide network coverage in the surrounding area to earn limited HNT rewards, which is not a problem, but what is the value capture of HNT? If IoT hardware wants to access this network, it needs to destroy HNT, then generate corresponding DC (anchored at 0.00001 USD), and finally use DC to pay.

In theory, Helium’s users are suitable for all IoT projects that only need to transmit a small amount of information, as they advertise – GPS trackers, environmental sensors, weather stations, parking timers, skateboards, and even Nest’s office refrigerator in Europe. And the skateboard has been debunked by the other party, saying it was just tested briefly.

However, the demand for Helium in IoT is actually a pseudo-demand. Leaving aside industrial IoT devices that require high security, even IoT devices in daily consumer scenarios such as vending machines, coffee machines, express cabinets, and vending machines, and even everyday household items such as speakers, rice cookers, and sweeping robots, will not consider connecting to third-party networks!

First, there are security concerns, and secondly, they need to establish their own IoT ecology (such as the Xiaomi IoT Developer Platform). Only insignificant and unrealistic IoT projects will consider using Helium for cost reasons.

This is similar to the fact that enterprise data will not consider using Filecoin for storage, but speaking of it, some short video platforms have entrusted some cold data to Filecoin miners for processing.

Therefore, in the ecological projects promoted by Helium, a considerable part is IoT solution providers. Having Helium as an alternative solution in the case library is also conducive to PR. Therefore, the gold content is roughly equivalent to Internet companies establishing cooperation with AWS and Alibaba Cloud.

Of course, Helium also has a 5G narrative, which you can completely understand as reselling 5G routers using the same logic (this is a general cellular network, facing ordinary mobile users), and earning tokens is MOBILE, which can be exchanged for HNT. According to the founder, 6G, 7G, 10G, etc. will be prepared in the future…

They are all blowing Helium

Through the analysis mentioned in this article, we should be able to draw such a conclusion-LoraWAN will be used by more and more IoT projects (and mainly because the business increment of IoT itself is too large), but they don’t need to join Helium’s LoraWAN network.

Let’s take a look at how those investment research institutions/media/KOLs are blowing Helium, and we can avoid pitfalls in reverse.

Last month, the crypto investment media Coinmonks wrote an article “The Future of Helium Network and LoRaWAN Technology”, believing that LoRa and LoRaWAN will reach a market size of 25.5 billion US dollars in 2028, and Helium is already the world’s largest decentralized LoRaWAN network, and the future may connect tens of billions of devices.

The blockchain analysis company Messari not only looked good in the project research report before, but also vigorously promoted the DePIN narrative this year, and Helium is the leader of the DeWi (decentralized wireless network) concept under the DePIN narrative.

Foreign investment research media (only refers to media, not investment institutions), is generally unreliable, so we can ignore them. The report released by BlockBeats last month, “The downfall of star public chains, what did Helium do wrong?”, is worth referring to and provides a comprehensive analysis.

The conclusion is that “Helium was built by a team that does not understand blockchain, so they missed many opportunities for public chains”, but the conclusion given is extremely cautious – “Whether Helium can regain its initiative in the market with this opportunity, I believe everyone is looking forward to Helium’s answer.” This conclusion looks like an answer added at the last minute that avoids offending anyone. I can’t agree with it, nor can I refute it… I can only say that it is still of reference value.

However, if we trace back further, the most influential research article on Helium in China is “Understanding the Internet of Things leader Helium: Operation and Incentive Logic, Advantages and Disadvantages” by Wu on Blockchain. The author believes that “not everything needs to be decentralized. It seems that Helium, as a centralized distributed product, will have better development in the field of industrial Internet of Things.” Although his understanding of the IoT industry is basically guided by the project party, he still understands blockchain very well.

The most influential research report on Helium in China should be the first-class cabin report, which believes that “there is no direct competitor in the circle at present, and the growth rate of business is very fast recently (August 2021), and it is in a continuous upward trend. Therefore, it is worth paying attention to.” The first-class cabin report is like a ChatGPT-style extraction of Helium’s official documents, and it was led by the official all the way around.

However, we cannot demand too much from the first-class cabin. After all, a16z led a $110 million investment in Helium at the same time, stating that compared to traditional telecommunications infrastructure, Helium can cold start at a lower cost and faster, and “We are excited about Helium’s potential to provide comprehensive 5G connectivity worldwide.”

To summarize the points that Helium can boast: it has great potential in the Internet of Things. However, the singularity of IoT hardware has already arrived, and its development trend is obviously not to connect to third-party networks such as Helium.

Research methods and future plans of Whistle

From Messari to First Class to a16z, they are very wrong about Helium, and their cognition has basically not jumped out of the scope of reading the project party’s documentation. Therefore, they can only be led by the project party to the place they want you to go.

While the crypto industry is moving towards standardization, it is also mixed with some drawbacks. For example, trying to analyze the crypto industry with the analysis of the pig industry, and even the actual performance is more rudimentary than the study of the pig industry.

The pig market is very mature, and the influencing factors and the linkage between them have been thoroughly studied, so a summer intern can analyze it like solving arithmetic problems, and finally come up with a conclusion that is eight or nine points correct.

However, the crypto industry is a cutting-edge field that is undergoing changes. Effective knowledge often lies in the forefront actors, and these local knowledge may be conflicting or even wrong, but at least it is locally true, so we should listen to different opinions.

As a complex system in the dynamic changes of the crypto industry that has not yet clear rules, it should have more complex analysis methods. However, the research reports of the crypto industry are even more rudimentary than analyzing the pig market. At least the pig industry research report has a considerable part of the content exploring the linkage between various factors.

The research methods such as “six dimensions and 48 indicators” used in this kind of research report are purely tools for mass production by financial workers. A skilled worker can produce three articles a day without any problem. However, in the crypto industry with a strong learning atmosphere, it can make novice readers talk about another novice in just 10 minutes.

Of course, this article is not teaching the industry how to do research, but pointing out what kind of research is incorrect, and what kind of research we think is in the right direction.

The industry iteration is driven by the underlying logic of the industry, but the market’s attention has always been on the surface. If you only rely on the market volume as a reference, you will often become a bag holder.

“Sharp Whistle” is not a preacher, but as an equal dialogue partner, it makes some real sounds (although most of them are sharp whistle sounds). Therefore, we will not release comprehensive or stable research reports. We will sharply judge the viewpoints or projects of others, and also welcome others to sharply judge us (but refuse to rush forward and each deny it).

We do not guarantee that the voice we make is 100% correct (but we will try our best), nor do we pursue 100% rigor and perfection (this is directly given up), only whether the core viewpoint hits you. Whether you agree or not is not important. What is important is whether it inspires you (even if you are briefly skeptical and then more determined).

At the moment, our manpower is limited, so we focus on making outrageous comments on things that should have been eliminated in the previous two rounds. This is the most cost-effective way to show our level. Truly constructive cutting-edge discussions (such as ZK) still require more friends with true insights to join.

Welcome to “Whistle That Pierces Your Ears”, a crypto industry self-media that tells the truth (but not necessarily correct).

Furthermore, a declaration: we only evaluate the quality of the project and do not discuss the price of the coin, because the price of the coin often depends on the project team’s willingness to pull the price, which is unpredictable!

We will continue to update Blocking; if you have any questions or suggestions, please contact us!